July 5, 2005 – Matsushita Electric Industrial Co. plans to reduce the number of domestic workers engaged in semiconductor development and production by 1000, or 6%, the Nihon Keizai Shimbun reported Sunday, citing company sources.

The measure, to be implemented through an early retirement program, is designed to raise the cost competitiveness of Matsushita semiconductors used in plasma display panel televisions and other digital electronics products.

The move will bring the number of personnel cuts made under president Kunio Nakamura’s management reform program to 27,000 since fiscal 2001. It is expected to be one of the last steps in the company’s personnel reduction drive.

The voluntary retirement program has already been started at Matsushita’s in-house company at Nagaokakyo, Kyoto Prefecture, which has a total work force of 15,000.

Matsushita will use part of the 35 billion yen (US$313,000) it has set aside for structural reform in the current fiscal year as extra retirement allowances for those who are accepted into the job-cut scheme.

The company has tried to concentrate the resources of its semiconductor business on image processing system chips and image sensors in a drive to make its PDP TVs and other digital appliances more competitive.

Matsushita is building a 130 billion yen chip plant in Uozu, Toyama Prefecture, that is slated to come onstream at the end of this year. The firm wants to trim personnel costs further to allow it to continue to aggressively invest in advanced chip production technology.