Toshiba, Sony, and SCEI Sign a Memorandum of Understanding Establishing a Joint Venture to Strengthen Manufacturing Capabilities for High-Performance Semiconductors

Toshiba Corporation, together with Sony Corporation and Sony
Computer Entertainment Inc. (Sony Group) today announced that they
have signed a non-binding memorandum of understanding expressing their
intent to establish a joint venture that will produce high-performance
semiconductors, including the 'Cell Broadband Engine(TM)' (Cell/B.E.)
and the 'RSX' graphics engine, and to transfer to Toshiba from Sony
Group the 300mm wafer line fabrication facilities installed in Fab 2
of Sony Semiconductor Kyushu Corporation's Nagasaki Technology Center
(SKC) by the end of March 2008. Following the transfer, production on
the line will be operated by the joint venture. Subject to receipt of
any necessary government approval and after further due diligence,
Toshiba and Sony Group will aim to finalize the definitive agreements
as soon as possible before the end of March 2008.

This collaboration will allow Toshiba to expand and enhance its
system LSI business by increasing order volume and securing regular
orders of high-performance semiconductors for PlayStation, while Sony
Group will aim for the further growth of the PlayStation business by
achieving process migration of high-performance semiconductors.

Toshiba and Sony Group have forged a solid partnership in the
development and production of high-performance semiconductors for game
consoles, including PLAYSTATION(R)3. The new joint venture will
further build on this record of achievement by utilizing the 300mm
wafer line fabrication facilities that Toshiba will acquire from Sony
Group, where most production will focus on 65nm process
semiconductors. Toshiba and Sony Group will together promote further
advances in manufacturing technologies and efficiencies by leveraging
their knowledge and experience, targeting migration to 45nm process
mass production.

Concurrently, Toshiba and Sony Group also signed a non-binding
memorandum of understanding on the transfer to Toshiba of the assets
of Sony Group on the March 2008 expiry of Oita TS Semiconductor
Corporation (OTSS) joint venture between Toshiba and Sony Group.
Located within Toshiba's Oita Operations semiconductor plant, OTSS was
established to manufacture semiconductors for PLAYSTATION(R)2 in 1999.
Toshiba and Sony Group are also aiming to finalize the definitive
agreements on the transfer to Toshiba of the assets of Sony Group in
OTSS as soon as possible before the end of March 2008.

Joint Venture Outline

Company name: To be determined

Establishment Date: April 1, 2008 (plan)

Location: 1883-43 Tsukuba-machi, Isahaya-city, Nagasaki, Japan

Capitalization: Approx. 100 million yen (plan)

Ownership: 60% Toshiba, 20% Sony, 20% SCEI

Representation: To be determined (Chairman and CEO to be appointed
by Toshiba, President and COO to be appointed by Sony)

Business: Manufacture of high-performance semiconductors,
including 'Cell/B.E.' and 'RSX' graphic engine, etc.

Employees: To be determined

Outline of OTSS

Company name: Oita TS Semiconductor Corporation

Established: June 1, 1999

Location: 3500 Oaza Matsuoka, Oita, Oita Prefecture (in Oita
Operations, Toshiba Corporation)

Ownership: 51% Toshiba, 49% Sony

Business: Manufacture of semiconductors for PlayStation