Report: Sony to Sell 'Cell' Operation to Toshiba

September 17, 2007 | By: James Brightman

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Is Sony giving up on the semiconductor business? Reports from major news outlets across the globe are indicating that Sony may sell its production facilities for advanced chips (such as the PS3's Cell) to Toshiba. [Update: Sony denies sale... for now]

According to reports from Reuters, AP and a number of other major news outlets, Sony is in talks to sell off its production facilities for advanced microchips, including the Cell used in the PlayStation 3, to Toshiba. The reports stem from an article in Japan's business daily, Nikkei.

The paper claims that Sony is planning on selling the production facilities to Toshiba for about 100 billion yen ($869.7 million) and that an agreement is likely within a few months. That said, both Sony and Toshiba declined to comment on the Nikkei story.

The deal would apparently be a part of Sony's strategy "to shed costly semiconductor assets and focus on the production of strategic products such as image sensor chips used in digital cameras and camcorders," according to Reuters.

Toshiba, you may recall, along with IBM co-developed the Cell processor, which has been dubbed a "supercomputer on a chip."

In order to ensure that Sony's Cell supply for its PS3 is unaffected by the sale, the Nikkei claims that Sony may also set up a joint venture with Toshiba to take over actual production activities. Furthermore, according to the AP, while the game unit Sony Computer Entertainment could take a stake in the venture, Toshiba will take a majority stake. Sony, however, will still be the principal buyer of the chips and will have a say in the company's management.

Although Blu-ray has often been cited as a major factor in the PS3's high cost, the development of the Cell chip has certainly played its part. Sony spent approximately 200 billion yen ($1.7 billion) on the Cell's development and production during the last three years through March 2007.

[UPDATE] A new AP article now indicates that Sony has denied the Nikkei report. Spokesman Tomio Takizawa noted that Sony has been exploring ways to streamline its advanced chip business since early this year, but "nothing has been concretely decided." Takizawa would not confirm whether or not the sale has been discussed with Toshiba. Toshiba spokesman Keisuke Omori was similarly evasive: "We are considering various plans, but we cannot comment on individual cases."