Sony currently has its core business in Israel in the form of the chip and semiconductor development unit. The Israeli development center focuses on low-power networking chips used in Internet of Things (IoT) devices, wearables, and smart meters. It was acquired in the first place when Sony acquired Altair Semiconductor in 2016. Nonetheless, as a strategic measure to concentrate on its main business of entertainment and imaging sensors, Sony has also been vigorously attempting to market its Israeli chip operations, which cost it $300 million in 2025. Also, Sony has recently retrenched over 100 workers in its semiconductor research and development plant in Hod Hasharon in Israel, cutting its staff there by an estimated quarter.
History of Sony
On the retirement of Ibuka in the 1970s, Morita replaced him as chairman until the year 1994 and led Sony to become a global consumer electronics innovator. Other products that were regarded as landmarks include the Walkman portable music player, Trinitron color television, and the co-development of the compact disc.
Besides the electronics, Sony ventured into the business of the home video game console in 1994 with the introduction of the PlayStation, and took over Columbia Pictures and Columbia Records in 1988 and 1989, respectively. The corporation established a financial services division in Japan as part of its ongoing diversification efforts. As it moved into a holding company structure in 2021, the corporation changed its name to Sony Group Corporation, while its electronics division remained known as Sony Corporation.
Sony’s presence in Israel
In 2005, it formed the Israeli R&D center, located in Hod Hasharon, and it focuses on designing low-power LTE chips, mostly in Internet of Things (IoT) products, including wearables and smart meters, and other connected items. In 2016, Sony sold the center to it for $212 million. This facility deals with digital signal processors with AI integration, system on a chip, which comprises modems, application processors, and power management, ultra-low power consumption, small chip sizes, and in-built security.
Despite having cutting-edge technology, Sony Semiconductor Israel has not expanded much and is regarded as a specialized business within Sony’s global portfolio. Sony has been considering a $300 million sale of this subsidiary in 2025 as part of a strategy reorientation to focus on its more lucrative entertainment-facing businesses, such as gaming, music, and imaging sensors. In the midst of global restructuring measures, Sony also laid off almost 25% of its local workers. In contrast to the cellular chip unit situated in Israel, Sony’s primary semiconductor operation, which focuses on CMOS image sensors and smartphone camera processors, is still autonomous and very profitable.
Focus of Sony Semiconductor Israel
In 2025, Sony Semiconductor Israel will mainly concentrate on creating, designing, and manufacturing cutting-edge, low-power cellular IoT chipsets. Among their product offerings are:
- Internet of Things (IoT) devices that require extremely low power consumption and secure communication are best served by LTE CAT-M and NB-IoT chipsets.
- By doing away with physical SIM cards, cellular IoT solutions with integrated SIM (iSIM) technologies improve security while lowering device size and cost.
- Chipsets are produced to support such consumer and business Internet of Things applications as wearable technology, smart meters, asset tracking, car telematics, connected health gadgets, and smart city infrastructure.
- Among the advanced technology features are digital signal processors (DSPs), security layers in the form of hardware, ultra-low power ARM Cortex-M4 microcontrollers, AI-based image sensing, compatibility with global networks with fallback to the 2G/GSM, and others.
- Key differentiators are long battery life, speedy time to market with robust software architecture, and easy integration into the IoT ecosystem of clients.
- creation of solutions that provide smooth transitions between non-terrestrial networks (satellite connection) and terrestrial LTE networks, extending coverage to isolated and underserved areas.
Workforce and operational changes in 2025
As part of a larger global restructuring initiative, Sony Semiconductor Israel underwent major operational and personnel changes in 2025. Important points consist of:
- In its semiconductor research and development center in Hod Hasharon, Sony retrenched over 100 employees, or about 25 per cent of 400 local workers who had previously worked in the center.
- The global cost-cutting and streamlining program of Sony consists of these layoffs in a bid to get the best out of its business focus, with the special focus being on its entertainment and high-margin segment.
- The Israeli center is not being closed, despite the magnitude of the cuts. With an emphasis on core R&D capabilities in cellular IoT chips, it continues to be strategically significant for Sony’s semiconductor innovation.
- The factory, which Altair Semiconductor purchased in 2016, focuses on producing small, low-power wireless chips for wearables and smart meters, among other Internet of Things applications.
- Cuts to the workforce reflect similar cycles of reorganization that Sony has previously undergone, reflecting changes in the market and internal profitability issues.
Strategic shift: Sale and divestment plans
Sony Semiconductor Israel has major strategic change objectives for 2025. As part of a portfolio restructure to concentrate more on its extremely lucrative entertainment businesses like gaming, music, and film, Sony is aggressively investigating the possibility of selling this Israeli cellular chipset company, which is valued at about $300 million. Sony hired investment bankers to investigate the sale of Sony Semiconductor Israel, a manufacturer of low-power connection chips for Internet of Things devices like wearables, smart meters, and linked appliances. Although this division makes around $80 million a year, it has to contend with fierce competition in the market, declining profit margins, mounting pressure from Chinese chipmakers, and US tariffs.
Sony purchased Altair Semiconductor for $212 million in 2016, but it now believes that reallocating funds to content and entertainment companies is a more strategic fit. With over 60% of its 2024 profits coming from high-margin, recurring-revenue industries, the disposal fits with Sony’s strategy. In order to increase shareholder value, there is conjecture regarding a potential spin-off or restructuring of Sony’s semiconductor division as part of a larger semiconductor restructuring. Financial investors and semiconductor industry participants are among the potential customers drawn to Sony’s innovative IoT chip technology.
Market and industry context
Sony Semiconductor Israel works in the fiercely competitive and developing semiconductor business, which is primarily focused on cellular IoT chips, in the market and industry context of 2025. Among the most important market and industry insights are:
Market position and difficulties
In order to increase its presence in the market for low-power cellular IoT chips used in wearables, smart meters, and connected appliances, Sony Semiconductor Israel, formerly Altair Semiconductor, was purchased in 2016. Even though it generated about $80 million in recurring income annually, the company was unable to establish itself as a major growth engine for Sony’s portfolio. US tariffs on Chinese imports, increasing competition by Chinese chipmakers, and a stagnant smartphone and cellular IoT chip demand have all helped to drive a decline in profit margins. The global semiconductor market is also experiencing a series of rapid technical transformations, as it can be seen in the increasing demand for AI-driven chips, automotive-grade semiconductors, and advanced image sensors, in which Sony is a market leader in all these aspects.
Considering the sensitivity of the international semiconductor market, Sony Semiconductor Israel is a challenging market, which has been experiencing declining profitability. There are still powerful industry and governmental incentives to continue the growth of the Israeli semiconductor industry. Sony is deliberately shifting its focus from specialized cellular chipsets to industry leadership in semiconductors for imaging and entertainment.
