Japan's Sony Corp. is set to begin formal talks to buy a chip plant from Renesas Electronics Corp in order to increase the former's production of smartphone image sensors. Sources told Bloomberg that Sony planned to begin due diligence next week. Sony and Renesas may sign a memorandum as early as next week, another source said. 

According to the report, Sony is increasing its complementary metal-oxide semiconductors or CMOS output. CMOS are used in Sony's Xperia smartphones and Cyber-shot cameras as well as competitors' products like Apple's iPhone.

Sony chief executive officer Kazuo Hirai is seeking to bolster profits as the company struggles with falling demand for televisions and missteps with its Hollywood studio, Bloomberg said.

Sony's smartphone business only has 3.7% of of total global shipments, but had garnered almost a third of the USD7.6 billion market for low-power sensors. It plans to spend JPY60 billion (USD585 million) this financial year on facilities for its chip operations, the report said. 

Sony may pay about JPY10 billion for Renesas' factory and retain its 900 employees, Bloomberg said.