Sony sells fab to Toshiba for $833M, confirms PlayStation chip joint venture

A joint venture is planned to focus on the Cell Broadband Engine processor, which is used in the PlayStation system, and the RSX graphics engine.

By Suzanne Deffree, Managing Editor, News -- Electronic News, 2/20/2008

Toshiba Corp, Sony Corp, and Sony Computer Entertainment Inc (SCEI) today detailed an agreement that will see Toshiba buy a Sony 300-mm fab and see the trio form a joint venture for the production of high-performance semiconductors, including products for SCEI's PlayStation gaming system.

Toshiba, Sony, and SCEI first started discussing the possibility of entering into a joint venture in October 2007, when a memorandum of understanding was signed.

Under the terms of the definitive agreement announced today, the joint venture, to be named at a later date, will start operation from April 1, in Nagasaki Technology Center of Sony Semiconductor Kyushu (SCK). It will be 60% owned by Toshiba, and Sony and SCEI will each take a 20% stake.

By March 31, Toshiba will acquire from Sony and SCK the 300-mm wafer line installed in SCK's Nagasaki Technology Center Fab 2, with the exception of some equipment, for approximately $833 million (90 billion yen). Toshiba said it plans to loan the fab to the joint venture at the start of operation.

As originally planned, the joint venture will initially focus on the Cell Broadband Engine (Cell/BE) processor, which is used in the PlayStation system, and the RSX graphics engine. To be true, Sony and Toshiba, along with IBM, first unveiled the Cell processor in 2005. The joint venture will also produce other high-performance semiconductors for Sony, as well as Toshiba's leading edge SoCs for applications in digital consumer products. 

Manufacturing will start with 65-nm process, and the joint venture will promote migration to 45-nm process mass production, in cooperation with Toshiba's system LSI manufacturing operation in Oita, Japan. No timeline for the move to 45-nm production was given.

As signaled by today’s agreement, Sony is continuing its fab-lite strategy, a business model that saw the company transfer its assets in the Oita operation to Toshiba last year. Toshiba, meanwhile, has been adding capacity and planning fab constructions. The company on Tuesday announced a partnership with SanDisk for a new NAND flash fab and separately announced a second fab for additional semiconductor capacity. Both of the new fabs will be located in Japan.