Sony, Toshiba finalize transfer of Cell chip production

October 18, 2007 – Making official what had been reported for weeks, Sony and Toshiba have announced an agreement to transfer Sony’s Cell microprocessor production lines to Toshiba under a new joint venture, reportedly at a price approaching 100 billion yen (about US $870 million).

The deal involves setting up a JV majority owned by Toshiba (60%), with 20% stakes each by Sony and Sony Computer Entertainment Inc., to take over 300mm lines at Sony Semiconductor Kyushu Corp.’s Fab 2 at the Nagasaki Technology Center, by the end of the current fiscal year (March 2008). The as-yet-unnamed JV, capitalized at 100M yen (US ~$857K) with top execs appointed by both sides (chairman/ and CEO by Toshiba, president and COO by Sony), will make chips for the Playstation 3 system using 300mm/65nm and eventually 45nm mass production.

As part of the deal, Toshiba also will take over assets from another Toshiba-Sony JV, Oita TS Semiconductor Corp., formed in 1999 to make chips for the Playstation 2 system, and slated to expire at the end of this fiscal year. Toshiba also will purchase Sony’s manufacturing equipment for making its RSX image-processing chips for the PS3, made in the firm’s Oita plant, for about 30B yen (~$257M), reports the Nikkei daily.

For Toshiba, the deal positions it to push 45nm Cell processors in two years for use not just in Sony’s PS3 but also in PCs and flat-panel TVs, making the Cell the No.2 profit driver in the company’s semiconductor business behind flash memory, notes the Nikkei daily. Toshiba reportedly is selling its original HQ in Tokyo’s Ginza district to help fund this new JV with Sony.

Sony has spent roughly 200B yen (~$1.74B) on facilities to fabricate the Cell processor, but investments were expected to soar with a shift from 90-65nm processes to the next version of Cell chips using 45nm processes. So, earlier this year Sony indicated it would likely “significantly” reduce semiconductor investments from recent years, including outsourcing production of upcoming versions of its Cell chips. And weeks ago Sony officially shifted some of those investments to focus on its imaging sensors.

In a separate announcement, Sony also has signed a deal with IBM to extend their Cell manufacturing agreement to 45nm SOI, making a lower-power and lower-cost Cell chip for the PS3. Production will be done at IBM’s manufacturing facility in East Fishkill, NY, transitioning from existing 65nm-based work.


Easily post a comment below using your Linkedin, Twitter, Google or Facebook account. Comments won't automatically be posted to your social media accounts unless you select to share.