The Cell processor, which is the heart and soul of the Sony Playstation, is set to be manufactured by Toshiba after Sony sold out of manufacturing the cell processor for a billion dollars.
Sony plans to sell its chip lines, including the fab that makes the Cell microprocessor, to Toshiba for A$1 billion dollars according to the Nikkei news agency in Japan.
The proposed move would end Sony’s efforts in semiconductor production for the Cell processor. As part of the plan, Toshiba and troubled Sony would form a joint fab venture for the Cell processor, according to the report. Toshiba would own most of the venture, but Sony would have a stake, according to the report.
The deal includes the fab lines that make the Cell processor, according to the report. The processor was co-developed by Sony, Toshiba and IBM. The chip is used in Sony’s PlayStation 3 game console.
As previously reported, Sony has been moving its semiconductor business from vertically integrated operation to a “fab-lite” model. The move would involve outsourcing production of the Cell processor.
Instead, Sony intends to focus internally on three areas: imagers, game LSIs and system-on-chip LSIs for audio/video devices.
The move is a major break from Sony’s previous strategy to develop and manufacturing core chips internally, a philosophy that remains a top priority for rival consumer electronics giant Matsushita.
In an effort to support the Cell processor, Sony had made a big investment on its most advanced 65-nm fab in Nagasaki. The Nagasaki fab started operation in 2004 and is now fabricating 65-nm Cell processors. Sony had been considering a move to outsource the production of the 45-nm Cell processor, expected to begin in late 2008.
Sony has invested a total of 460 billion yen (about $3.8 billion) on semiconductors over a three-year period ending next month. Of this amount, 200 billion yen ($1.7 billion) was spent on the Cell processor.
Sony is collaborating with Toshiba and NEC Electronics to develop 45-nm process technology. The collaboration will end in March. But, Sony, Toshiba and IBM started joint R&D for 32-nm device technology in March 2005.
