Sony to announce sale of chip operations to Toshiba
Sony Corp. is selling its advanced computer chip operations to Toshiba Corp., a Sony official said early today. Speculation had been rife that struggling Sony, seeking to turn around its core electronics sector, would sell some parts of its business, such as its chip manufacturing operations.
The sale is expected to include the manufacturing business for the “Cell” chip used in Sony’s PlayStation 3 video game console and other sophisticated gadgets.
Japan’s top business daily The Nikkei reported today that the deal was worth an estimated 100 billion yen ($858 million) and would be completed by March.
The Sony official, speaking on condition of anonymity because the announcement is yet to be official and involves another party, said the agreement would be announced later in the day.
Toshiba spokeswoman Hiroko Mochida said she was looking into the report but declined to comment.
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 rival Nintendo Co.’s Wii console.
Sony has beefed up its flat-panel TV business in a joint venture with South Korean rival Samsung Electronics Co. and is eager to gain cash to invest in research to highlight its image as a technological innovator -- something Sony had once taken for granted.
Last week, shares of Sony’s financial unit started trading in Tokyo in what was Japan’s biggest initial public offering of the year, which reduced Sony’s stake in Sony Financial Holdings Inc. to about 60% from 100%.
Sony has said it’s using the 348 billion yen ($2.99 billion) it raised in the IPO for its electronics business, such as research for a new kind of flat panel called OLED, or organic light-emitting diode display, as well as imaging technology.
Sony has boosted profitability under the leadership of 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, including the Aibo pet robot.
Toshiba is an electronics maker that owns a stake in U.S. nuclear reactor manufacturer Westinghouse Electric Co.
The company has done well with its flash-memory chips, widely used in cellphones and digital players.
