UPDATE 2-Sony in talks to buy back Toshiba chip line -source

Thu Dec 23, 2010 12:32am EST

* Sony likely to pay about $600 mln to buy facility -source * Sony once sold chip line in question to Toshiba for $1.1 bln * Sony aims to boost sensor chip output with buy back-source (Updates with source-based confirmation) TOKYO, Dec 23 (Reuters) - Sony Corp is in talks to buy a Japanese microchip production line from Toshiba Corp for an estimated 50 billion yen ($598 million) to boost its output of chips for cameras and mobile phones, an industry source said on Thursday.

Sony sold the facility to Toshiba, the world's No.3 chip maker behind Intel Corp and Samsung Electronics Co Ltd , for 90 billion yen in 2008 as part of its "asset light" strategy.

Through the planned buy back of the production lines in southern Japan's Nagasaki prefecture, the maker of PlayStation games and Bravia TVs aims to boost its output capacity of image sensors used in digital cameras and cellphones, the source close the deal told Reuters.

The electronics and entertainment conglomerate is now aiming to raise its CMOS (complementary metal-oxide semiconductor) sensor production capacity due to brisk demand for digital cameras and smart phones.

Sony Executive Deputy President Hiroshi Yoshioka said in an interview with Reuters and other media this week that it was in the process of deciding how to cover a shortage in CMOS sensor output capacity. [ID:nTOE6BJ01C]

Sony is the world's second-largest digital camera maker behind Canon Inc , and runs a mobile phone joint venture with Sweden's Ericsson (ERICb.ST).

The Nikkei business daily said on Thursday the acquisition would double Sony's image sensor output capacity to the equivalent of 40,000 silicon wafers a month. Sony still owns the factory the chip line is housed in.

(Reporting by Reiji Murai, Amruta Sabnis in Bangalore, writing by Kiyoshi Takenaka; Editing by Lincoln Feast)

($1=83.55 Yen)

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