Toshiba and Sony announced Wednesday that they have signed an agreement to form a joint venture to start making advanced chips in April. Toshiba is paying $835 million for Sony's high-performance semiconductor operations under the accord that was first announced last October.

The two companies said they had stepped up the deal to form a semiconductor joint venture owned 60 per cent by Toshiba, with 40 per cent equally split by Sony and its game unit Sony Computer Entertainment Inc.

Toshiba is buying Sony's wafer production lines for advanced "Cell" microprocessors in the southern prefecture (state) of Nagasaki to establish the venture. The chips are used in Sony's PlayStation game consoles as well as in Toshiba's digital consumer goods.

Toshiba and Sony said they plan to complete the transaction by the end of March and Toshiba will then lease the facilities to the joint venture, which will start operating April 1. Sony announced in October a basic agreement to sell the chip facilities to Toshiba as part of an effort to streamline its operations.

The signing of the deal comes the day after Toshiba said it plans to ramp up its chip operations rapidly, an apparent bid to soften the impact of its lost battle in the lucrative next-generation DVD market. (Source: The Canadian Press)

Story filed 20.02.08