Reuters: Sony in talks to sell chip manufacturing to Toshiba

by Kyle Orland on Sep 17th 2007 11:20AM

Reuters is reporting that a Sony is in talks to sell its chip production facilities to Toshiba, according to "sources close to the matter." The 100 billion yen (about $870 million) deal is reportedly set to finish in a few months and will include the lines for Sony's PS3-powering Cell processor.

Does this mean Sony is giving up on its much-hyped computer-on-a-chip? Not likely -- Reuters says any deal would probably include a Sony/Toshiba joint venture to ensure a steady supply of Cells for Sony systems. The transfer of ownership would provide a cash influx for Sony and probably help Sony cut overhead costs related to staffing and upkeep at the plants.

The move isn't totally out of left field for Toshiba, which helped in the development of the Cell chip along with Sony and IBM and has expressed interest in using the Cell in non-gaming devices

Source

Tags: cell, chip, plant, production, PS3, sony, toshiba

Reader Comments (52)

I'd love to have a Cell powered Scaler or server for converting/transcoding video.

That plus a couple hundred gigs of Solid State HD's too.

Yum!

'scuse my ignorance...

But doesn't Toshiba back HD-DVD?

Frigging WEIRD!!!

Frank, I've always found that ironic too. Sony and Toshiba all buddy-buddy in developing the cell, then going head to head with their own HD video formats.

Yeah, what's to prevent Toshiba from "accidentally" producing a lot of inferior chips that overheat and die on consumers, thereby bricking a lot of blu-ray players... It's a plot! Run, Sony, run!

Sony and Toshiba have worked together a lot in the past on semiconductor stuff, specifically the Emotion Engine and Graphics Synthesizer

See, generally hatred doesn't exist between companies as it does between fans of companies. 20th Century FOX makes one of NBC's best comedies; My Name Is Earl

If Toshiba does start making bad parts, Sony can go back to buying them from IBM... Sony did invest a bunch of money in IBM's East Fishkill plant, after all.

Good news for Sony. If they can reduce the costs to make Cell chips by having a partner share it then they can reduce the PS3 price to something more reasonable.

It won't reduce costs. It'll cost more because now they're paying for the chips instead of manufacturing it themselves.

The sale is a way to make some quick cash because they're deeply in debt.

That's why they're considering a joint venture. Basically Toshiba owns the production facilities but Sony can manufacture the chips including for themselves. I wonder how not trying to produce 45nm will affect them.

they're selling these assets off because they can't afford to get into more debt, this factory is pretty much exclusively making ps3 chips, and there aren't many ps3's to make chips for, so why not just buy them from someone else

"To secure a stable supply of chips for its game machines after the possible sale, Sony is considering to set up a joint venture with Toshiba to take over actual production activities at the manufacturing facilities, the sources said."

Maybe Toshiba will be able to make the PS3 more powerful than the 360?

haha, nah I didn't think so either.

Poor Sony. Well, its not my fault that their console sucks.

Fernando, where have you been? Sony's console doesn't suck...

The PS3 doesn't suck but it just doesn't have the success of the Wii. Sony wants to sell more PS3 at any and all times no matter what they're actually saying.

Well. The Lair ghost and the Framerate ghost and the lack of rumble will always be with the PS3, no matter what Sony try to do.

Why are you so stupid? Seriously, the "Lair ghost"? WTF? Is the MP8 ghost haunting the Wii?

Well, Mario Party is not good, but in the end, MP8 will sell a lot more than Lair.

Sure, but come on, a 'ghost'? You really think the failure of that one game is going to follow the PS3 around forever? Despite it's hype, it was destined to be a niche game anyway. I really don't think that one game failing is going to have much of an impact on the general public's perceptions.

hes right, it does suck

I doubt Lair will haunt Sony or the PS3

Factor 5 is another matter entirely

What the hell is wrong with this comment system?

Reuters says any deal would probably include a Sony/Toshiba joint venture to ensure a steady supply of Cells for Sony systems. The transfer of ownership would provide a cash influx for Sony and probably help Sony cut overhead costs related to staffing and upkeep at the plants.

That was NEVER mentioned in the REAL ARTICLE

Why would Toshiba be helping the competition? If they use these new buildings to build cell chips thats helping to create more ps3 which will be sold (however long it may take) which means MORE bluray players are being sold (since sony fanboys just LOVE to count them in the sales figures).

Doesn't make sense to me.

You do realize that Cell is not purely a Sony technology?

