The sale, which would include production lines for the "Cell" microchips, dubbed "supercomputer on a chip," is part of Sony's strategy to shed costly semiconductor assets and focus on the production of strategic products such as image sensor chips used in digital cameras and camcorders, they said.

The business daily Nikkei said on Saturday Sony planned to sell production facilities for cutting-edge microprocessors and graphic chips to Toshiba for about 100 billion yen ($869.7 million) and an agreement is likely within a few months.

Both Sony and Toshiba declined to comment on the report.

To secure a stable supply of chips for its game machines after the possible sale, Sony is considering to set up a joint venture with Toshiba to take over actual production activities at the manufacturing facilities, the sources said.

Sony, which is in the final year of its three-year turnaround plan under Chief Executive Howard Stringer, said in February it will cut back on future chip spending and may not produce next-generation microchips using 45-nanometre circuitry in-house.

A nanometer is one billionth of a meter.

http://tech.yahoo.com/news/nm/sony_toshiba_microchip_dc