Sony plan to sell microprocessor fab to Toshiba

Sonyis reportedly planning to sell its chip lines, including its Cell microprocessor fab, to ToshibaCorp. for $870 million, according to the Nikkei news agency in Japan.

The move would end Sony's efforts in semiconductor production for the Cell processor and outsource the production instead. The Cell processor was co-developed by Sony, Toshiba and IBM and is used in Sony's PlayStation 3 game console. As part of the plan, the company would form a joint fab venture for the Cell processor, with Toshiba owning most of the venture, and Sony having a stake, the report said.

As previously reported, Sony has been moving its semiconductor business from vertically integrated operation to a "fab-lite" model. Instead, Sony intends to focus internally on three areas: imagers, game LSIs and SoC 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 electronicsgiant Matsushita.

In an effort to support the Cell processor, Sony had made a big investment on its most advanced 65nm fab in Nagasaki. The Nagasaki fab started operation in 2004 and is now fabricating 65nm Cell processors. Sony had been considering a move to outsource the production of the 45nm Cell processor, expected to begin in late 2008.

Sony has invested a total of about $3.8 billion on semiconductors over a three-year period ending next month. Of this amount, $1.7 billion was spent on the Cell processor.