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Sony to boost in-house chip production

Gadget giant to spend $576 million on chips to boost value of its electronics products.

Sony will increase investment in its chip business by up to $576 million over the next two years to enhance the competitiveness of its products, the company announced Tuesday.

The electronics and entertainment giant said it will invest in two factories in Southern Japan--the Sony Semiconductor Kyushu Corporation's Kokubu Technology Center and the Kumamoto Technology Center.

The funds will go toward increasing production at the two centers, which manufacture components used in liquid crystal displays and digital cameras. Expansion of the facilities is set to begin in May, with components produced from the two centers scheduled to come out in 2006.

Sony is one of the few companies in the electronics industry to use its own chips in its products. With its broad portfolio of businesses, Sony can use its own processors on a large scale. Sony will use its chips to differentiate and add value to its electronics products, according to a release from the company.

Tuesday's announcement marks Sony's latest move to increase its investments in semiconductors. The company has teamed with Toshiba and IBM on a new chip called the Cell to be used in the upcoming PlayStation 3 gaming console.

Sony also recently teamed with rival Samsung on an LCD plant to product panels.

The moves and investments are aimed at reviving its electronics business which has been improving its performance.