Toshiba helps Sony cut PS3 production costs

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Only a day after Toshiba pulled HD DVD from the high-definition DVD business, conceding defeat in a long-running format war with Sony’s Blu-ray, the company has officially finalized a previously announced $835M joint venture with its rival that will help lower PS3 production costs.

The joint venture, to be named at a later date, will manufacture Cell chips and RSX graphic chips, both used in the PS3, as well as other microchips that go into Toshiba products. With this, Sony is trying to streamline its operations by getting rid of assets which it simply does not need or are not part of its core business. Toshiba, in turn, will benefit from the deal as they now plan to ramp up its chip operations rapidly after a partnership was revealed with SanDisk.

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