TOKYO, JAPAN: Toshiba Corp., together with Sony Corp. and Sony Computer Entertainment Inc. (Sony Group), have signed a non-binding memorandum of understanding (MoU) expressing their intent to establish a joint venture that will produce high-performance semiconductors.

This will include the 'Cell Broadband Engine' (Cell/B.E.) and the 'RSX' graphics engine, and to transfer to Toshiba from Sony Group the 300mm wafer line fabrication facilities installed in Fab 2 of Sony Semiconductor Kyushu Corp's Nagasaki Technology Center (SKC) by the end of March 2008.

Following the transfer, production on the line will be operated by the joint venture. Subject to receipt of any necessary government approval and after further due diligence, Toshiba and Sony Group will aim to finalize the definitive agreements as soon as possible before the end of March 2008.

This collaboration will allow Toshiba to expand and enhance its system LSI business by increasing order volume and securing regular orders of high-performance semiconductors for PlayStation, while Sony Group will aim for the further growth of the PlayStation business by achieving process migration of high-performance semiconductors.

Toshiba and Sony Group have forged a solid partnership in the development and production of high-performance semiconductors for game consoles, including PLAYSTATION3. The new joint venture will further build on this record of achievement by utilizing the 300mm wafer line fabrication facilities that Toshiba will acquire from Sony Group, where most production will focus on 65nm process semiconductors.

Toshiba and Sony Group will together promote further advances in manufacturing technologies and efficiencies by leveraging their knowledge and experience, targeting migration to 45nm process mass production.

Concurrently, Toshiba and Sony Group also signed a non-binding MoU on the transfer to Toshiba of the assets of Sony Group on the March 2008 expiry of Oita TS Semiconductor Corp. (OTSS) joint venture between Toshiba and Sony Group. Located within Toshiba's Oita Operations semiconductor plant, OTSS was established to manufacture semiconductors for PLAYSTATION2 in 1999.

Toshiba and Sony Group are also aiming to finalize the definitive agreements on the transfer to Toshiba of the assets of Sony Group in OTSS as soon as possible before the end of March 2008.

Venture Outline
Company name:  To be determined
Establishment Date:  April 1, 2008 (plan)
Location:  1883-43 Tsukuba-machi, Isahaya-city, Nagasaki, Japan
Capitalization:  Approx. 100 million yen (plan)
Ownership:  60% Toshiba, 20% Sony, 20% SCEI
Representation:  To be determined (Chairman and CEO to be appointed by Toshiba, President and COO to be appointed by Sony)
Business:  Manufacture of high-performance semiconductors, including Cell/B.E. and RSX graphic engine, etc.

Outline of OTSS
Company name:  Oita TS Semiconductor Corp.
Established:  June 1, 1999
Location:  3500 Oaza Matsuoka, Oita, Oita Prefecture (in Oita Operations, Toshiba Corp.)
Ownership:  51% Toshiba, 49% Sony
Business:  Manufacture of semiconductors for PlayStation