Sony weighs chip spinoff that Dan Loeb called for years ago

[NEW YORK] Sony Group is considering spinning off its semiconductor unit, according to sources familiar with the matter, marking the PlayStation maker’s latest effort to streamline its business and focus on entertainment.

The spinoff and listing of Sony Semiconductor Solutions may occur as soon as this year, the sources said, asking not to be named discussing a private matter. Sony is considering distributing the bulk of its holding in the chip business to shareholders, and may retain a minority holding after the spinoff, one of the sources said.

Deliberations are ongoing and the plan may change, especially given the volatility of markets in the wake of US President Donald Trump’s tariffs, one of the sources said.

A representative of Sony declined to comment. A Sony Semiconductor spokesperson said he could not comment on speculation.

Sony, which is also planning to spin off its financial arm, is following some of billionaire investor Dan Loeb’s blueprint to unlock billions of US dollars in shareholder value, years after resisting pressure from Loeb’s Third Point for the company to do so. The fund sold its Sony American depository receipts in 2020.

Operating profit margins at Sony’s imaging and sensing solutions segment has been steadily declining from about 25 per cent to a little over 10 per cent over the years. By contrast, Sony’s gaming and music segments have led profit growth in recent quarters, with operating income growing by 37 per cent in games and 28 per cent in music in the December quarter.

For the chip business, which makes industry-leading image sensors that go into cameras inside Apple and Xiaomi phones, a spinoff could give it greater flexibility to make faster business decisions and raise funds.

Growth at the unit has stalled due to sluggish global smartphone demand – with US tariffs further weighing on the sector’s outlook. Sony’s semiconductor business also faces declining margins, higher costs and new competition from Chinese chipmakers who are catching up. BLOOMBERG