Sony is selling its Japanese microchip division facilities to Toshiba for $835m (£429m) as part of a strategy to focus on its core activity.
The deal follows the two firms' partnership to produce high-performance Cell Broadband chips and RSX graphic systems.
The equipment produced at the semiconductor division will be used in Sony entertainment products such as game console PlayStation 3, as well as Toshiba digital consumer goods.
Manufacturing will start with 65nm process, and the joint venture will promote migration to 45nm process mass production.
The joint venture will start operations from April.
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