Toshiba announced today that it was joining forces with Sony and has agreed to pay $835 million for Sony's semiconductor operations. Toshiba will now own operations in the western Nagasaki prefecture that makes advanced semiconductors such as the Cell processor for the PS3. Toshiba will apparently loan out chip lines to Sony in the joint venture. The sale of the chip lines should help reduce production costs for the PS3.

Sony first announced in October a basic agreement to sell the chip facilities to Toshiba as part of efforts to streamline its operations.

Under its first foreign boss Howard Stringer, Sony is seeking to shed non-core assets and revive its mainstay electronics business amid brisk sales of flat-panel televisions and digital cameras.

The sale of the chip lines also aims to reduce the cost of producing the PS3 as Sony struggles to recoup its huge investment in the console, which is facing fierce competition from Nintendo's Wii.

Toshiba meanwhile is looking to increase its focus on other growth areas such as production of semiconductors, including memory chips used in portable music players.