Sony Corp. and Sony Computer Entertainment Inc. (SCEI) announced on Thursday intentions to reform chip development and manufacturing businesses of Sony. Under one of the agreements, Sony will work with IBM to lower manufacturing costs of the Cell processor, whereas under another agreement Sony will form chip manufacturing joint venture with Toshiba.

IBM and Sony have signed an agreement to extend their existing manufacturing relationship to 45nm silicon-on-insulator (SOI) for high volume production of the Cell Broadband Engine (Cell/B.E.) processor used on SCEI’s PlayStation 3 game console. Both companies will collaborate to optimize the 45nm manufacturing capability to produce a lower power and lower cost processor for the PS3. IBM will lead the evolution of the Cell component by transitioning production from the existing 65nm process technology to 45nm in IBM’s manufacturing facility in East Fishkill, New York.

“The transition to 45nm SOI technology for the Cell Broadband Engine is a critical step to advancing the world class processor cost and power characteristics while maintaining supercomputer on chip performance capability. The IBM team is excited to lead the production of the 45nm Cell processor in its East Fishkill 300mm facility and to help drive a broader use of this capability as both power and size scale down significantly,” said Adalio Sanchez, general manager for IBM global engineering solutions.

Separately, Sony Group will extend its alliance with Toshiba to manufacture high-performance highly-integrate chips by using 45nm bulk process technology. By forming a joint venture company that leverages the knowledge and experience of both companies, Sony Group and Toshiba intend to improve power consumption and cost competitiveness for game and digital media applications by advancing to the 45nm generation from the existing 65nm generation process.

Earlier this year Sony withdrew from chip development collaboration with NEC and Toshiba and today’s agreements mean that the company also does not intend to keep chip manufacturing and redesigning in-house. The move was previously expected by various observers and analysts.