Sony leaves semiconductor alliance

Sunday 08th April 2007, 02:02:00 PM, written by Carl Bender

In a move indicating Sony may be preparing to outsource production of chips beyond the 65nm process, they have opted to leave the research alliance formed with NEC and Toshiba in March of last year. Founded for the purpose of sharing the escalating research costs associated with 45nm fabrication, the initial one year phase of the alliance concluded successfully. Now with one member fewer, remaining members NEC and Toshiba have gone on to sign an agreement for additional joint research into leakage-reduction and other fabrication related technologies.

Although Sony has an additional, separate alliance with IBM and Toshiba linked to Cell development, the NEC/Toshiba alliance nevertheless represented the primary research effort into the bulk CMOS process that comprises the majority of their CE chip production. Recent comments from Sony group CEO Howard Stringer have indicated that there is a strong internal push underway towards raising profits at the chip division, and in that vein, head of Sony semiconductors Yutaka Nakagawa in February informed the press that Sony may seek to outsource leading-edge production at 45nm and beyond to dedicated foundries, rather than invest the billions in capital required to keep pace in terms of advanced in-house process capabilities.

The high cost and capital expenditure requirements of building and maintaining modern fabrication lines have seen all but the largest chip companies form alliances such as the one Sony was recently a part of. However, there is also precedent for shifting towards design entirely and outsourcing fabrication to pure-play foundries such as TSMC. NVidia and the former ATI, both representing chip companies whose sole efforts are in design, have been outsourcing the actual production for years. More recently also, chip giant Texas Instruments shocked the industry by announcing that it would be halting its own research into fabrication technology past 45nm, essentially consigning itself to the developments made by its foundry partners in order to reduce capex.

Though there would be clear short-term benefits to Sony's bottom line by foregoing the build-out of an internal 45nm fab, it would be a move that could forever take them out of the leading-edge process race and set them on the path towards eventually becoming a fabless concern; a precarious position to be in within an industry where foundry capacity might at any time be disrupted or otherwise constrained, and primary CE competitors such as Samsung and Toshiba continue to develop their own internal capacities.

sony ± fabless, 45nm

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