http://online.wsj.com/article/SB118982504239228518.html?mod=yahoo_hs&ru=yahoo

Sony Considers Selling Production Facility
By YUKARI IWATANI KANE
September 14, 2007 11:20 p.m.

TOKYO -- Sony Corp. is considering selling the production facility where it makes the advanced processor used in its PlayStation 3 videogame console, as part of its ongoing effort to focus more on its core electronics business.

People familiar with the situation said the company was in discussions with Toshiba Corp., Japan's largest chip manufacturer, which had worked with Sony and International Business Machines Corp. to develop the so-called Cell chip. They said a deal could be reached by the end of the year.

Such a move would fit into Sony's overall strategy to focus on products in its mainstay consumer electronics business and make chips only in areas where it has a competitive edge, such as the specialized chips used in digital cameras.

Sony invested 200 billion yen ($1.7 billion) a few years ago to develop the Cell processor, which is significantly more powerful than the chips typically used in PCs. But it would need to make a significant investment again to make the next-generation version. Toshiba and IBM both have the capability to make the same chips.

For Toshiba, the deal would help beef up its processor business, which is not as strong as its flash memory business.

Geeeeeez. $1.7 bil just to make the Cell processor...

Hopefully they can recoup some of the losses by selling the chip factory. Then they can just buy the chips directly from IBM, which is what they should have done in the first place anyway, and just forgot about inventing a new chip, lol.

Good, they are spread all over a bit to much.

Better to focus on s few things then do everything.

So this is how Sony is going to cut costs for the PS3, nice job Sony.

I don't know what to read into this. The only real application for these chips right now is the PS3. One would think they could maintain a tighter supply line if they kept it in house. I guess they can't run it profitably, otherwise why would they sell?

 IBM uses these as well, they have a Cell Blade out. 

You're right there are other uses, but is that business anywhere near the volume for the PS3?

I do think it's interesting they would hand over production of such a vital component to the biggest backer of HD-DVD. I guess business makes for strange bedfellows.

I don't think the HD-DVD, Blu-Ray war is on the top list of company priorities...

Sale not hand over.

And Toshiba helped design the Cell for Sonys PS3 the biggets backer of Br, for all your little stock opinions you really dont know how business works.

 the cell servers are in higher demand as they are fast as hell. The transfer speed for the cell makes the servers perfect for gaming servers and corporate servers.