Sony Confirms Toshiba Cell Chip Plant Buy-Back

Sony has confirmed that it is buying back the Nagasaki Semiconductor Manufacturing Corporation (NSM) Cell production facility from Toshiba, as rumored earlier this week. The plant was sold to Toshiba back in 2008 and then leased to NSM, a joint venture in Cell chip production between Toshiba, Sony and SCEI; once Sony has purchased the plant, the NSM partnership will also be terminated.

The sale is expected to be completed early in the fiscal year ending March 31 2012, after which it's unclear if Toshiba will continue to use the Cell chips in their high-end Qosmio notebooks. Sony uses the Cell technology in the PS3 console.

Press Release:

Toshiba and Sony Sign Memorandum of Understanding for the Transfer of Semiconductor Fabrication Facilities

Tokyo, Japan, December 24, 2010 — Toshiba Corporation ("Toshiba") and Sony Corporation ("Sony") today announced that they had signed a non-binding memorandum of understanding expressing their intent to transfer from Toshiba to Sony the semiconductor fabrication facilities owned by Toshiba and operated by Nagasaki Semiconductor Manufacturing Corporation ("NSM"), a joint venture among Toshiba, Sony and Sony Computer Entertainment Inc. ("SCEI"), and, following the contemplated transfer, terminate their NSM joint venture relationship.

NSM, which was established in March 2008 and is located in the Nagasaki Technology Center of Sony Semiconductor Kyushu Corporation ("SCK"), has been manufacturing the high-performance "Cell Broadband Engine™" processor, the graphics engine "RSX" and other high-performance semiconductors and leading-edge SoC (system-on-a-chip) for applications in digital consumer products of Toshiba and Sony. The facilities to be transferred would be the fabrication facilities and equipment for the 300 mm wafer line located within the Nagasaki Technology Center purchased by Toshiba from Sony and SCK and leased to NSM in 2008 and other facilities that Toshiba and Sony will agree to transfer among those in which Toshiba invested in connection with the operation by NSM after the purchase.

After due diligence on the facilities to be transferred and continuing negotiations, Toshiba and Sony aim to execute definitive agreements (with respect to the contemplated transfer of the semiconductor fabrication facilities) as soon as possible before the end of the fiscal year ending March 31, 2011. Thereafter, Toshiba and Sony aim to complete the transfer early in the fiscal year ending March 31, 2012, subject to any necessary government approvals.