Sony to sell chip facility to Toshiba for $835 mln

TOKYO Wed Feb 20, 2008 1:38am EST

The new Playstation 3 control and box are displayed at a Sony Computer Entertainment America news conference in San Francisco, California, October 19, 2006. Sony Corp said on Wednesday it will sell its microchip production facilities in western Japan to Toshiba Corp for 90 billion yen ($835 million), in their latest move to focus on their core businesses. REUTERS/Kimberly White

The new Playstation 3 control and box are displayed at a Sony Computer Entertainment America news conference in San Francisco, California, October 19, 2006. Sony Corp said on Wednesday it will sell its microchip production facilities in western Japan to Toshiba Corp for 90 billion yen ($835 million), in their latest move to focus on their core businesses.

Credit: Reuters/Kimberly White

TOKYO (Reuters) - Sony Corp (6758.T) said on Wednesday it will sell its microchip production facilities in western Japan to Toshiba Corp (6502.T) for 90 billion yen ($835 million), in their latest move to focus on their core businesses.

The equipment will be used by their semiconductor joint venture that will make high-performance Cell chips and RSX graphic chips, both used in Sony's PlayStation 3 game console, as well as other microchips that go into Toshiba products.

The venture will be established on April 1.

Sony, which is focusing on image sensor chips for digital cameras and pulling away from heavy investments for cutting-edge chip production equipment, said in October it would sell production facilities for making key microchips used in the PS3 to Toshiba, but the price has been unavailable.

The announcement on the selling price comes on the heels of Toshiba's decision on Tuesday to abandon its HD DVD high-definition DVD format, ending a prolonged battle with the Sony-led Blu-ray camp.

Toshiba twinned the HD DVD exit with an announcement that it and partner SanDisk Corp (SNDK.O) would spend $16 billion on two new flash memory plants.

Shares in Sony were up 2.8 percent at 5,150 yen in afternoon trade while Toshiba fell 2.8 percent to 801 yen. The Tokyo stock market's electrical machinery index .IELEC.T was down 2.1 percent.

(Reporting by Kiyoshi Takenaka, Editing by Michael Watson)

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