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Sony sells advanced chip unit to Toshiba

Sony Corp is selling its advanced computer chip operations to Toshiba, both companies said yesterday, in the latest sign Sony is raising cash and shedding operations to focus on its core electronics sector.

The sale, set to be completed by March, includes the manufacturing business for the "Cell" chip used in Sony's PlayStation 3 video game console, Toshiba spokeswoman Hiroko Mochida said.

Toshiba, which already had a collaboration with Sony in developing and making the "Cell,'' will continue to produce chips for Sony's video game unit, she said.

A new company will be set up in April, with 60 percent Toshiba ownership, a 20 percent Sony stake and 20 percent Sony Computer Entertainment, Sony's gaming unit, to make the Cell and other advanced chips, the companies said in a statement.

The financial terms of the deal were not disclosed. The Nikkei Shimbun reported yesterday that the deal was estimated at ?100 billion (US$858 million).

Toshiba said the agreement will allow it to expand its chip business by increasing order volume.

Sony has beefed up its flat-panel TV business in a joint venture with Samsung Electronics Co and is eager to gain cash to invest in research to highlight its image as a technological innovator.

Last week, shares of Sony's financial unit started trading in Tokyo in what was Japan's biggest initial public offering of the year, which reduced Sony's stake in Sony Financial Holdings Inc to about 60 percent from 100 percent.
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