Monday, December 27, 2010
Sony to Acquire Toshiba's Cell Processor Semiconductor
Fabrication Facilities, Strengthen Image Censor Capacity
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Toshiba and Sony have signed a non-binding memorandum of
understanding expressing their intent to transfer from Toshiba to
Sony the semiconductor fabrication facilities owned by Toshiba and
operated by Nagasaki Semiconductor Manufacturing Corporation (NSM), a joint venture among Toshiba, Sony and Sony Computer Entertainment Inc. ("SCEI").
Following the contemplated transfer, the companies plans to terminate
their NSM joint venture relationship.
NSM, which was established in March 2008 and is located in the
Nagasaki Technology Center of Sony Semiconductor Kyushu Corporation
(SCK), has been manufacturing the high-performance "Cell Broadband
Engine" processor, the graphics engine "RSX" and other
high-performance semiconductors and leading-edge SoC
(system-on-a-chip) for applications in digital consumer products of
Toshiba and Sony. The facilities to be transferred would be the
fabrication facilities and equipment for the 300 mm wafer line
located within the Nagasaki Technology Center purchased by Toshiba
from Sony and SCK and leased to NSM in 2008 and other facilities that
Toshiba and Sony will agree to transfer among those in which Toshiba
invested in connection with the operation by NSM after the purchase.
After due diligence on the facilities to be transferred and
continuing negotiations, Toshiba and Sony aim to execute definitive
agreements (with respect to the contemplated transfer of the
semiconductor fabrication facilities) as soon as possible before the
end of the fiscal year ending March 31, 2011. Thereafter, Toshiba and
Sony aim to complete the transfer early in the fiscal year ending
March 31, 2012, subject to any necessary government approvals.
The move is part of Toshiba's effort to reconstruct its System LSI
business, with the goal of boosting profitability.
Toward accelerating decision-making speed and optimizing use of
management resources, Toshiba's systen LSI division will be
reorganized into two: the Logic LSI Division, responsible for
cutting-edge SoC (system-on-chip) fabricated on 300mm wafer
fabrication lines; and the Analog and Imaging IC Division, which
supplies key components for a wide range of products.
The Logic LSI Division will promote a flexible manufacturing strategy
responsive to demand volatility by combining use of its own
production line with outsourcing. The division will expand
outsourcing of cutting-edge products, including 40nm products, to
multiple foundries from fiscal year.
The Analog and Imaging IC Division will concentrate on analog ICs and
imaging ICs, particularly CMOS image sensors, and use existing
production lines at Oita Operations, including 300mm wafer lines, and
Iwate Toshiba Electronics Co., Ltd. The main focus will be
general-purpose products, allowing the division to streamline its
production lines. This approach is expected to support business
expansion and to enhance profitability.
Sony will also invest approximately 100 billion yen in Sony
Semiconductor Kyushu Corporation's Nagasaki Technology Center
(Nagasaki TEC) in the fiscal year ending March 31, 2012, to increase
the production capacity for CMOS image sensors.
This investment plan includes (i) the transfer of the semiconductor
fabrication facilities from Toshiba (previously mentioned) , (ii)
refurbishment of a part of the above semiconductor fabrication
facilities into new wafer lines capable of manufacturing CMOS image
sensors, and (iii) refurbishment and equipment of a part of
production facilities at Nagasaki TEC Building 3 for wafer processing
to differentiate Sony's CMOS image sensors with Sony's independently
developed technologies. Through the investment plan, Sony will
utilize a governmental subsidy (Japanese) to be provided by the
Ministry of Economy, Trade and Industry in Japan.
Sony believes that these investments will strengthen the company's
production capacity for "Exmor" and "Exmor R" CMOS image sensors in
order to meet increased demand from markets such as those for
smartphones and Digital Still Cameras.
In addition to the approximately 40 billion yen investment in Sony
Semiconductor Kyushu Corporation's Kumamoto Technology Center
(announced on September 1, 2010), Sony's total production capacity
for CCD and CMOS image sensors will increase from the current level
of approximately 25,000 wafers per month to approximately 50,000
wafers per month by the end of March 2012.
Toshiba is also planning to outsource output of some system chips to
"rival" Samsung Electronics.
For new orders for the next financial year beginning in April,
Toshiba will design cutting-edge system chips but will outsource
production to Samsung, and maybe other foundries, to avoid costly
capital investment outlays.
The Nikkei business daily said Samsung was chosen as it has advanced
technologies and the ability to churn out large numbers of
high-performance chips at low cost.
Samsung's system chips division has seen strong growth this year,
driven by robust demand for mobile application processors and image