To counter the strong yen, Sony Corp. plans to relocate overseas all assembly processes for lithium ion batteries, which are in rising demand for use in cellphones and electric vehicles, sources said.
The relocation to plants in China and Singapore is expected to be completed by March 2014, the sources said.
The company’s domestic plants will instead focus on the production of principal battery parts.
Production will be phased out at Sony’s Tochigi Plant in Shimotsuke, Tochigi Prefecture, which is now dedicated to assembling lithium ion batteries. The divisions in charge of battery design and development will be consolidated, and the plant will be remodeled into a research base.
The approximately 500-strong work force there may be eligible for relocation or voluntary retirement, the sources said.
Two other plants in Koriyama and Motomiya, both in Fukushima Prefecture, will also come under review.
The functions of the Koriyama and Motomiya plants will be limited to the production of electrodes, which play a crucial role in determining battery performance. Sony may expand their production in accordance with future demand.
The market for lithium ion batteries is expected to continue growing at more than 10 percent annually.
Sony plans to define lithium ion batteries as a mainstay business and build a production system resistant to an extremely strong yen level above 80 yen to a dollar.
Sony's annual revenue from its battery businesses total about 180 billion yen ($2.33 billion).
In 2010, the company accounted for about 10 percent of the global market for lithium ion batteries, the fourth largest.
The historic appreciation of the yen is making it more difficult for Sony to compete against South Korea's Samsung SDI Co., with the second-largest market share, and South Korea's LG Chem Ltd., which ranks third.
Japan's Panasonic Corp. group, the market leader, has also come up with a plan to consolidate its domestic plants and increase production in China.
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