Sony to buy back chip plant from Toshiba to boost capacity
OSAKA: Sony Corp., Japan's largest electronics exporter, will buy back a semiconductor plant from Toshiba Corp. for about 50 billion yen ($598 million) to double production capacity of image sensors, the Nikkei newspaper said. Sony, which sold the plant in Nagasaki prefecture to Toshiba in 2008, will buy the facility and double its monthly production capacity of the sensors, used in digital cameras and smartphones, to about 40,000 units from about 20,000 units, Nikkei reported, without saying where it obtained the information.
Sony, in a statement to the Tokyo Stock Exchange today, said it hadn't made any announcement regarding the purchase.
Toshiba, Japan's largest chipmaker, had previously paid 90 billion yen to Sony to buy the production facilities for making video-game chips.
In a separate news item, Micron Technology Inc., the largest U.S. maker of computer-memory chips, reported its fifth-straight quarterly profit as buoyant demand for products used in smartphones helped it withstand a slump in computer memory.
Net income in the period that ended Dec. 2 fell to $155 million, or 15 cents a share, from $204 million, or 23 cents, a year earlier. Fiscal first-quarter sales rose to $2.25 billion, Boise, Idaho-based Micron said today in a statement. Analysts, on average, had predicted revenue of $2.37 billion.
Micron is entering a second year of profit after a threeyear glut of memory chips, which are used in personal computers, resulted in industrywide losses. Chief Executive Officer Steve Appleton said the company benefited from demand for electronics such as Apple Inc.'s iPhone even as sales of computer memory dropped 19 percent from the preceding quarter. "They are still firmly in the black," said Kevin Vassily, an analyst at Pacific Crest Securities in Portland, Oregon. He has an "outperform" rating on the stock and he doesn't own it. "In their prior incarnations, when there was a collapse of DRAM prices they would lose money pretty quickly."
Micron makes dynamic random access memory, or DRAM, chips that provide the main memory in PCs. The average selling price of those chips fell 23 percent in the first quarter from the prior period.
The company also makes Nand flash memory chips, used in digital cameras and portable devices such as the iPhone and iPad. Shipments of those products rose 20 percent, while prices fell 15 percent, Micron said.
Micron fell 2.4 percent to $8.08 in extended trading after rising 14 cents to $8.28 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have fallen 22 percent this year.
Micron had reported an annual profit in only four of the past 10 years. The memory industry suffers from unpredictable swings in demand, making it hard to adjust production levels quickly enough. The company goes head-tohead with South Korea's Samsung Electronics Co., the world's second-largest chipmaker behind Intel Corp.
Moreover, Rovi Corp., a provider of parental controls and interactive video systems, plans to acquire Sonic Solutions Inc. to expand in digital entertainment services.
Sonic investors may opt to sell their shares to Rovi at $14 apiece, or receive 0.2489 Rovi shares for each Sonic share they hold, according to a statement posted on Rovi's web site dated yesterday. Sonic directors and senior management owning about 11.2 percent of the company's equity have accepted Rovi's offer.
The offer of $14 a share is 25 percent more than Sonic's closing price in Nasdaq Stock Market trading yesterday. The combined company will seek to target higher-value subscribers of digital entertainment content, Rovi said.
Rovi plans to use technologies available to its TotalGuide customers to power Sonic's RoxioNow services, a move that will "result in accelerated uptake of premium content," according to the statement. -Bloomberg