Toshiba to buy rival Sony's chip ops for $835 Mn

By siliconindia   |   Friday, 22 February 2008, 19:38 IST
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Tokyo: Just a day after announcing that it would quit its high-definition DVD business, conceding its defeat to rival Sony, Japan's Toshiba has said it had agreed to pay $835 million for Sony's high-performance semiconductor operations. Though fierce competitors in other areas, the two companies said they had firmed up a deal to form a semiconductor joint venture owned 60 percent by Toshiba and 40 percent by Sony. A joint statement said that Toshiba will pay 90 billion yen for its rival's operations in western Nagasaki to make advanced semiconductors, including the brains inside Sony's PlayStation 3 video game console. Toshiba will then loan the chip lines to the joint venture, which will start operating in April. In October, Sony announced a basic agreement to sell the chip facilities to Toshiba as part of efforts to streamline its operations. Another object of the sale of the chip lines is to reduce the cost of producing the PS3 as Sony struggles to recoup its huge investment in the console, which is facing fierce competition from Nintendo?s Wii. Day before, Toshiba had said it would stop selling its HD DVD machines by the end of March, clearing the way for the Blu-ray format developed by Sony and its partners to dominate the next-generation market.

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