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Sony in Talks to Purchase Factory That Manufactures the Embedded DRAM “Heart” of the Wii U

by on December 4, 2013 12:22 PM 18

One of the most important components of Nintendo’s Wii U is its embedded DRAM chip, that is considered the “heart” or the “life stone” of the console. That chip is manufactured at the state-of-the-art Renesas Electronics plant of Tsuruoka, in the Yamagata Prefecture, Japan.

Back in August we reported Renesas’ plans to close the factory due to the sluggish sales of the console, that caused a decline in production of the chip, that was responsible for more than half of the manufacturing load of the plant, but things may yet go differently.

Today several Japanese sources, starting with the morning edition of the Nihon Keizai Shimbun newspaper and followed by several reputable business sources like Toyo Keizai, Nikkei, Reuters, Sankei Digital, Mainichi and Asahi Digital, reported that Sony is currently in talks with Renesas for the acquisition of the Tsuruoka plant.

The process for the acquisition may start as early as next week, as Sony is said to plan using the well known expertise of the staff at the plant at Tsuruoka to bolster its production of CMOS sensors for smartphones, for which the company is already market leader worldwide.

A successful acquisition would bring hope for the 900 workers at the factory, that until today thought they were destined to lose their jobs in 2-3 years.

On the other hand, the effect of such an operation on the production of the embedded DRAM for the Wii U is unknown, even if Nintendo is said to have considerable stocks of the component, so the console shouldn’t suffer in the short term even if production of the chip at Tsuruoka were to be completely halted.

Join the Discussion

  • islan

    So … if manufacturing of the chip ceases … what happens to the Wii U?

    EDIT

    Oh, got to the last paragraph. Still makes me wonder just how much a stock they might have.

    • KuchikiSentou

      It can’t stall because they have a contract with Nintendo. It will only stop if Sony buys out the contract.

      • islan

        If the place goes out of business, then how the heck can they hold their end of the contract? If anything, Sony (or anyone else) buying it could include a renewal of that contract. It’s not like money hasn’t transferred between competitor’s hands, either; Microsoft has to pay the group that owns Blu Ray for using it on the Xbox One, a group which includes Sony.

        • shogunknight

          Nintendo must already have more than enough units of the component for themselves. Should Sony acquire the company and nintendo needs an extra supply, they will have to request for more units or seek another company. It depends on the condition of the contract, but its very likely nintendo already has the units for themselves

          • islan

            The definition of “more than enough” probably depends on if the sales of the Wii U continue as they have been, but what if there’s a sudden boom in sales? It sounds like Renesas was relying on more orders to come through from Nintendo that never happened.

            I’m just pondering.

          • shogunknight

            Based on their situation, they probably must have been making more units and not breaking even due to the low console sales. If there is a sudden sales boom, both Ninntendo R & D and Renesas would have to make more units. If by then they are acquired by Sony, nintendo would just have to seek more supply from them.

        • KuchikiSentou

          I’m talking about Sony acquiring the company, not them going out of business.

          • islan

            Oh, I see, you said “if Sony buys out the contract” and I read it as “if Sony buys out the company“. My bad.

            But my OP was more about the hypothetical “chip manufacturing ceases at that company, regardless of reasons”.

        • Guy Brohski

          The video Codec used in Blu-ray is licensed by MS, so in a funny way both companies need each other.

  • Stranger On The Road

    I don’t see this effecting Nintendo in a negative way, if anything this could mean that the factory will continue to run and that Nintendo can stop looking for another supplier.

    It is not that strange for an OEM to buy their parts from a factory that is owned by their competitor. Like how Apple is buying parts from Samsung. Look at it this way, Toshiba and Sony worked together on the Cell processor, which was installed in a console that pushed the BD that was in direct competition with HD-DVD.

    Unless Sony is going to change the production line of the factory, I can only see Nintendo as sighing a sigh of relief.

    Edit: In case anyone has forgotten, Sony still buys software -for its own usage and to be bundled with their notebooks- from Microsoft.

    • Rinslowe

      My thoughts exactly. In fact cross supply channels between large/ medium and small corporations, especially high technology products for hardware, software and patented components is a common occurrence today… I think Nintendo will be fine either way. Would be interesting to know the monthly/ yearly manufacturing capacity for Wii U’s eDRAM chip. That would give a better perspective on the subject.

  • Daldrakar

    Must remember they can always move the manufacture of a component elsewhere. I would not see this as a problem. Contract manufacturing, they can always get it made elsewhere.

  • babulibaba

    i think they are doing this to prevent wii u froim dying out as before they said they need wii u to sell ps4

    • question

      because nintendo can’t find a new manufacturer…. and need sony to help them out…..

  • Gamingsince75

    “state of the art facility” yet only makes chips for Wii U? Yeah that makes perfect sense.

    • question

      sorry for not creating nuclear based consoles that turn into transformers at yer whim yer majesty!!!

    • mechlord

      State-of-the-art yes, because they use methods and tools that are the very best. They make the eDRAM chip…who are you to say that chip is poorly made or without quality?

  • vickybat

    Sony is going to make CMOS chips for its smartphones here. It won’t manufacture eDRAM chips for Wii u. This puts some questions on Wii u’s future.

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