Tue, Feb 18, 2003 - Page 10 News List

Sony wants to use Chinese engineers to create new chips

BLOOMBERG , TOKYO

Sony Corp, the world's second-largest consumer electronics maker, said it may open its first chip-design center in China this year, taking advantage of local engineering talent to develop new consumer electronics products.

"We are considering a facility to develop system chips near Shanghai this year," said Yoshikazu Ochiai, a spokesman at Sony. "There's a growing pool of talented engineers in China and it's important to be close to the market."

China is Sony's fastest growing market for its consumer electronics and the Tokyo-based company wants to use engineers who know the local market best to design local products. The move is encouraging at a time when Sony and other electronics makers have seen demand fall, say analysts.

"Sony is diversifying its design base in China, which could help cut costs and boost profitability," said Stefan Labrack, a director of equity sales at WestLB Securities Pacific Ltd, which rates the stock "buy" with a six-month target price of Japanese Yen 7,000 as of Dec. 5, 2002.

Sony's sales from electronics, which accounts for about two-thirds of group revenue, fell 4.6 percent in the quarter ended Dec. 31, and the current quarter will be more difficult, the company said on Jan. 29.

Sony may also set up similar development centers in other Chinese cities such as Beijing and Xian, Ochiai said. He didn't say how much the company would invest or how many engineers the company plans to hire.

System chips, which combine memory, processing and other functions onto a single piece of silicon, are widely used in electronic products including computers, cell phones, video games and digital music players.

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