Sony Invests in IBM Chip Foundry

By Sean Michael Kerner

Sony will pump $325 million in IBM’s Fishkill, N.Y., chip foundry. The investment is part of Sony’s continuing partnership with IBM to develop next-generation 65-nanometer chips for its consumer electronic devices.

“The deal is consistent with both firms’ strategies to partner to bring these advanced products to market,” Sumit Sadana, director of strategy and technology for IBM’s Systems and Technology Group told

The first chip produced by IBM’s 300mm semiconductor manufacturing facility for Sony will be codenamed the “Cell” microprocessor. Pilot production is expected to begin during the first half of 2005.

“The way Sony is positioning this is really as a key building block for all kinds of consumer devices,” Sadana said, explaining the origin of the codename.

Sadana characterized Sony’s investment as ‘non-trivial,’ noting that any 300mm facility of even minimal scale costs between $2 billion to $3 billion dollars to build.

This announcement is not the first from the Sony-IBM partnership. The two firms, together with Toshiba, have been involved in the design of the “Cell” microprocessor since at least April. A that time, it was reported that the chip would become the engine behind the greatly anticipated Playstation 3.

IBM has now won the “triple crown” of the video game market, according to Sadana. Big Blue currently has relationships with Sony, Nintendo and Microsoft.

“Clearly we don’t have an exclusive relationship with any one company, but we certainly have a very good relationship with each of these companies,” he said.

“It’s not that we’re offering all of these companies off-the-shelf products, which prevents any differentiation,” Sadana said.

“We’re customizing each and every product to the needs of our customers and that is the reason it is not inconsistent to have a relationship with all three of these companies,” he said.

“The Sony/IBM partnership is much like some of the other partnerships we are driving with some of our other key customers,” Sadana said. “We look to continue to deepen the relationship further and we view this as another excellent building block of that partnership.”

IBM’s Fishkill, N.Y., plant located not far from Big Blue’s Armonk, N.Y., headquarters, which was opened to much fanfare in July 2002. It recently won a new semiconductor order from Taiwan’s VIA Technologies.

Sony’s investment in the Fishkill facility is part of a $1.14 billion initiative announced today in semiconductor fabrication. In addition to the IBM investment, Sony will invest in its own SCEI’s Fab2 semiconductor fabrication facility and a newly built Toshiba plant.

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