Sony 2001 Annual Report Download - page 84

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Sony Corporation Annual Report 2001
82
In the area of flat-panel display devices, Sony and Toyoda Automatic Loom Works, Ltd. intend to invest in
January 2002 a total of 20.0 billion yen (10.0 billion yen by each company) in ST-LCD, a joint venture company
previously established by the two companies. With demand for low-temperature polycrystalline silicon TFT LCDs
expected to increase, this will fund part of ST-LCD’s capital expenditure of 75.0 billion yen to establish a second
production line in fall 2001, with a target to start operation of such line in June 2002. After the investment from
Sony and Toyoda Automatic Loom Works, Ltd., the total paid-in capital of ST-LCD will be 50.0 billion yen, 25.0
billion yen of which will have been provided by Sony.
In the area of semiconductors, SCE, International Business Machines Corporation (“IBM”), and Toshiba
Corporation (“Toshiba”) reached a definitive agreement in March 2001 to jointly research and develop an ultra-
high speed processor for the broadband network era. The three companies jointly established a research and
development center in the U.S. and intend to invest together more than 400 million U.S. dollars over the next five
years. At the same time, SCE and IBM reached a definitive agreement regarding both the licensing of IBM’s latest
semiconductor fabrication process technology under 0.10 micron meter design rules and technological cooperation,
aiming for the fabrication of an ultra-high speed processor. SCE and Toshiba also entered into a non-binding
Memorandum of Understanding regarding a cooperative relationship for semiconductor embedded DRAM logic
process under 0.13 micron meter design rules, aiming for the further integration of semiconductors for PlayStation
and PlayStation 2. Furthermore, in May 2001, Sony Corporation and Toshiba agreed to jointly develop process
and design technologies for system LSI under 0.10 and 0.07 micron meter design rules. The joint development
started in May 2001 at the research and development center of Toshiba and is scheduled to continue until the end
of the fiscal year ending March 31, 2004. Research and development expenses are expected to be approximately
15.0 billion yen in total, to be equally provided by the two companies.
In establishing business models which combine hardware with networks, SCE is separately cooperating with
NTT DoCoMo, Inc., America Online, Inc. which is a unit of AOL Time Warner, and Vodafone Multimedia Limited
which is a unit of Vodafone UK Limited, to prepare for entertainment services which include online game and
Internet functions through the use of PlayStation 2. In the Music business, “Duet”, which was jointly established
by SMEI and Universal Music Group (“Universal”), a unit of Vivendi Universal of France, agreed with Yahoo! to
cooperate on digital music distribution. The Duet subscription service is scheduled to be launched in the U.S.
later in 2001. In the area of communication service business, during the fiscal year ended March 31, 2001, Sony
acquired 15% of the outstanding shares of Tokyu Cable Television (“Tokyu Cable”). Sony, Tokyu Cable, and Tokyu
Corporation are jointly working to establish a broadband network.
In the financial service business, Sony Bank Inc., which was established as a personal Internet bank,
obtained a formal banking license from the Financial Services Agency in Japan in April 2001, and intends to start
its operation in June 2001. The total paid-in capital of Sony Bank Inc. is 37.5 billion yen, 30.0 billion yen of which
was provided by Sony Corporation. In the field of electronic money service, eleven companies, including Sony
Corporation, NTT DoCoMo, Inc., and Sumitomo Mitsui Banking Corporation, established in January 2001 a joint
venture company named “bitwallet, Inc.” to promote a prepaid electronic money service named “Edy” in Japan
through the use of “FeliCa”, a non-contact IC card technology developed by Sony. The total capitalization of the
company is 5.0 billion yen, 47% of which was provided by the Sony group. The company plans to commence a
full-scale service in Japan in October 2001.