Last month Sony confirmed that it reached a preliminary agreement with Toshiba to sell off its production facilities for advanced chips (including the Cell in PS3). The sale of Sony's semiconductor business to Toshiba is estimated to be worth about 100 billion yen ($861 million).

Now, however, the word from the Nikkei Business Daily in Japan (via Solid State Technology) is not only is Sony selling its Cell production facilities, but the electronics company is also planning to withdraw from its R&D project with IBM and Toshiba, which sought to reduce the Cell chip to 32nm and below. IBM and Toshiba are expected to carry on the project, though.

In addition, Sony intends to cancel all capital investments in production of 45nm and later Cell chips. The current Cell chips being made for PS3 are using a 65nm process, SCE head Kaz Hirai confirmed. Rather than pursue Cell development, Sony is planning to strengthen its work in CCD and CMOS image sensors.

Sony executive deputy president Yutaka Nakagawa explained to the Nikkei that the move is part of Sony's "asset light" strategy to end chip manufacturing investments after 65nm. The focus will switch to design over manufacturing.

"We plan to minimize the investment that is required to make packaged IC chips smaller," said Nakagawa. "Manufacturing cutting-edge packaged IC chips is not considered as important as it once was. The most important thing is what type of chip a company decides to produce, so we will increase the number of designers depending on the chip's purpose. The fact that we will stop operating an advanced chip plant does not mean that we are downgrading the importance of the chip business."

He added, "About 100 employees who worked on designing the Cell and other advanced microprocessors have already been reassigned to divisions where manufacturing technologies for image sensors and analog IC chips are being developed."