Royal Philips Electronics said it will spin off its TriMedia processor division into an independent company based in Silicon Valley, and will accept an equity investment in the operation from Sony.
The new company will be called TriMedia Technologies and is to be formed from a unit within Philips Semiconductors operations, Philips said.
The plan is to separate the business of the new company from Philips Electronics in order to make chips that can be sold more easily to consumer electronics companies that compete with the consumer electronics divisions of both Philips and Sony.
The company will create and license embedded processor core designs and software to help clients "quickly develop advanced digital consumer products," according to a Philips statement.
TriMedia Technologies will be "a neutral company that will license its technology to other manufacturers," according to a Philips spokesman. Philips intends to expand its portfolio of strategic investors in TriMedia, and is willing to reduce its share in the company below 50%, the spokesman said.
Philips hopes to see TriMedia processors used in all forms of digital set-top boxes and video devices. The objective is to have TriMedia become "the standard in the field." TriMedia chips are currently used in Philips and Sony digital TV products and was shown by Samsung in a next generation ATSC DTV set-top box. TriMedia is also used by Amoisonic in a new Super Video CD recorder.