Sony denies chip operations sale

04 Oct 2007

Sony is looking at ways to improve its chip operations but has reached no decision on whether to sell it, the company said, denying Japanese media reports that it has struck a deal with Toshiba.

Toshiba spokesman Keisuke Omori also said no deal has been decided.

Japan's top business daily, The Nikkei, reported that Sony has decided to sell its advanced computer chip production operations to Toshiba, which partnered with Sony and IBM in developing the 'Cell' microprocessor.

The speculation about the future of Sony's chip operations comes amid a restructuring at Sony and intensifying competition among the world's computer chip makers.

In general, prices have been dropping not only on lower-end chips but all gadgets, making it harder for manufacturers to maintain profits.

'There's probably two or three things going on in concert,' said Charles King, an analyst with Pund-IT Research. 'It's very expensive not just to produce or develop but also to maintain a hardware platform. It's not something that ends when the finished chip comes out.'

Sony shares fell 2.2% amid market expectations that the company will have to shoulder losses in selling its chip-making facilities to Toshiba. Toshiba shares dipped 0.6%.

Sony has been saying for months it's exploring ways to streamline its chip business as it focuses on home entertainment devices. 'But nothing concrete has been decided,' Sony spokesman Tomio Takizawa said. -- AP

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