Osaka-based Sanyo Electric said on January 15 that the company is planning an eight billion Yen (US$88.52 million; US$=90.39 Yen) structural reform of its semiconductor business, expecting to cut 1,200 jobs and shuttering seven overseas semiconductor plants, according to reports by Japan's Nikkei. The company also lowered its full-year sales forecast for fiscal 2008 ending on March 31, 2009, from 2.02 trillion Yen (US$22.35 billion) to 1.90 trillion Yen (US$21.03 billion) and expected zero annual net profit.

600 regular and 600 contract workers will be laid off as a consequence of the structural reform, with 800 of them in Japan and 400 in other overseas locations. Sanyo's seven existing overseas semiconductor plants will be consolidated into four. As Sanyo previously stated its intention to strengthen production operations in the Philippines and Vietnam, it is expected that the facilities affected will be the ones in Thailand and China, according to the Nikkei report. Meanwhile, it is understood that the three front-end process facilities in Japan will not be affected by the restructuring, while back-end processes will be relocated overseas.

In addition, Sanyo said it plans to trim down its SoC (System on Chip) business and focus its resources on the power semiconductor sector. As a result, 150 workers will be transferred from the SoC business to Sanyo's power semiconductor and battery businesses.