Sony Selling Chip Operations To Toshiba

Sony reportedly will stop making advanced chips and instead focus on audiovisual equipment.

TOKYO (AP) — Sony Corp. will sell its Cell microprocessor and advanced chip operations to Toshiba Corp. for nearly 100 billion yen (US$870 million; euro627 million) next year, a news report said Saturday.
Sony will effectively stop making advanced chips and instead focus on audiovisual equipment, according to a report in Japan's largest business daily, Nikkei.
The deal likely will include manufacturing lines for the Cell, the microprocessor Sony codeveloped with Toshiba and IBM Corp. for its PlayStation 3 game console, as well as image-processing chips for game consoles and camcorders, according to the report.
At the same time, Sony and Toshiba will establish a joint venture that will use these lines to manufacture system chips, the report said.
Although Toshiba will take a majority stake in the venture, Sony will be the principal buyer of the chips and will have a say in the company's management, the report said. Its game unit, Sony Computer Entertainment Inc., could take a stake as well, it said.
The deal, expected in several months, will be worth nearly 100 billion yen, the report said.
Though Toshiba is Japan's largest chipmaker, raking in about 1.3 trillion yen (US$11.3 billion; euro8.15 billion) in sales in fiscal 2006 mainly through flash memory sales, it ranks third in advanced system chips, according to the Nikkei.
Through the planned purchase, Toshiba hopes to boost sales and catch up with foreign chip making rivals such as Intel Corp. and South Korea's Samsung Electronics Co., the report said.
Sony and Toshiba officials were not immediately available for comment.
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