Sony plans to sell chip operations to Toshiba

Sony Corp. is selling its advanced computer chip operations to Toshiba, both companies said Thursday in the latest sign that Sony is raising cash and shedding operations to focus on its core electronics sector.

The sale, to be completed by March, includes the manufacturing business for the Cell, the chip that powers Sony's PlayStation 3 video game consoles, Toshiba Corp. spokeswoman Hiroko Mochida said.

Toshiba, which collaborated with Sony on developing and making the Cell, will continue to produce chips for Sony's video game unit, she said.

A new company will be set up in April that will be owned 60 percent by Toshiba, 20 percent by Sony and 20 percent by Sony Computer Entertainment, Sony's gaming unit, to make the Cell and other advanced chips, the companies said in a statement.

The financial terms of the deal were not disclosed.

Toshiba said the agreement will allow it to expand its chip business by increasing order volume.

Flat-panel TVs and other gadgets require advanced chips that are expensive to make, and competition is intense.

Sony's sprawling empire, which includes the movie studio that made "Spider-Man," has been struggling to revive its money-losing electronics business in recent years. But it is still losing money with its gaming unit, which has been battered by the runaway success of the Wii console made by Nintendo Co.

To catch up, Sony beefed up its flat-panel TV business by entering a joint manufacturing venture with Samsung Electronics Co. and has been eager to raise cash for research and development to maintain its image as a technological innovator — something Sony once took for granted.

Last week, Sony launched its financial unit on the Tokyo Stock Exchange in Japan's biggest initial public offering of the year and reduced its stake in Sony Financial Holdings Inc. to about 60 percent from 100 percent.

The ¥348 billion raised in the IPO will go toward beefing up its electronics business, including research into OLED (organic light-emitting diode) displays, and new imaging technology.

Sony's profitability has risen under the leadership of CEO Howard Stringer, the first foreigner to head Sony. Stringer took the helm in 2005 and guided a series of job cuts, plant closures and division spinoffs that included the Aibo, a canine robot that had become a company icon of sorts.