Sony Group is undertaking a significant corporate restructuring, with plans to divest its cellular chipset business to further concentrate on its thriving entertainment divisions. This strategic maneuver coincides with advancements in its joint venture for electric vehicles, showcasing a dual focus on core strengths and future mobility innovations.

Sony Realigns Business Focus and Unveils EV Ambitions

In a bold move signaling a clear strategic direction, Sony Group is reportedly initiating the sale of its cellular chipset subsidiary, Sony Semiconductor Israel, formerly recognized as Altair Semiconductor. This divestment, which began with the engagement of investment bankers in early stages, is anticipated to generate approximately $300 million. The unit specializes in cellular chipsets tailored for connected devices, including wearables, smart meters, and an array of home appliances, currently reporting annual revenues of around $80 million. Acquired by Sony in 2016 for $212 million, the potential sale reflects Sony's sharpened focus on its highly lucrative entertainment segments: games, music, and films, which collectively contributed over 60% to the company's profits in the preceding year. Additionally, Sony is preparing for a partial spin-off and public listing of its financial services division later this year, alongside exploring partnership opportunities or a 'fab-light' model for its remaining chip operations.

Simultaneously, Sony's collaborative venture with Honda Motor, known as Sony Honda Mobility, is making strides in the electric vehicle (EV) sector. The joint entity emphasizes the pivotal role of artificial intelligence in propelling autonomous driving capabilities and enhancing in-car entertainment experiences as it approaches the U.S. market launch of its inaugural electric vehicle. Leveraging Sony's profound expertise in entertainment and Honda's robust automotive engineering, Sony Honda Mobility aims to carve out a unique niche in the EV landscape, defining its offerings as 'mobility entertainment'. Previous reports have highlighted the joint venture's ambitious plans to introduce three electric vehicle models by the close of the current decade, directly challenging industry leader Tesla. Following the introduction of the high-end Afeela sedan in 2025, an SUV is slated for release in 2027, with a more economically priced compact model expected in 2028 or later. These vehicles will share a common chassis to optimize production costs and expedite development cycles, with the compact variant designed to compete with popular models such as the Toyota Corolla or VW Golf.

Further details emerged at the 2025 CES Conference, where Sony Honda Mobility unveiled significant updates regarding its first EV, the Afeela 1. Plans include manufacturing the four-door sedan in Ohio, with sales commencing in California in 2025 and initial deliveries projected for mid-2026. The Afeela 1 will start at $89,900, inclusive of a three-year subscription to select features, while a premium Signature trim will be offered at $102,900. Reservations are currently open for California residents with a refundable $200 deposit. Boasting an estimated range of 300 miles, the vehicle will also support Tesla's Supercharging network in the U.S. A distinctive feature of the Afeela 1 is its emphasis on advanced driver assistance systems and an integrated interactive personal agent, embodying the concept of 'mobility as a creative entertainment space' through customizable displays and sound systems in each seat. As Sony steps into the competitive EV market, leveraging its legacy in consumer electronics, it confronts the challenge of balancing premium in-car technology with market price sensitivity.

This strategic dual approach by Sony underscores a dynamic re-evaluation of its business portfolio. By shedding non-core assets and intensifying investment in high-growth entertainment sectors, coupled with pioneering efforts in the advanced electric vehicle market, Sony is positioning itself for sustained growth and innovation. The divestment of the chipset unit not only streamlines operations but also provides capital and focus for these strategic priorities, indicating a forward-looking vision for the conglomerate.

Advanced Micro Devices (AMD) CEO Lisa Su recently shed light on the increased production costs of semiconductors manufactured within the United States. During an artificial intelligence event in Washington, Su indicated that chips fabricated by Taiwan Semiconductor Manufacturing Co. (TSMC) in Arizona are approximately 5% to 20% more expensive compared to their Taiwanese counterparts. This revelation comes amidst significant governmental pressure from both the Trump and Biden administrations, which have actively encouraged TSMC to expand its advanced chip manufacturing capabilities on American soil. The underlying motivation behind this push is to enhance national security and fortify the global semiconductor supply chain, reducing reliance on overseas production.

In response to these strategic imperatives, TSMC has committed substantial investments, totaling over $65 billion, towards its Arizona fabrication facilities, with plans to potentially invest up to $100 billion over the next four years. Despite the higher cost implications, Su underscored the critical strategic value of these domestic investments for AMD, emphasizing their role in strengthening the company's chip supply chain and ensuring greater reliability. She also highlighted a positive development: TSMC's Arizona plant has already achieved yield rates that are on par with its established facilities in Taiwan, signifying a successful transfer of manufacturing expertise. AMD expects to receive its initial consignment of chips from the Arizona plant by the close of the current year. The broader semiconductor market, encompassing major players like AMD and Nvidia, continues to experience robust demand for AI chips, although uncertainties persist regarding US export regulations to key markets such as China.

The semiconductor industry's trajectory is deeply intertwined with geopolitical and economic forces, as evidenced by the strategic shift towards domestic production in the US. While higher manufacturing costs may present immediate financial challenges, the long-term benefits of a resilient and secure supply chain cannot be overstated. This move towards localized production not only safeguards against potential disruptions but also fosters innovation and job creation within the country. The unwavering demand for AI chips underscores a future where technological advancement will continue to drive economic growth, compelling nations and corporations to invest in cutting-edge infrastructure and talent. Embracing such challenges as opportunities for growth and resilience ultimately strengthens both national security and global technological leadership.