Reuters: Sony in talks to sell chip manufacturing to Toshiba

by Kyle Orland { Sep 17th 2007 at 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

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

Reader Comments (Page 1 of 2)

Crono (NDF - Fire Ring) @ Sep 17th 2007 11:26AM

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

Matt B (SDF ) @ Sep 17th 2007 11:37AM

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

Yum!

FrankTheCrank @ Sep 17th 2007 11:28AM

'scuse my ignorance...

But doesn't Toshiba back HD-DVD?

Frigging WEIRD!!!

upz @ Sep 17th 2007 11:49AM

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.

kip @ Sep 17th 2007 11:51AM

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!

Mr Khan @ Sep 17th 2007 4:10PM

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

Powerlord @ Sep 17th 2007 7:13PM

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.

hvnlysoldr @ Sep 17th 2007 11:30AM

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.

Jonah Falcon @ Sep 17th 2007 11:33AM

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.

hvnlysoldr @ Sep 17th 2007 11:38AM

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.

ukickmydog (NDF - Earth) @ Sep 17th 2007 11:40AM

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

hvnlysoldr @ Sep 17th 2007 11:50AM

"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."

James @ Sep 17th 2007 11:32AM

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

haha, nah I didn't think so either.

Fernando Rocker (NDF - Water Ring) @ Sep 17th 2007 11:38AM

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

Noshino @ Sep 17th 2007 11:47AM

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

hvnlysoldr @ Sep 17th 2007 11:52AM

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.

Fernando Rocker (NDF - Water Ring) @ Sep 17th 2007 11:52AM

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.

Vidikron @ Sep 17th 2007 12:33PM

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

Fernando Rocker (NDF - Water Ring) @ Sep 17th 2007 12:35PM

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

Vidikron @ Sep 17th 2007 12:41PM

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.

mfed3 @ Sep 17th 2007 2:56PM

hes right, it does suck

Mr Khan @ Sep 17th 2007 4:12PM

I doubt Lair will haunt Sony or the PS3

Factor 5 is another matter entirely

HaleysComet @ Sep 17th 2007 11:41AM

What the hell is wrong with this comment system?

HaleysComet @ Sep 17th 2007 11:43AM

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.

upz @ Sep 17th 2007 11:54AM

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

hvnlysoldr @ Sep 17th 2007 12:00PM

"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."

Mightyelf @ Sep 17th 2007 11:48AM

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.

vidGuy @ Sep 17th 2007 11:48AM

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.

Lemmiwinks @ Sep 17th 2007 11:55AM

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

ill trooper @ Sep 17th 2007 1:22PM

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.

Lemmiwinks @ Sep 17th 2007 1:36PM

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.

ukickmydog (NDF - Earth) @ Sep 17th 2007 3:04PM

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

Phranctoast @ Sep 17th 2007 12:04PM

I love how everyone are instaneously business men.

hvnlysoldr @ Sep 17th 2007 12:10PM

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.

ukickmydog (NDF - Earth) @ Sep 17th 2007 12:23PM

Doctor Gero created cell you dumb guy

=D

borland502 (SDF - Macross Ring) @ Sep 17th 2007 1:04PM

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

vidGuy @ Sep 17th 2007 1:11PM

Well some of us are actually educated.

GRANTED @ Sep 17th 2007 2:26PM

or at least consultants

borland502 (SDF - Macross Ring) @ Sep 17th 2007 2:34PM

"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.

Drew @ Sep 17th 2007 3:01PM

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? :-)

vidGuy @ Sep 17th 2007 3:58PM

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.

ruibing @ Sep 17th 2007 1:19PM

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.

cduran01 @ Sep 17th 2007 1:24PM

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.