About one month ago we reported that Sony was in talks to sell off its production facilities for advanced chips (including the Cell in PS3) to Toshiba. At the time, Sony denied the report, but now according to Bloomberg Sony has signed a preliminary agreement with Toshiba, giving Toshiba ownership of the facilities responsible for producing the Cell chip.

Exact financial terms were not provided, but according to a report in the Nikkei newspaper, Sony will sell part of its semiconductor business to Toshiba for about 100 billion yen ($861 million). This figure has yet to be confirmed by either company, however.

"The two companies will start discussing details of the plan including the price, which will be determined by the end of March next year," said Sony spokesman Chisato Kitsukawa.

Ultimately, the deal "fits Sony's plans to scale back on unprofitable businesses, and gives Chairman Howard Stringer funds to invest in factories to make more televisions and digital cameras," Bloomberg said. The Cell processor has certainly been one of Sony's more expensive endeavors. Development of the chip cost Sony more than 200 billion yen ($1.7 billion) and led to a loss at the chip unit last fiscal year.

As was stated in our previous report, part of the deal includes Sony and Toshiba coming together on a joint venture to make the Cell chips. The final agreement is expected to be completed by the end of March (which marks the end of Sony's fiscal year). Toshiba will reportedly own 60 percent of the venture and Sony will hold the remaining stake.