Sony Forks Over Chip Production To Toshiba :can do a better job of supplying the brains for the PlayStation 3.

Sony and Toshiba are collabrating for chip development :

Sony announced on Thursday a plan to sell its loss-making multimedia microprocessor operations to Toshiba for an undisclosed amount, hoping that its trusted joint venture partner can do a better job of supplying the brains for the PlayStation 3.

Following a month of leaks to various media outlets by unnamed sources, the world's second-largest consumer electronics company made an announcement late on Thursday that it will unload production lines for its Cell processor in a joint venture arrangement for a reported amount of about 100 billion yen ($856.38 million) to Toshiba.

The sale, drawn up in preliminary form as a nonbinding memorandum of understanding, is the latest swing of the ax by Sony Chief Executive Howard Stringer, who has cut the workforce and closed factories to boost profitability. In February he promised to cut back on development costs for the expensive, loss-making chips and to consider outsourcing production to outside partners.

Toshiba appears to be the best available buyer: Along with IBM (nyse: IBM - news - people ), Toshiba helped Sony develop the Cell, which bundles multimedia game features onto a single chip using 65-nanometer technology. Cell is produced in a plant in Nagasaki, in southwestern Japan; costly investment would be needed to prepare it to produce chips using next-generation 45-nanometer technology.

In addition to the sale of the Cell line, Toshiba is also taking over the manufacturing equipment for a line of image-processing chips also used in the PlayStation 3. Both sides were mum on how much the sale was worth but Nikkei Business Daily reported before the announcement that the sale price was about 30 billion yen ($256.92 million).

In a joint announcement, the two companies said Sony would transfer to Toshiba its advanced 300-millimeter wafer line fabrication facilities installed in a plant operated by its subsidiary, Sony Semiconductor Kyushu Corp., by the end of March 2008. The facilities house the Nagasaki Technology Center, responsible for developing the Cell line.

While the ownership of the asset would go to Toshiba, Sony and its gaming unit, Sony Computer Entertainment, would jointly participate in the production process as a minority shareholder of 40% in a new joint venture to be set up in April with Toshiba, which would take the remaining 60%.

Sony (nyse: SNE - news - people ) shares swooned after initial press rumors of the sale a month ago, but on Thursday afternoon, they were up 30 yen, or 0.55%, at 5,430 yen ($46.57).

The sale allows Sony to pass on the heavy cost of microprocessor development to Toshiba, Japan's largest microchip maker. It could possibly lower Sony's procurement costs for Cell chips if Toshiba can reap production efficiencies from commercializing the chips in a broader range of applications. Sony will also be able to invest the proceeds of the sale to bolster its world-leading position in image-processing chips for its digital cameras and cell phones.

For Toshiba (other-otc: TOSBF - news - people ), buying the Cell line would give it a huge upgrade in the system chip business, where it is lagging far behind Intel (nasdaq: INTC - news - people ) and Samsung (other-otc: SSNLF - news - people ), with the anchor of having Sony as a reliable buyer.

Both companies said they would jointly advance the Cell chips to the next stage of technology: Toshiba was reported by Nikkei Business Daily as intending to roll out a 45-nanometer version of the Cell in two years and employinh the cutting-edge chips in personal computers and flat-panel televisions.

The market has been concerned about Sony's growth prospects over the longer term beyond its recent obsession with asset sales and cost cutting. The sale of Cell follows after it sold part of Sony Financial last week, bringing the unit public in a 320 billion yen ($2.74 billion) share sale. (See: " Sony Cashes In On Financial Unit")

While it is planning to sink more money into research and development to reclaim technical leadership, exciting new growth areas seem far off, and it will now have to rely on Toshiba, a competitor on the consumer electronics front, for future generations of microprocessors for its games consoles.

Technorati : chip ps3 +

DNA pioneer James Watson says he is 'mortified' by race comments : black people are less intelligent than whites.

24HOURS LONDON: The DNA pioneer James Watson today apologised "unreservedly" for his apparent claim that black people are less intelligent than whites.

"I am mortified about what has happened," he told a group of scientists and journalists at the launch of his new book, Avoid Boring People, at the Royal Society in London.

The American scientist at the center of a media storm over comments suggesting that black people were not as intelligent as whites said Thursday he never meant to imply that the African continent was genetically inferior, adding that he was mortified over the attention his words had drawn.

James Watson, who won the Nobel Prize for co-discovering the molecular structure of DNA, has been sharply criticized in Britain for reportedly saying tests showed Africans did not have the same level of intelligence as whites.

In its profile of Watson, The Sunday Times Magazine quoted him as saying he was "inherently gloomy about the prospect of Africa" because "all our social policies are based on the fact that their intelligence is the same as ours - whereas all the testing says not really."

Watson's interview in the magazine received wide play, touching off a furious reaction in Britain. The Independent newspaper put Watson on its front page Wednesday, and on Thursday the Daily Mail devoted a column to criticism of his "incendiary claim."

Watson, who arrived in Britain on Thursday to promote his new book, "Avoid Boring People: Lessons From a Life in Science," appeared at a reception Thursday night at the Royal Society, Britain's leading scientific academy.The Associated Press was refused entry to the event, described by his publicist as a private gathering with friends. But in a written statement given to the AP, Watson said he was "mortified by what had happened."

"I cannot understand how I could have said what I am quoted as having said," he said. "To all those who have drawn the inference from my words that Africa, as a continent, is somehow genetically inferior, I can only apologize unreservedly. That is not what I meant. More importantly from my point of view, there is no scientific basis for such a belief."

Kate Farquhar-Thomson, his publicist, refused to say whether Watson believed The Sunday Times had quoted him accurately. "You have the statement. That's it, I'm afraid," she said.

Watson, 79, is a molecular biologist who serves as chancellor of the Cold Spring Harbor Laboratory in New York, a world leader in research into cancer and neurological diseases. The laboratory issued a statement saying its board of trustees vehemently disagreed with his remarks and that they were "bewildered and saddened if he indeed made such comments."

The author of several books, Watson has been well-known in Britain since his days at Cambridge University in the 1950s and 1960s on the trail of DNA's molecular structure. Watson, Francis Crick and Maurice Wilkins won the 1962 Nobel Prize for their work on the subject.

In the magazine interview, Watson was quoted as saying he opposes discrimination and believes that "there are many people of color who are very talented." But he also was quoted as saying that while he hopes that everyone is equal, "people who have to deal with black employees find this not true." Watson's statement did not directly address those remarks.

The interview caused outrage in Britain.

David Lammy, the government's skills minister, said Thursday that Watson's remarks were "deeply offensive" and would "succeed only in providing oxygen" for the British National Party, a small, far-right political party that has been accused of being racist.

"It is a shame that a man with a record of scientific distinction should see his work overshadowed by his own irrational prejudices," Lammy said. "It is no surprise to me that the scientific community has condemned this outburst, and I think people will recognize these comments for what they are."

Watson has caused controversy in the past, reportedly saying that a woman should have the right to abort her unborn child if tests could determine it would be homosexual.

He also suggested a link between skin color and sex drive, proposing a theory that black people have higher libidos.

Jan Schnupp, a lecturer in neurophysiology at Oxford University, said Watson's remarks "make it very clear that he is an expert on genetics, not on intelligence."

Schnupp said undernourished and undereducated people often perform worse on intelligence tests than the well off.

"Race has nothing to do with it, and there is no fundamental obstacle to black people becoming exceptionally bright," Schnupp said.

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