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Toshiba to spin off PlayStation 2 CPU development team

Creates new company called ArTile

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Toshiba has set up a new company to build general-purpose CPUs based on the PlayStation 2's Emotion Engine processor - or TX79 as it's more formally known.

ArTile Microsystems, which will operate out of San Jose, California, will target a variety of embedded applications for its EE-based chip line, including all the usual suspects: set-top boxes, networking devices, digital TVs and Net appliances.

ArTile isn't an entirely new company - Toshiba is essentially spinning off its existing processor development operation. As an independent but wholly-owned subsidiary, Toshiba expects ArTile's business to ramp up quickly and to be employing around 200 people by 2004.

At that point, it will be realising revenues of $250 million, the parent company hopes.

Interestingly enough, Toshiba has mooted such a move before (see Toshiba staffer punts semicon sell-off). Way back in 1999, we reported on a lone Tosh executive who said the company was considering just such a move. His comments followed the launch and flotation of Infineon, Siemens' former semiconductor subsidiary.

The creation of ArTile represents a much smaller move than the one suggested by the Toshiba staffer, who was suggesting the plan for the company's entire chip-making operation.

By why spin off ArTile? Essentially, to recruit better staff. "Strengthening resources to develop microcontrollers is indispensable for the expansion of the system LSI business," said a Toshiba spokesman. "It is better to found a new company to get excellent human resources and give them better incentives."

Which sounds like stock options to us. In the current financial climate, we wonder how many takers it will get. ®

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