Sun, Sep 16, 2007 - Page 11 News List

Sony ponders chip plant options

BEYOND HARDWARE Intel on Friday agreed to bUy Havoc Inc, a maker of software for video game developers, to help developers take advantage of its technology

BLOOMBERG AND AP , TOKYO AND SAN FRANCISCO

Sony Corp, the world's second-largest maker of consumer electronics, is considering options for its chip business, a company official said in response to a report that it plans to sell some of its chip production facilities.

Sony, based in Tokyo, will sell some of its advanced chip production lines to Toshiba Corp, Japan's largest chipmaker, for about ?100 billion (US$867 million), the Nikkei English News reported earlier yesterday.

"We are considering various options for our advanced chip production," said Tomio Takizawa, a Sony spokesman, in a telephone interview yesterday. "Nothing specific has been decided."

The production lines are located at a plant in Nagasaki Prefecture of Japan's southern island of Kyushu, which makes advanced chips, including the core chips for Sony's PlayStation 3 game consoles.

The core chip, called "Cell," is used for the micro processing unit of the game console and was developed in cooperation with Tokyo-based Toshiba and International Business Machines Corp.

Sony in February had said it may give up making the most advanced version of the Cell chips and would consider an option of outsourcing the production.

The plant also makes chips used for image-processing components of the game console and for Sony's video cameras.

The Nikkei report said Sony and Toshiba will establish a joint venture that will use these lines to manufacture system chips.

Although Toshiba will take a majority stake in the venture, Sony will be the principal buyer of the chips and will have a say in the company's management, the report said.

Sony Computer Entertainment Inc could take a stake as well, it said.

The deal, expected in several months, will be worth nearly ?100 billion, the report said.

"We are considering options to strengthen our chip operations, but it is not true that we have decided" to buy Sony's chip production lines, Toshiba spokesman Keisuke Omori said yesterday.

Though Toshiba is Japan's largest chipmaker, raking in about ?1.3 trillion in sales last year, it ranks third in advanced system chips, the Nikkei said.

Through the planned purchase, Toshiba hopes to boost sales and catch up with foreign chip making rivals such as Intel Corp and South Korea's Samsung Electronics Co, the report said.

Separately, Intel on Friday agreed to purchase Havok Inc, a maker of software for video-game developers.

Intel, which is based in Santa Clara, California, said in a statement that the acquisition will help animators and game developers take advantage of its technology.

Terms of the purchase were not disclosed.

Havok's programs allowed developers to create the movement of characters in video games such as BioShock and Microsoft Corp's Halo 2. The software was also used to produce special effects in films including The Matrix and Troy.

The company was founded in Dublin in 1998 and has operations in San Francisco, San Antonio, Stockholm, Kolkata, Munich and Tokyo. It will become a wholly owned unit of Intel.

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