Sony to sell advanced semiconductor production lines to Toshiba

[one]

http://markets.nikkei.co.jp/kokunai/hot.cfm?id=d1d1406014&date=20070914

The stock market is off today but Nikkei reports in a month or two Sony is going to sell the system LSI production lines at Nagasaki Technology Center in Sony Semiconductor Kyushu that are currently manufacturing Cell and other image processing LSIs for game consoles and cameras. Toshiba buys it for $800 million. Semiconductor design development stays in Sony while Toshiba becomes the main operator of production lines in the new joint company with Sony as one of Sony's suppliers of advanced semiconductors including Cell. While the development of Cell is continued by Sony, the money raised by this sale is expected to be used for the development of final products such as next-gen TV to make Sony competitive in the market, rather than manufacturing components themselves. Sony continues the imager business that has the no.1 share in the world. Toshiba, the largest semiconductor company in Japan, strengthen their business by the purchase to become more competitive in the semiconductor market.

 

[avaya]

Finally Sony move into the real world. Is the new JV going to be listed in Tokyo?

 

[one]

Is the new JV going to be listed in Tokyo?

I don't think so it'll be 51% Toshiba 49% Sony or something like that... this company rents equipments from Toshiba and manufactures chips.

 

[patsu]

Interesting. Both Toshiba and Sony has been talking about next gen TV for quite some time now. Touted features include video conferecing, Internet video playback, advanced image processing based on Cell.

 

[StefanS]

Actually, we (Uttar, me & Co.) were speculating about such a move ever after Stringer took the helm and Kutaragi was put into less and less prominent roles, though we thought it might be a more aggressive move.

Anyway, good find, one.

 

[Color me Dan]

Would the selling off of their "inhouse" manufacturing plant not mean that they have less control over technicall fidelity (production line tech) and quality when having to go through a business partner?

 

[avaya]

I don't think so it'll be 51% Toshiba 49% Sony or something like that... this company rents equipments from Toshiba and manufactures chips.

OK so unlikely to have any positive impact on the share price then. Should of guessed, they normally don't relinquish total control in Japan, which is a good thing.

 

[ADEX]

I don't think is really that big a deal, chips like Cell require an expensive, specialist production line and other than Cell they just don't need it.
For other chips there's a whole line of companies who can make them, in fact there's a whole line of companies who could make Cell, IBM's tech is getting around these days...

You only need a chip production line if you really want to be in the chip manufacturing business and I don't think that's Sony's thing anymore.

 

[Shifty Geezer]

Sony's a large consumer of chips, so if they can get them at cost price, it makes sense to have your own fabs. However, it looks like Sony couldn't keep up with progress and 3rd parties offer them a better deal than making their own.

 

[iceberg187]

Reading news about this today makes it sound like the proceeds will be going towards audio/visual things like televisions and such.

 

[patsu]

Yes it does seem like it. Besides advanced imaging researches, the Sony and Toshiba TV divisions have been looking into Cell adoption for 1-2 years already. Hopefully something comes out of it as indicated in recent Toshiba (and Sony) marketing literature.

 

[ban25]

I wonder if this includes CCD and CMOS camera sensors.

 

[Carl B]

I wonder if this includes CCD and CMOS camera sensors.

Sony is going to maintain control of their imaging lines.

 

[Rangers]

So is this an indication of Cell not catching on outside PS3?

http://www.asahi.com/english/Herald-asahi/TKY200709170055.html

Sony spent up to 200 billion yen on the Cell's development and production over the three years through March 2007.

But the company concluded that it would not be able to recoup its huge investment because the Cell's applications are mostly limited to videogame consoles.

 

[Shifty Geezer]

We know Cell hasn't been catching much because companies aren't using it in CE goods yet! The article is a bit naive though to say its applications are limited to consoles. The high performance being over the top for other applications ignores the scalability of the processor. For Cell to make an appearance in CE goods, you'd expect that to be a reduced performance, much cooler processor. These aren't being made yet. The whole CE side of Cell seems to have been waysided though, with no products and no power-efficient, lower performance models being introduced or even talked about. I don't think the sale of these business is due soley to Cell adoption though. It's been on the cards since Stringer arrived AFAICS.

 

[patsu]

So is this an indication of Cell not catching on outside PS3?

http://www.asahi.com/english/Herald-asahi/TKY200709170055.html

Somewhat true at the moment. Until Sony (and Toshiba) deliver compelling mass market Cell applications themselves, they won't be able to convince others to use it... beyond niches like scientific computing and supercomputing. But that doesn't mean that something is not in the works. We can only hope.

 

[Carl B]

So is this an indication of Cell not catching on outside PS3?

Hasn't caught on in the CE space, that's for certain, but has been doing pretty well on IBM's side of the coin. I think one of the problems(?) for Cell on the CE side was always that it was Kutaragi's vision to begin with, and the build-out of the associated fabs was premised on the idea that these chips would go into Sony's electronics. After he lost his role in heading electronics and semiconductors, the whole vision was set adrift... and it's likely that others within Sony weren't too keen on it.

Toshiba seems on-again/off-again on using Cell in their own electronics; they've got a 65nm CMOS version of it now and have claimed (as previously without effect) that it will see use in the next year, so we'll just have to wait and see if it's idle talk or not.

At the core of the deal, selling these fabs will allow Sony's semiconductor division to increase in profitability (an oft-stated goal) while Toshiba will supposedly find use for the idle capacity beyond the PS3's Cell needs.