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Sony Corp. reportedly plans to sell off its chip manufacturing business to Toshiba Corp. in order to streamline its operations and concentrate on development and manufacturing of consumer electronics. The move follows Sony’s intention to outsource production of state-of-the-art Cell processor that was co-developed with IBM and Toshiba and is now used in PlayStation 3 game console.

Nikkei Japanese news-paper reported on Saturday that Sony planned to sell production facilities for microprocessors and other chips to Toshiba for about ?100 billion ($869.7 million) and an agreement is likely within a few months, according to a news-story by Reuters news-agency. At the same time, Sony and Toshiba will establish a joint venture that will use these lines to manufacture system chips, International Herald Tribune cites the same report by Nikkei.

Currently Sony Kyushu Semiconductor Corp. can produce a variety of chips using 65nm, 90nm, 180nm, 250nm and 350nm process technologies.

Earlier this year Sony withdrew from chip development collaboration with Nec and Toshiba. In fact, it was just a matter of time until Sony fully withdraws from chip making operations, which require high utilization rate to stay profitable. Given that Sony’s high-end PlayStation 3 game console is not the best seller, at least now, and the company’s digital media player business is struggling as well, the firm may not need its own manufacturing capacities for cutting-edge or even mainstream chips.

Toshiba, a leading maker of flash memory chips, will be able to boost its product portfolio with new chip offerings if it acquires Sony’s semiconductor business. Sony, on the other hand, will be able to concentrate on making competitive consumer electronics products that will not need to rely on the company’s in-house developed and produced chips.

Sony and Toshiba officials did not comment on the reports.

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