Sony is selling its advanced computer chip operations to Toshiba, both companies said Thursday, in the latest sign that Sony is raising cash and shedding operations to focus on its core electronics sector.
The sale, set to be completed by March, includes the manufacturing business for the "Cell" chip used in Sony's PlayStation 3 video game console, a Toshiba spokeswoman, Hiroko Mochida, said.
Toshiba, which already had a collaboration with Sony in developing and making the Cell, will continue to produce chips for Sony's video game unit, she said.
A new company will be set up in April, with Toshiba owning 60 percent, Sony getting 20 percent, and Sony Computer Entertainment, Sony's gaming unit, getting a 20 percent stake.
The new unit will make the Cell and other advanced chips, the companies said in a statement.
The financial terms of the deal were not disclosed.
"There were no market-moving surprises," said Mitsuhiro Osawa, a Tokyo-based consumer electronics analyst at Mizuho Investors Securities.
The sale fits Sony's plans to scale back on unprofitable businesses, and gives its chairman, Howard Stringer, funds to invest in factories to make more televisions and digital cameras.
Development of the Cell, in which Sony invested more than ¥200 billion, or $1.7 billion, led to a loss at the chip unit last fiscal year.
Sony has increased profitability under the leadership of its Welsh-born chief executive, Howard Stringer, the first foreigner to head Sony. Stringer took the helm in 2005, and cut jobs, shut plants and dropped unprofitable divisions.
Japan's top business daily, The Nikkei, reported Thursday that the deal was estimated at about ¥100 billion, or $858 million.
Toshiba said that the agreement would allow it to expand its chip business by increasing order volume.
Earlier this year Sony cut its stake in the online broker Monex Beans Holdings, and last year sold interests in a wide range of retail activities like cosmetics and restaurants.
Separately, Sony said that it would rely on IBM for developing and manufacturing the futuristic 45-nanometer chip.
Sony will no longer invest in the IBM operation, but it will continue to work in partnership with IBM on research on the advanced chips, the company said.
Kaz Hirai, the Sony executive in gaming, said that by relying on the IBM and Toshiba partnerships, Sony would be able to better focus on the entertainment business of games.
"SCE is committed to develop further the PlayStation business and offer new and innovative interactive entertainment," he said in a statement.
Flat-panel TVs and other gadgets require advanced chips that are expensive to make, and competition is intense.
Sony, whose sprawling businesses include the studio that made the "Spider-Man" movies, has revived its money-losing electronics business in recent years.
But it is still losing money in its gaming unit, battered by the success of the Wii console from its rival, Nintendo.
Toshiba, an electronics maker that owns a stake in Westinghouse Electric, the U.S. nuclear reactor manufacturer, has done well with its flash-memory chips that are widely used in cellphones and digital players.
Source: International Herald Tribune