RSSSony to Offload Cell PS3 Chip Plant to Toshiba
By Scott M. Fulton, III | Published October 18, 2007, 11:15 AM
It is one of the crown jewels of what is known in Japan as "Silicon Island" - a major processor fabrication facility on Nagasaki, where employees are said to take lunch breaks by walking out the front gates, through the private golf course, and alongside the ocean. In 2001, it was part of Sony's multi-billion-dollar consolidation of three of its manufacturing entities into what was planned to be a single, global powerhouse, setting new standards for efficiency and quality control.
This morning, as part of a different kind of corporate consolidation altogether, multiple Asian news sources report that Sony's Kyushu semiconductor division has agreed to sell 60% of its 300 mm Nagasaki fab -- the key facility in the manufacture of the Cell BE processor that powers the PlayStation 3 -- to Toshiba.
The Memorandum of Understanding, reportedly signed yesterday, would divide Sony's remaining share of the facility between two divisions, with a 20% stake going to the corporate home division, and 20% to Sony Computer Entertainment, the PS3's parent.
Rumors of the sale had been confirmed by some sources and denied by others last month. However, the details of those early reports were actually wrong, having jumped to the conclusion that Toshiba would end up owning all of Kyushu's Nagasaki facility.
If the actual deal -- not the rumored one -- goes smoothly, the intent is for production of the PS3's central processor to proceed as before, or perhaps better than before. It doesn't sound so smooth when you examine the math, but given that Sony apparently had trouble managing its own fabrication operations centrally, there's a good chance Toshiba may do a better job of it.
Reports say that the deal would establish a new joint venture, yet to be named, with Toshiba owning 60% and its executives picking the leaders. Sony still retains principal possession of the Cell's design and intellectual property, though as a whole, the Cell's IP is already shared between Sony, Toshiba, and IBM (which contributed the Power processor core design).
Oddly, with SCE now with a 20% stake, the PS3 division's management ability of the Kyushu operations could actually increase as a result.
Meanwhile, one of Sony's other operations that before 2001 had been consolidated into its Kyushu manufacturing arm, becomes its own entity again, according to reports. And that entity -- the spun off Oita TS Semiconductor -- will be controlled by a separate joint venture in which Toshiba controls 51%, and various interests of Sony the other 49%. That's important because Oita will continue to build accessory parts of the PS3, giving Toshiba management oversight over far more than just its CPU.
While Toshiba executives tell Asian business newspapers the move will give it the opportunity to expand its CMOS manufacturing operations, it also gives Sony some breathing room to concentrate on shoring up its lagging marketing strategy for the PS3 - the part of the job that neither Toshiba nor anyone else right now besides Sony seems to want.
This is only the beginning for Sony, with ALL there problems Poor PS3 sales, faulty batteries, root kits etc more will be sold off to try and recoupe some of their losses. This is nice to see.
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|I'm glad somebody said rootkits, it's been a while and people seem to forget what scumbags Sony are.
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|Good. I like Toshiba. Let's hope they can eventually buy all of Sony's assets as that useless company disappears into the sunset.
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|Yeah, through the equivalent of U.S. chapter 7 liquidation proceedings in bankruptcy court when the @#$%ing PS3 utterly destroys Sony Corp's ENTIRE profitability forever (and not just the videogame-focused portions of the company) [LOL]!!!
Makes me glad I defected to Nintendo's Wii this console generation. But then again, let's not forget that Sony made the decisions that led many people to do the same to Nintendo FIRST so it pretty much comes full circle for a lot of us anyway (at least those of us who want to share our fun with people who are not used to a dual-shock style controller). The only thing that could make it better is more carefully thought out motion control schemes for Wii ports - and continued Volish domination by Microsoft for those who prefer HiDef gaming (provided the "three red lights" fiasco is resolved properly of course) - and Sony will be screwed for sure...
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|Check out Dave with the pre-emptive strike.
Defending his precious Sony like a mother, What a dork.
Sony figures, "We've sold all the PS3's that were going to sell, the market has peaked and no one else is interested as even the game developers say the 360 is far superior, so let's offload this turd to Toshiba"
Something like that.
Hey Dave, how's Lair for the PS3 working out for you? Halo 3 is still going strong, about 5.5 million sold I think.
Also coming in the next two weeks, "Sony has pushed back the deadline for 1.1 BD spec as Sony themselves don't have a single player that meets the criteria"
Did anyone notice they are bringing out the 40GB PS3 which they "Had no intentions of selling in the US" right before the 1.1 spec deadline?
I almost fogot, the 40GB does not play PS2 games, nice.......
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|They don’t say 360 is far superior.
They say they both have their strengths and weaknesses, one being a bit more difficult to develop on currently. Nothing about 360 being far superior
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|Laughing at the idiots who think this has anything todo with PS3, HD-DVD vs Blu-ray..
Wake up. Toshiba has ALWAYS been a partner with Sony and IBM on the Cell project.
All this means, is Toshiba are taking more ownership in the manufacturing side.
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|Would you be downplaying it so much if the tables were turned and say, Toshiba was selling something to Sony? Based on your history here and your obvious bias to all things Sony I would say probably not.
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|Disregard. Must remember to hit Reply, not New Commment.
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|so toshiba who seems to be coleading the hd dvd push is now going to also be working with the bloray group?
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|They get money both ways now.
It's a win:win for them.
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|???
This has nothing to do with HD formats.
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|What this mainly shows is that companies themselves are not run by fanboys (well maybe except for Apple; jk), if they were this would never happen. Companies do whatever makes sense to make a profit.
Sony, Toshiba, Microsoft, etc are not enemies with each other. They are competitors for certain products but that doesn't mean they won't do business with each other if it's mutually beneficial to them.
Meanwhile every time a deal like this happen huge flame wars erupt on geek forums and fanboys cry themselves to sleep. See Apple going with Intel for example. Either that or they get all mad and defensive like someone has personally insulted them; see Joey Deacon for example. :D
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|I was about to comment on the same thing. I remembered this being discussed not too long ago.
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|Am I wrong in suggesting this exact same news was here, on BetaNews, around a month ago?
*Edit* Ah yes, that was 'speculation' back then, wasn't it.
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|Well, Paul, you did read the same subject matter a month ago, and if you'll note in our story above, we do link to that. At that time, some sources were out there saying a deal had been reached, others said there was no deal. But the way these stories are leaked to the press in Asia these days is typically "unofficial" - this way, certain sources get the story first, and Bloomberg doesn't.
But was it the exact same news? No, because it appears the deal has been done now, and there are details to be disseminated. Stories can develop in awkward ways, and this one counts as one of the more lopsided ones; but they do develop, and thus they're still important.
-SF3
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