Sony considers Taiwan, PRC for PSP outsourcing

Sony Corp., the world's second-biggest consumer electronics maker, may outsource production of the PlayStation Portable, possibly to China or Taiwan, to meet rising demand for its first handheld video-game player, said Ken Kutaragi, president of the video games subsidiary.

"We have to somehow increase our production capacity as we're not prepared to start selling in Europe, we've run out of units in the U.S. and it's still selling well in Japan," Kutaragi, president of Sony Computer Entertainment Inc., said yesterday at a games industry meeting in Tokyo.

Sony in February said it aims to more than double monthly production of the PSP to 2 million units by this summer, to compete with Nintendo Co. The Kisarazu factory in Chiba, east of Tokyo, is the only facility that makes Sony's PSP console. The factory makes about 1 million units a month, Kutaragi said.

"We're making the key components here, but we're looking to expand assembly of the product outside of Japan," Kutaragi said. He said China and Taiwan are two possible centers from which the company could manufacture.

Sony expects to ship 12 million units of the PSP this fiscal year. The company, which started selling the device in Japan on December 12 and in the U.S. in March, had shipped 2.97 million units as of March 31.

Hon Hai Precision Industry Co., Taiwan's biggest electronics company, won an order to make PSPs for Sony, the Commercial Times reported yesterday. Hon Hai, will assemble the PSP and begin shipments to Sony as early as July, the Taipei-based newspaper said, citing several foreign analysts.

Hon Hai declined to comment on the report and Sony spokeswoman Yoshiko Furusawa said nothing has been decided on moving assembly abroad.