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Toshiba Corp. and Sony Computer Entertainment Inc. announced Thursday they will establish a joint venture to produce a 128-bit central processing unit for Sony’s next-generation video machine.

Sony’s new machine is tentatively called PlayStation2, the successor to PlayStation, which has sold 50 million units worldwide. Toshiba and SCEI have jointly developed the world’s first full 128-bit CPU and plan to begin monthly production of 10,000 units in fall, they said.

The venture firm, to be based in Oita Prefecture, will be capitalized at 100 million yen, with Toshiba owning 51 percent and SCEI 49 percent.

SCEI will shoulder all investment costs for production facilities, estimated at 50 billion yen, they said. SCEI said it wants to control production, without receiving supplies from a third party. Meanwhile, Toshiba officials said they aim to reduce investment risks through the joint venture.

Sega Enterprises Ltd., Sony’s game console rival, has been plagued by a delay in the supply of a key graphic chip for Sega’s new machine, Dreamcast.

The shortage of the chip, provided by NEC Corp., forced Sega to give up all-out sales campaigns during the Christmas and New Year holidays — a hard blow for Sega, which is battling SCEI after losing the 32-bit game machine war.

Observers expect difficulties in stable production of Sony’s new chip, dubbed Emotion Engine, because it requires cutting-edge technologies in 0.18-0.15 micron processes.

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