Sony is in talks with Toshiba to sell its production facility in western Japan's Oita prefecture that makes graphic chips used in the PlayStation 3 game console, sources close to the matter said.
That would be Sony's latest step to shed costly semiconductor assets and focus on strategic products such as image sensor chips used in digital cameras and camcorders.
Sources said in September Sony was in negotiations with Toshiba to sell its manufacturing facilities in Nagasaki, also in western Japan, for advanced microchips including the Cell microprocessor, dubbed "supercomputer on a chip".
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 nanometre is one billionth of a metre.
A sale price for Sony's graphic chip production facility, located within Toshiba's semiconductor plant in Oita, was unavailable.
Business daily Nikkei has said Sony planned to sell the production facilities in Nagasaki for about 100 billion yen (US$856 million).
Spokesmen at Sony and Toshiba declined to comment.