Cell chip is key to Toshiba plans, says president

Toshiba's forthcoming Cell processor will lead to a "Cell World" of new products, Masashi Muromachi, president and chief executive officer of Toshiba's semiconductor company, said on Thursday. The Cell chip will power Sony Computer Entertainment's PlayStation 3 game console, among other products.

Toshiba will boost its capital spending so it can produce the most advanced chips to help make superior networked digital consumer products through the end of the decade, Muromachi said in speech at Ceatec Japan 2004.

In slide after slide, the Cell processor appeared at the top right of Toshiba's roadmaps for next-generation chips, showing how much faster or more capable it will be than anything the company can currently offer.

While the slides lacked hard data -- the megabits per second, gigahertz, voltages and other measurements that indicate chips' horsepower -- they showed just how important the processor is becoming to Toshiba.

"We must develop the world's number-one products," Muromachi said.

"Super-high performance processors are being developed by Toshiba. I would like to talk more about Cell right now, but I will refrain from doing so," he said.

Toshiba is working on developing a Cell World of products and is pouring cash into development programs towards this end, Muromachi said. The chip is expected to provide high-speed graphics processing for Sony Computer Entertainment's PlayStation 3. The slides from Toshiba also showed next-generation TVs, DVD players and portable electronics products using the processor.

Cell is to be produced on 65 nanometer technology, which is one generation ahead of the most advanced chips made today by Toshiba, Intel and others. The figure is a measure of the size of the smallest element on a chip: the smaller the circuits and transistors become, the greater the computing power that can be built on the chip.

In 2003, Toshiba nearly tripled its capital expenditure to YEN 168 billion (US$1.5 billion) from the previous year to build advanced production lines for chips and, for example, to make NAND-type flash memory, the type used in memory cards.

During 2001 and 2002, when people bought fewer electronics products, the chip industry, and Toshiba's capital expenditure, crashed. In 2001, Toshiba spent YEN 50 billion, Muromachi said.

But the gloom is gone, and Toshiba will continue to plow money into the future, he said.

Echoing recent comments made by Sony president Kunitake Ando, and a speech yesterday by Rick Tsai, president and CEO of Taiwan Semiconductor Manufacturing Company, the world's largest supplier of made-to-order chips, Muromachi said the semiconductor and electronics industries are going to do well for at least the next three to four years.

Toshiba is considering a significant increase in its investment above the YEN 154 billion it has already said it will spend this year to make sure it has the facilities to make the new products. "We believe we can make an announcement about that soon," he said.

The additional money is to invest enough to make sure the company can make more NAND flash memory chips, and, in the longer term, processor chips on 45 nanometer technology after 2006, and 32 nanometer technology a few years after that, he said.

Beyond 2005, Toshiba will keep its capital expenditure at about YEN 140 billion to ÂYEN 150 billion each year for the next 5 years, he said.

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