Report: Sony to sell Cell factory

Toshiba and Sony back rival formats in the increasingly bitter next-generation video format battle between HD DVD and Blu-ray Disc. However, the two companies closely collaborated with IBM to develop the Cell processor, the brawny CPU at the heart of the PlayStation 3. All three companies had announced nongaming uses for the Cell, with IBM already producing the chip at its New Jersey facility using a 65-nanometer process.

Now, though, it appears that Sony might be getting out of the Cell production business. The Nikkei news service--by way of Reuters--is reporting that Sony is in talks to sell its Cell semiconductor manufacturing plants to Toshiba for 100 billion yen ($869.7 million), and that "an agreement is likely within a few months." Sony has been publicly pondering such a move since March, when a senior executive said the company was weighing ways to cut the massive cost of making the chips.

What would a sale mean for production of the PS3? In a word, nothing. According to Nikkei, part of the agreement will have Sony oversee the Cell production lines inside the factory, which Toshiba would own. However, the sale of the factories would both offset the losses being suffered by Sony's gaming division, and allow it to save on the cost of operating the plants.