What's Pushing Sony To Consider A Semiconductor Spinoff?

Sony Group Corp SONY is weighing spinning off its semiconductor unit Sony Semiconductor Solutions Corp.

The spinoff and listing of the semiconductor unit may occur by 2025.

Sony is considering distributing most of its holding in the chip business and may retain a minority holding after the spinoff, Bloomberg reported Monday, citing unnamed sources familiar with the matter.

Also Read: Sony Raises PS5 Prices In Some Countries By Up To 25% In Anticipation Of Tariffs

Sony is also planning to spin off its financial arm, Sony Financial Group Inc, in line with investor Dan Loeb's plans to unlock value.

Sony reported fiscal third-quarter 2024 consolidated sales growth of 18% to $28.97 billion (4.41 trillion Japanese yen), topping the analyst consensus estimate of $23.78 billion. EPS of $0.41 (61.82 yen) beat the analyst consensus estimate of $0.30.

Consolidated operating income rose by 1% to ¥469.3 billion. Game & Network Services operating income climbed 37% to ¥118.1 billion. Music operating income increased by 28% to ¥97.4 billion. Pictures operating income declined by 18% to ¥34.0 billion. Entertainment, Technology, & Services operating income remained flat at ¥77.1 billion. Imaging & Sensing Solutions operating income declined 2% to ¥97.5 billion. Financial Services operating income decreased by 40% to ¥46.4 billion.

Sony expects fiscal 2024 sales of $88.00 billion or ¥13.20 trillion versus the $81.59 billion consensus.

Recently, Intel Corp INTC announced a 51% stake sale of its programmable chip business, Altera, to private equity firm Silver Lake Management for $4.46 billion, valuing Altera at $8.75 billion. Intel originally acquired Altera for $16.7 billion in December 2015.

Price Action: SONY stock traded higher by 0.6% to $25.11 at last check Monday.

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