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Technology Stocks : Sony Corp - Sony

SONY 27.89

+0.5%

Oct 31 9:30 AM EST

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To: Bruce Byall who wrote (450)	2/2/2004 12:21:45 PM
From: P2V	of 497

SNE chips to be built by IBM. Associated Press Sony to invest $325 million in IBM chip plant Monday February 2, 11:36 am ET By Michael Gormley, Associated Press Writer ALBANY, New York (AP) -- Sony Corp. will invest $325 million in IBM Corp.'s upstate New York semiconductor plant and work with Big Blue to produce tiny new chips for next-generation computer systems and consumer electronics. IBM plans to begin pilot production of the "cell" microprocessors and other chips for Sony at the plant in East Fishkill, 100 kilometers (60 miles) north of New York City, in the first half of 2005. IBM's chip-making division has struggled with weak demand, leading to a $252 million loss in the company's technology group in 2003. However, the Sony deal follows a November announcement by Microsoft Corp. that IBM will make chips for the next version of the Xbox video game consoles. The chips produced at the Fishkill plant are to be the first IBM chips to be made on 300 millimeter wafers of silicon, instead of the current 200 millimeter wafers. More chips can be made from each of the larger wafers, improving productivity and cost-effectiveness. Separately in Tokyo, Sony and Toshiba said they intend to invest about 42 billion yen ($398 million) each to launch a plant that will produce chips with a 65-nanometer line width. The investment is separate from Sony's $325 million outlay to IBM. Sony's investment is part of the 200 billion yen (US$1.89 billion) the consumer electronics giant said in April it would spend to produce 65-nanometer chips. Sony said Cell semiconductors can process nearly 10 times as much information compared with microprocessors currently used for game consoles and other high-tech gadgets.

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