Sony Corp. is in talks with Toshiba Corp. to sell some production lines at its chip-making factories in Kyushu, according to sources.
The production lines make image processors and the most advanced chips used in Tokyo-based Sony's PlayStation 3 game consoles at factories in Nagasaki and Oita Prefectures, the sources said.
Sony, which posted a ¥10 billion loss from its semiconductor operations in the last business year, is reorganizing the division. This week, the firm said it will design chips with Infineon Technologies AG to reduce development costs at its consumer electronics unit.
"We are considering various options to strengthen our chip business, but nothing specific about such a reported sale has been decided," said Keisuke Omori, a Toshiba spokesman, Thursday.
Negotiations are expected to conclude as early as next spring, one of the sources said, without specifying a date.
"The sale has long been expected," said Koichi Hariya, an analyst at Mizuho Securities Co. who rates Sony a "hold." "Sony is pulling out of production of chips related to the PlayStation 3."
Sony in February said it may give up making the core Cell chips used in the PlayStation 3, and will consider outsourcing production.
The Cell, developed in cooperation with Tokyo-based Toshiba and International Business Machines Corp., may be used in consumer electronics, the companies said.
Sony plans to cut investment in the chip business to ¥130 billion in the year ending March 31, from ¥150 billion a year earlier.