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A chip combining the EE and GS
“Sony’s goal is to be a manufacturer of the world’s preeminentsemiconductors”Interview with Ken Kutaragi, Executive Deputy President, Corporate Executive Officer
Why are these components so important
to Sony?
Many people believe that digital consumer
electronics goods will become
“commodified,” that is, inexpensive enough
for anybody to buy, thereby preventing
manufacturers from making a profit. In fact,
nothing could be further from the truth. Of
course, it is true that, manufacturers cannot
create any added value by simply procuring
components and using them to assemble
their finished products. However, the story is
different for companies that in addition to
being able to manufacture key components
themselves utilizing their own distinctive
technologies, and being able to take advan-
tage of mass production technology, can also
capture the imagination of consumers. An
enormous amount of value can be added in
this manner. For example, Sony’s Handycam
video camera and Cybershot digital still
camera are making large contributions to our
earnings. That is because we produce CCDs,
the camera’s “electronic eye,” LCD panels,
batteries and other advanced components
ourselves. This allows us to create more com-
petitive, value-added products. The shift of
management resources in order to concen-
trate on key components is essential to our
pursuit of implementing a vertically inte-
grated business model that will enable us to
create distinctive new products.
Exactly what kind of components are there?
In order to differentiate our products, we
must develop components for display, imag-
ing, storage, semiconductor and many other
types of devices. Among these components,
semiconductors are considered to be the
most important key component, based on
the plans for our future product lineup. In
the near future, semiconductors will become
ever more miniaturized, enabling a vast
number of transistors to be incorporated
onto one chip. The development of this
semiconductor technology will enable the
realization of a diverse range of ideas and
architecture, meaning continued conver-
gence of added-value on the semiconductor.
In addition, as the resolution of displays
improves, there will be more demand for
even better picture quality, whether for
video or still photos. This trend points to an
even more important role for CCDs and
other imaging components used in video
cameras and digital still cameras.
What kind of measures is Sony taking to
secure a stable supply of key components?
To meet the explosive growth in demand
that is foreseen for digital consumer elec-
tronics, we are currently making substantial
investments in the construction of manu-
facturing facilities for key components.
For example, to manufacture Cell we
must introduce state-of-the-art semiconduc-
tor production technologies and facilities.
We are working with IBM and Toshiba to
put in place a highly sophisticated mass-
production infrastructure.
As for display components, we are striving
to enhance our manufacturing capability of
amorphous silicon TFT LCD panels, enabling
us to keep up with the expected growth in
demand for LCD televisions.
Taking the initiative to lead the broadband
network era
Digital consumer electronics and network-
enabled devices, which support games, music,
pictures, digital broadcasts and many other
broadband applications, will be the leaders of
the broadband network era. Accordingly,
semiconductors, the key strategic components
in these products, will be one of the key
sources of Sony’s competitiveness.