Sony Corporation ("Sony") agreed to establish a joint venture company with NEC Corporation ("NEC") for Optical Disc Drive Business, and decided to separate and transfer the operation of Optical Disc Drive Business to a newly established company, Sony NEC Optiarc Inc. on April 1, 2006.

1. Purpose of the separation

Sony aims to strengthen its business in the rapidly expanding optical disc drive market through the timely delivery of highly reliable and competitive products.
By partitioning our optical disc drive business and merging with the optical disc drive operations of NEC, we believe that the technological and human resources strengths of both companies will be maximized and the new joint venture company will make an effective and speedy business start.

2. Overview of the separation

(1) Schedule of the separation
February 27, 2006 Approval of separation plan
April 1, 2006 Date of separation
April 3, 2006 Registration of separation
*Pursuant to the provisions of Clause 1 of Article 374-6 of the Commercial Code, Sony shall perform the separation without approval of the separation agreement by its shareholders.
**Consummation of the establishment the joint venture company remains subject to approvals of any governmental or regulatory authorities required in Japan and other countries.

(2) Method of the separation
1. Method
Sony will separate a part of its business and the new company, Sony NEC Optiarc Inc. will take over the separated part of the business.

2. Reason for adopting this method
This method was chosen because it was determined to be the most efficient means by which to transfer the relevant business.

(3) Allocation of shares
The new company will issue 40,000 shares of common stock, and will allocate 22,000 shares to Sony and 18,000 shares to NEC.

(4) Rights and obligations to be taken over by the new company
The following items (i) and (ii) will be taken over by the new company.
(i) Cash, inventories, property, plant and equipment and intangible assets belong to the Optical Disc Drive Business of Sony
(ii) Rights, obligations and entitlement under the contracts which relate only to the Optical Disc Drive Business of Sony as well as the rights, obligations and entitlement under the individual contracts based upon such contracts and any accompanying rights and obligations
The new company will not take over the employment agreements between the employees belong to the Optical Disc Business and Sony.

(5) Prospects of paying debt obligations
Based on the projected financial statement as of September 30, 2005, both Sony and new company have significantly more assets than liabilities. Additionally, both companies are expected not to post any significant matters from their operations after the separation that are serious enough to affect their financial capability to pay their respective debt obligations. Therefore, Sony believes that both Sony and the new company can pay the debt obligations that will come due after the separation.

(6) Newly Appointed Directors of the new company
The newly appointed directors and corporate auditors of the company established by the separation are as follows:

Directors: Katsumi Ihara, Kiyoshi Nishitani, Hidenosuke Kanai,
Shinichi Yamamura, Shunichi Suzuki, Masahiko Yamamoto,
Eiichi Ichikawa

Statutory Auditors: Ken Satou, Takayuki Morita

3. Summary of parties

(15) Business results for the three most recent years (unit: millions of yen)

4. Description of the business to be separated

(1) The operation of Optical Disc Drive Business

(2) Assets and liabilities of the business to be separated (as of September 30, 2005)

5. Circumstances after separation