IBM signs development pact with Sony, Toshiba

Caroline Humer

NEW YORK: International Business Machines Corp., Toshiba Corp. and Sony Corp.
on Tuesday said they signed an agreement that will increase Sony's role in
developing the microchip technology used in its vast array of consumer
electronics products.

The agreement, in which Sony and Toshiba will pay IBM several hundred million
dollars, extends last year's three-way pact in which IBM agreed to develop a new
chip, code-named "Cell," for Sony and Toshiba, Sony's manufacturing
partner.

The "Cell" chip is expected for Sony's Playstation 3 video game,
which will compete with Microsoft Corp.'s and Nintendo's next generation of
video games. Some version of the chip, or the technology behind it, could be
used in computers, like IBM's large computers for businesses.

As part of the agreement, about 50 to 100 Sony and Toshiba employees will be
located in IBM's East Fishkill, New York labs, where they will work closely to
develop advanced semiconductor technologies using next-generation materials, IBM
said.

In particular, the companies will develop technologies that enable them to
build a high-performance chip that produces less heat and requires less power to
run, said Bijan Davari, IBM fellow and vice president of technology and emerging
products.

That's important for use in small consumer products, like handheld computers,
he said. "Both Sony and Toshiba have very extensive application and
requirement sets. They really know what you need to put into the chip,"
Divari said.

IBM will transfer to Sony and Toshiba the details of silicon- on-insulator
technology, which the companies can use to build chips in their own plants for
themselves or their customers. Silicon-on-insulator employs a thin layer of
silicon that is separated from the chip's base layer of silicon by a layer of
glass.

The companies will have more access to IBM's technology than any previous
customer, one analyst said. "This agreement is the first one that allows
the architects into the kitchen to make a special formula -- to make a special
dough. That's never ever happened before. Sony is the only customer big enough
to make IBM change its ways," said Richard Doherty, director of research in
Seaford, NY.