Sony to slash semiconductor spending - 45nm Cell in FY08/09


Air Raid

Sony to slash chip spending

TOKYO (Reuters) - Sony Corp. will cut back on future chip spending and
may not produce advanced chips used in its PlayStation 3 (PS3) in-
house, a senior executive said on Tuesday, in a move aimed at driving
the semiconductor unit's nascent earnings recovery.

Improving profitability in its chip division is important for the
Tokyo-based electronics and entertainment conglomerate, which targets
an operating margin of 5 percent in the business year from April, up
from an estimated 0.7 percent a year earlier.

Sony Executive Deputy President Yutaka Nakagawa told reporters that
investment in chips would come down significantly from the 460 billion
yen ($3.8 billion) allocated over the three business years since April

Sony is already producing the cell chips, dubbed "supercomputer on a
chip," using 90- and 65-nanometre circuitry for the PS3, and plans to
move onto the 45-nanometre variety by 2009. A nanometre is one
billionth of a meter.

Narrower circuitry makes the size of a chip smaller and helps
manufacturers cut per-chip production costs.

As the cell, as well as a Blu-ray high-definition optical disc player,
have driven up the PS3 price, lower costs for the high-speed chip are
expected to help the new game machine better compete with Nintendo Co.
Ltd.'s Wii and Microsoft Corp.'s Xbox 360.

But finer circuitry also means heavier initial investments for chip
makers as costs for chip-making equipment balloon.

"We tentatively plan to start commercial production of 45-nanometre
chips in late 2008 or early 2009. We are going to study carefully
whether we should carry out all the capital investment and produce
them in-house," Nakagawa said.


"When we first offered the PS2, there were no semiconductor companies
that were able to make chips for the machine, so we did it ourselves.
But now, there are companies that specialize in chip production,"
Nakagawa said.

Such chip makers include Taiwan Semiconductor Manufacturing Co. Ltd.
(TSMC) and United Microelectronics Corp. (UMC) , the world's largest
and second-largest contract chip makers.

"They are aggressively investing in cutting-edge technology. Our basic
understanding is that we probably won't need to do everything by
ourselves for next-generation chips."

Revenue at Sony's chip operations is expected to grow 57 percent to
770 billion yen this business year to March, accounting for 9.4
percent of its estimated group sales, although part of its chip sales
are made through in-house transactions.

Sales have been driven by brisk demand for microchips used in its game
machines as well as in digital cameras, Nakagawa said.

Sony's PS3 sales have so far paled in comparison with the rival Wii.

The Nintendo machine outsold the PS3 nearly three to one in Japan last
month, according to video game magazine publisher Enterbrain, which
blamed PS3's higher price tag and a shortage of game titles.

Prior to the announcement, shares in Sony closed up 0.2 percent at
6,000 yen, outperforming the Tokyo stock market's electrical machinery
index , which lost 0.34 percent.[/quote]


Sony to cut semiconductor capital spending by 'large amount'

Last Update: 5:06 AM ET Feb 13, 2007

TOKYO (MarketWatch) -- Sony Corp said Tuesday that it would cut
capital expenditures at its semiconductor operations by a "large
amount" compared with the last three years.
The Japanese electronics giant's capital expenditures in its
semiconductor business will be much less than the Y460 billion it
spent over the last three fiscal years, said Executive Deputy
President Yutaka Nakagawa, who heads the company's semiconductor and
component device business.
Nakagawa also said that production of 45nm Cell processors would
probably begin at the end of fiscal year 2008 or the beginning of
fiscal year 2009. The Cell processor is the main chip used in the
company's PlayStation 3 game console.
Nakagawa said Sony had yet to decide whether the 45nm chips will be
manufactured by Sony itself or in cooperation with another company.
The Cell processor is currently made using 90nm technology, and
Nakagawa said the chips will soon be made with 60nm technology.
In the future, the company's semiconductor operations would focus
mainly on imaging devices, which are used in products such as digital
cameras, game components and system LSI, which are used in many
consumer electronic goods, he said.
Nakagawa added that the company's semiconductor operations were
recovering strongly and forecast Y770 billion in revenue this fiscal
year through March, compared with Y490 billion last fiscal year.


I suspect all of this will help Sony with PS4 since they won't be
creating a whole new CPU architecture for it, just increasing &
improving what is already in PS3.




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