Sony to sell PS3 chip production lines to Toshiba

By Kiyoshi Takenaka

TOKYO (Reuters) - Sony Corp (6758.T: Quote, Profile, Research, Stock Buzz) will sell its production facilities for making key microchips used in its PlayStation 3 game console to Toshiba Corp (6502.T: Quote, Profile, Research, Stock Buzz), pulling back from the heavy investment needed.

The price and other details have yet to be set, Sony said on Thursday, but sources close to the matter say the price is likely to be in excess of 100 billion yen ($858 million).

The electronics and entertainment conglomerate plans to sell to Toshiba its "Cell" microprocessor output facility in Nagasaki prefecture and "RSX" graphic chip production line in Oita prefecture, both in western Japan, by March 2008.

Toshiba, Sony and Sony Computer Entertainment -- Sony's video game unit -- plan to set up a joint venture next April to run the Nagasaki facility.

Sony said back in February it would cut future chip spending and might not produce an advanced version of the "Cell" chip with 45 nanometer circuitry in-house.

For Toshiba, the world's second-largest maker of NAND-type flash memory chips behind Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz), the purchase of the "Cell" and "RSX" production facilities and future investments in the next-generation chips will help boost its presence in the logic chip market.

CORE BUSINESS

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