"The sale, which would include production lines for the "Cell" microchips, dubbed "supercomputer on a chip", is 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, they said."
"To secure a stable supply of chips for its game machines after the possible sale, Sony is considering to set up a joint venture with Toshiba to take over actual production activities at the manufacturing facilities, the sources said."

Mmm....
Can some one explain me how it can help sony make cheaper PS3.
Toshiba is japanese company too and they will still produce chips in japan that is far more expensive that China were Xbox360 is produce. Come on the Xbox360 developers works for a cup of rice.
The Ps3 manufacturers work for a full japanese salary.

I do not know, but sony irrational nationalism can be their doom. Is okay produce all in your country to help your economy but when you are competing in the global market. You need to find cheaper manufacturing cost.

Smart move for Sony. They should be getting rid of all the overhead they can, bringing the cost of the PS3 done to the point that they can make a profit on it or, more likely, drop the price to get some market share. Cost structures are very important when the industry you are in likes to play loss-leader.

This is high-larious. Toshiba is the prime proponent of HD-DVD.

I guess you're implying Toshiba would somehow sabotage Blu-Ray... Or it could be the other way - the writing is on the wall, HD-DVD is dying. Either way, what you're implying doesn't make sense, because there is no real connection between cell-processor manufacture and Blu-Ray other than the PS3.

The thing is, it's not high school, it's business: if Toshiba can make more money, they will opt for that. Toshiba likely sees potential in the cell, which is a good chip. As for the whole idea you allude to by saying Toshiba is the main HD-DVD proponant: If Toshiba decides a few years from now there is more money to be made making Blu-Ray players, they will do that. Same with Sony - I have a Sony VHS VCR. Profit happens, and companies will swallow their pride to be part of it.

ill trooper:

I'll thank you to refrain from putting words or thoughts into my mouth. I was implying nothing other than the fact that these two are bitter rivals on one front, but cozying up on the other. And with all the vitriol spewed by the various honchos and partner companies with regards to next-gen video formats, the partnership between these two is kinda funny.

I'm quite familiar with how business partnerships work, thank you very much.

dude, lemmiwinks, i fucking love your avatar pic thing, good job

I love how everyone are instaneously business men.

Right. They've all gone "This won't help Sony it'll actually raise costs!" Or "Toshiba won't help Sony they're competitors on HD" without realizing Toshiba already is part creator of the Cell.

Doctor Gero created cell you dumb guy

=D

Well, it's the internet. Everyone is a lawyer/businessman/venture capitalist/gamer/hax0r/god

Well some of us are actually educated.

or at least consultants

"Well some of us are actually educated."

If you can string a coherent sentence together then congratulations, you passed high school. That doesn't mean it is wrong to doubt that BillGate$525 might be the CEO of Microsoft.

Business isn't that great of a mystery if you actually follow logical reasoning. People here so far have brought up valid points. What's business but a series of negotiations and making sure costs are less than future cash streams? :-)

Oh, I think it'd be wrong to assume people are always who they say they are - I didn't believe JT was actually posting here until Joystiq confirmed it. But to assume that nobody is telling the truth / can think for himself, there's something wrong there.

I didn't know Sony owned a microprocessor fab of its own, I always thought that they have been getting their Cell processors from IBM. This is a move that works to their benefit in the short run, and not the long run. I think they really want to cut the price of their PS3s, which is good news for everyone.

Its simple, Toshiba also sells semiconductor devices to other companies, just like Sanyo, and Philips (though they no longer do since they sold off their plants and now they are NXP). Toshiba's semiconductor is run separately from the Toshiba consumer electronics.

How will this save money for Sony? Simple, right now Sony is making Cell processors for their own use only. Semiconductor fabs are very expensive to maintain, which means Sony was probably running their fabs at a loss. Well if they sell off the fab to another company (Toshiba in this case) that other company will sell semiconductors to a lot of other companies and the revenues of this are enough to keep the fab going.

Sony talked about doing this a year ago, which probably means they will soon pull the plug on the PS2 because they were the only ones making the EE.

all this talk of streamlining operations is making me hot and bothered. seriously though, everyone here has mostly said reasonable comments on the cost savings from this possible decision by Sony.

Seems like a reasonable solution. The are bleeding money due to the PS3 and selling assets will make some quick much needed money.

it'll make stockholders happy for a little bit, until they actually start moving ps3's (if/when that happens)

*Note to the NDF:

I really don't think we need to focus on defense anymore so I took it upon myself to start the offensive.

Protect our base.

All their base are belong to us.

All their install base are belong to us.
Fix'd

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Reuters: Sony in talks to sell chip manufacturing to Toshiba

Reader Comments (52)

Posted: Sep 17th 2007 11:26AM Crono141 said

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