UPDATE 1-Sanyo to sell chip unit to ON Semi for $373 mln

* Loss-making Sanyo Semiconductor strong in analog chips

* ON Semiconductor,Sanyo to give news conference at 0800 GMT

TOKYO, July 15 (Reuters) - Japan's Sanyo Electric 6764.T said on Thursday it would sell its loss-making chip unit to ON Semiconductor (ONNN.O) for about 33 billion yen ($373 million) as it focuses on strengths such as environmentally friendly technology.

Sanyo, majority owned by Panasonic Corp (6752.T), plans to pour $1.8 billion into its rechargeable battery and solar cell businesses over the next three years.

The world's No.1 rechargeable battery maker, Sanyo is a small player in the global chip market, but its semiconductor unit is strong in analog chips, especially for visual and audio products.

Analog chips, a majority of which are power management chips, are used in products that involve data such as electrical input, sound waves and pressure, which cannot be broken into ones and zeros -- the stuff of digital signals.

Sanyo Semiconductor, which employs about 8,260 workers, including those at fully-owned subsidiaries, made a 7.1 billion yen loss in the year to March 2010, helping to push Sanyo into a loss for the year.

"Quite apart from the price, it is a good thing for Sanyo to get rid of businesses it is not planning to focus on," said Mitsushige Akino Chief Fund manager at Ichiyoshi Investment Management Co Ltd, noting that the deal was part of a trend towards greater focus in Japanese industry

Last month Fujitsu Ltd (6702.T) and Toshiba Corp (6502.T) said they would merge their mobile phone businesses in October to create Japan's second largest cellphone maker. [ID:nSGE65F0J1]

In October last year, Toshiba Corp took over Fujitsu's hard drive business. [ID:nT191221]

Fund manager Akino said it was less clear how ON Semiconductor, which had revenues of $1.8 billion in 2009, could turn the Japanese business around to make a profit.

ON Semiconductor, known for its aggressive stance on takeover bids, was spun off from Motorola Inc MOT.N in 1999.

It competes with Texas Instruments Inc TXN.N, Intersil Corp (ISIL.O) and Fairchild Semiconductor International Inc (FCS.N) and acquired California Micro Devices for $113 million in cash in January.