Toshiba, Sony gives peace a chance with semiconductor alliance

A day after Toshiba announced the end of its HD DVD format drivers, the Japanese hardware vendor has signed a definitive agreement with former format player rival, Sony, to form a joint venture for the production of semi-conductors, including products for Sony Computer Entertainment Inc’s (SCEI) PlayStation computer entertainment systems.

Despite waging war against each other over format players , Toshiba, Sony and
SCEI started discussing the possibility of entering into a joint venture last year.

The agreement follows an 18 October 18 2007 memorandum of understanding between the parties.

Under the terms of the definitive agreement, the joint venture - to be named at a later date - will start operation from April 1, 2008 in Nagasaki Technology Centre of Sony Semiconductor Kyushu Corporation (SCK).

It will be 60 percent owned by Toshiba, and Sony and SCEI will each take a 20 percent stake.

Within the fiscal year ending March 31, 2008, Toshiba will acquire from Sony and SCK for approximately 90 billion yen, the 300mm wafer line installed in SCK’s Nagasaki Technology Centre Fab2, with the exception of some equipment, and plans to make it available to the joint venture at the start of operation. Details of the operation including administrative and operation organisation will be finalised by the start-up date.

Semiconductors to be manufactured by the joint venture include “Cell Broadband Engine” (Cell/B.E.) processor, the “RSX” graphics engine and other Semi conductors for Sony Group; as well as Toshiba’s SoCs (System on Chip) for applications in digital consumer products.

Manufacturing will start with 65nm process and the joint venture will promote migration to 45nm process mass production, in cooperation with Toshiba’s system.