Sony to buy back chip plant from Toshiba to boost ca­pac­ity

The Pak Banker - - Company & Boss News -

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

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