Sony Pushing Forward on Next Generation Broadband Chip

Sony Corp. said it is investing $1.7 billion in its new
“Cell” processor, which is expected to be the engine behind PlayStation 3
and a raft of other future Sony electronic products.

Sony is saying the new chip will be a thousand times more powerful than the
processor that runs Sony’s PlayStation 2 gaming system. The company says the
chip will be built at an upgraded chip fabrication plant in Isahaya City,
near Nagasaki, Japan.

Sony said it will use the 65 nanometer chip production process on 300mm
wafers, rather than the 90 nanometer system widely used today. The thinner
chip manufacturing process enables more transistors to be placed on the
chip.

But as Sony announces a huge investment, it is still not clear when
PlayStation 3 will hit the market, and whether the Cell chip technology will
actually be built into it. Electronic Design Chain is reporting that “the
Cell project was originally envisioned as taking five years, suggesting that
the final product may not be ready until as late as 2007. Although Sony
refuses to talk about its future plans for the chip, it does admit that the
Cell chip will not be the CPU in the Playstation3, reportedly slated for
release in 2005.”

But contrary to the report, Sony is releasing some details about the Cell
chip, including its “multi-core architecture,” which will allow for a stack
of processor cores to be put on a single chip. Also, Sony is beginning to
detail how the Cell chip is tied to its overall future broadband strategy.

“Building on this, Sony’s Broadband Network Company, newly established as of
April this year, will play a key role in developing next generation
electronic devices and linkages to game devices,” said Kunitake Ando,
president and group COO of Sony, in a statement.

Sony is working with Toshiba and IBM on developing the
Cell chip, which could be built into everything from new consumer
electronics devices, television set-top boxes, cable and satellite digital
broadcast decoders, high-definition televisions, Tivo-like hard-drive
recording devices, and mobile phone and computing devices. A portion of
Sony’s major investment in the Cell development project will also be to
upgrade Toshiba’s 300mm wafer plant in southwestern Japan, which currently
produces chips for PlayStation 2.

The architecture of the Cell chip may also be licensed to other computer
manufacturers in the future, including IBM which may use a version of the
Cell chip in its next generation of servers. In earlier reports about the
Cell project, it has been called “supercomputer on a chip.”

Analysts say there are questions whether Sony will recoup its massive
investments in PlayStation 2, and now PlayStation 3. As PlayStation 2
matures as a product, and several video game manufacturers, including
Nintendo and Microsoft innovate and upgrade their
products, Sony will face a variety of product and timing challenges.

Sony has said it expects sales volume of PlayStation 2 to begin declining in
2004, and as a result, it is pushing forward with rapid development of its
next-generation video console platform. There are also reports that Sony
will be coming out with several new electronics products within the next few
months, which will likely marry its consumer electronics and broadband
strategy with its advanced semiconductor manufacturing capabilities.

Recently, Sony has said it will shutdown a wafer fab in San Antonio, Texas,
which will impact aspects of the company?s legacy foundry facilities. The
decision will lead to some 600 jobs within Sony’s San Antonio’s operations.

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