Intel’s attempt to supply chips for Sony’s upcoming PlayStation 6 (PS6) console has reportedly fallen through, marking a significant setback for the chipmaker’s efforts to expand its contract manufacturing business. Sources familiar with the situation revealed that a dispute over profit margins prevented Intel and Sony from reaching an agreement.
Sony, a leader in the gaming industry, has traditionally relied on experienced design contractors for its system processors. The current generation of PlayStation consoles is powered by custom chips from AMD, a partnership that appears set to continue with the PS6.
The stakes were high for Intel. Securing a contract with Sony could have infused approximately $30 billion into Intel’s contract manufacturing division, providing a much-needed boost as the company seeks to attract high-profile clients. Sony’s consoles typically sell over 100 million units within five years, making the contract highly lucrative.
Intel’s failure to secure the deal comes amid broader challenges for the company. Having missed the initial surge in artificial intelligence technology dominated by competitors Nvidia and AMD, Intel reported a disappointing second quarter in August. In response, the company announced plans to reduce its workforce by 15% to save $10 billion and is reportedly scaling back on capital expenditure for factory expansions, which were key to its foundry strategy.
An Intel spokesperson responded to the reports, stating, “We strongly disagree with this characterization but are not going to comment about any current or potential customer conversations. We have a very healthy customer pipeline across both our product and foundry business, and we are squarely focused on innovating to meet their needs.”
Neither Sony nor Broadcom responded to requests for comment, while AMD declined to comment on the matter.
The continuation of Sony’s partnership with AMD reinforces AMD’s position in the gaming console market and could have significant implications for the industry, investors, and consumers eagerly awaiting the next generation of gaming technology.
Reference(s):
cgtn.com
