Sony announced today, it will spend $1.67 billion in the next three years on a chip plant as it gears up for a new generation of game machines and home electronics. The plant is part of an important move Sony will take for pushing its "Cell" chip architecture that they hope will be adopted for all kind of networked gadgets.

The plant is set to begin production as early as 2005 and aims to cut costs by using large, 300mm wafers and industry-leading circuitry widths of 65 nanometers.

Sony, both the world's largest consumer electronics maker and the largest chip user, is keen to make more of its chips by itself and use them to keep its products a step ahead of rivals.