TOKYO – Sony said Tuesday the U.S. Department of Justice is probing its electronics unit as part of an industrywide investigation into sales of a particular type of memory chip. The news could spell more trouble for a company already stung by sinking profits, a global battery recall and product delays.
The Japanese company received a subpoena from the Justice Department's antitrust division seeking information about Sony's static random access memory, or SRAM, business, company spokesman Atsuo Omagari said.
"Sony intends to cooperate fully with the DOJ in what appears to be an industrywide inquiry," the company said in a short statement.
The probe could add to a growing list of headaches for Sony.
It has been battered by a worldwide recall of lithium-ion batteries on fears they could overheat and burst into flames. The recall affected almost every major laptop maker in the world, including Dell Inc., Apple Computer Inc. and Lenovo.
Just last week, Sony Corp (SNE) said profit plunged 94 percent in the July-Sept. quarter, thanks to a worldwide laptop battery recall and red ink in its video-game business.
It also has lowered its profit forecast for the fiscal year through March 2007 to 80 billion yen ($673 million), down 38 percent from its initial projection and down 35 percent from fiscal 2005.
SRAM is a kind of computer memory that is faster and more reliable that DRAM, or dynamic random access memory. Although it does not need to be refreshed like DRAM, SRAM is also more expensive.
SRAM is found in relatively small quantities in personal computers. It's also used in disk drives, communications equipment and networking gear.
Omagari declined to provide other details about the investigation. But in 2005, Sony sold 3.3 billion yen ($27.7 million) worth of SRAM. The product is made by outside manufactures for Sony, which in turn sells the memory chips to other electronics makers, Omagari said.
He would not elaborate on who manufactures the chips for Sony or to whom Sony sells them.
Earlier this month, U.S.-based chipmaker Cypress Semiconductor Corp. said its SRAM operations were also under investigation by the U.S. Department of Justice.
A separate DOJ investigation into price-fixing among DRAM companies has so far resulted in more than a dozen charges against individuals and more than $731 million in fines against Samsung Electronics Co., Elpida Memory Inc., Infineon Technologies AG and Hynix Semiconductor Inc.
Problems with its long-awaited next-generation PlayStation 3 console have also dug deep.
Sony reported a 43.5 billion yen ($366 million) operating loss in its gaming division in the July-September quarter because of charges related to its development.
Sony said last month the machine's launch in Europe will be delayed until March next year because of mass production problems in a video technology called Blu-ray disk that the machine supports. The PlayStation 3 is set to go on sale in the U.S. and Japan next month.
The company also reduced the PS3 price in Japan by about 20 percent in an effort to win buyers — a move that's likely to reduce sales revenue because initial shipments are expected to be limited and sell out.
The company announced the probe after the market closed. Sony shares, which have fallen about 15 percent since May, finished up 10 yen, or 0.2 percent, at 4,850 yen ($40.75) on the Tokyo Stock Exchange.