Sony To Cut Chip Manufacturing Costs

Sony will partner with Qimonda, a subsidiary of semiconductor manufacturer Infineon Technologies, in a new Tokyo-based venture aimed at reducing development and manufacturing costs in its consumer electronics division, hoping to improve profitability of the PS3 and other products. The new venture with Qimonda – a company specializing in memory products – will focus on the design of new DRAM memory chips used in the PlayStation 3. "This allows Sony to cut costs in chip development," says analyst Naoki Fujiwara, according to Bloomberg. "It is also good for Sony to expand [its number of chip suppliers]". The new joint venture will be named Qreatic Design, with operations expected to begin by the end of the year. The DRAM chips will be used not only in the PlayStation 3, but also in Bravia televisions, digital cameras and mobile phones. The PlayStation 3’s DRAM chips are currently provided by Tokyo-based company Elpida Memory, whose shares slipped as a result of the news. "This deal allows us to combine Sony's chip-designing ability with Qimonda's chip-making ability," said Sony president Ryoji Chubachi in an interview at a consumer electronics show in Tokyo. "That way, we can share a roadmap to cut costs." Sony’s semiconductor operations posted a ¥10 billion ($86m) loss in the last fiscal year, and this latest attempt to cut costs is likely to further expectations of an imminent price drop for the PlayStation 3, as recently predicted by analyst Michael Pachter.