How Intel Lost the Sony PlayStation Business

Intel Lost Out on a Contract to Design and Fabricate Sony’s Playstation 6 chip in 2022, which will be significant blow to its building its fledgling contract manufacturing business, according to three sources of the events of the events.

The effort by intel to win out over Advanced Micro Devices in a competitive bidding process to supply the design for the forthcoming playstation 6 chip and Taiwan semiconductor manufacturing co As the contract manufacturer would have Amounted to Billions of Dollars of Revenue and Fabricating Thousands of Silicon Wafers A Month, Two Sources Said.

Intel and AMD was the final two contenders in the bidding process for the contract.

Winning the Sony Playstation 6 Chip Design Business would have been a Victory for Intel’s Design Segment and would have doubled as a win for the company’s contract manufacturing effort, or foundry Business, White Was the CenterPiece of Intel Ceo Pat gelsinger’s Turnard plan.

Gelsinger Announced Plans for Intel to Create a Foundry Unit in 2021 and Formally launched it at an event in san jose, california, in februry of this year. The playstation chip deal originated in Intel’s design segment, but would have been a boon to the financial performance of the foundry business after this year’s sepression.

Details of the discusations and how Intel Missed Out on the Contract for Sony’s as-Yet-Unnounced Next-Generation Game Console are reported here for the first time.

Typically, Sony Consoles Sell More Than 100 Million Units Across a Half Decade. For a chip designer, the console business delivers a lower profit than the gross margins of more than 50 percetic for products like artificial intelligence chips, but nonthelesents stake Profit from Technology a Company has already developed. Sony’s business also also could have helped boost Intel’s Contract Manufacturing Business, Whoch Now Struggles to find big new clients.

A Dispute Over how much profession intelly studs from each chip solds to the japanese electronics giant blocked intelet inl from settling on the price with Sony, According to Two of the Sources. INTEAD, Rival AMD Landed The Contract Through a competitive bidding process that Eliminated Others Such as Broadcom, Until only Intel and AMD Remaned.

Discussions Between Sony and Intel Took Months in 2022, and Included Meetings Between the Two Companies’ Ceos, Dozens of Engineers and Executives.

In response to reuters reporting about the playstation 6 talks and intelly’s failure to win the business, an intel specksperson said: “We strongly disagree with this Characterization but this Characterization but are not going toom Current or Potential Customer Conversions.

Sony and broadcom did not respond to requests for comment. AMD declined to comment.

Backwards Compatibility

The current Generation of Sony’s PlayStation Consoles are Powered by Custom Chips with a Design Contract Fulfilled By Amd.

Sony announced the Playstation 5 Pro Last week, but has not yet unveiled the next generation. Years after ITS 2020 Launch, Sony said it sold 20.8 million of the first-generation PlayStation 5 Systems in Fiscal 2023.

Similar to how big tech companies like Google and Amazon relay on outside vendors to help design and manufacture custom Ai Chips, Sony Relies on Experienced Design Contractors to Make The Process for Systems.

Console Chip Designs Typically Try to Ensure Compatibility with Earlier Versions of the System, to Allow Users to Run Older Games on the New Hardware. Moving from AMD, which made the playstation 5 chip, to Intel Delhi Have Risked Backwards Compatibility, which was a subject of discussion between intel and Sony ENGINELS and Executives, The SADIDES

Ensuring backward compatibility with prior versions of the playstation would have been costly and take engineer Allowing Playstation Users to play games they have purchased for older systems is a feature Sony often Includes in a Next-Generation System.

Having Missed the first wave of the ai boom dominated by nvidia and amd, Intel reported a disastrous second quarter in August. Intel Announced Plans to Cut 15 Percent of Its Workforce to save $ 10 billion (roughly Rs. 83,843 Crore) and has prepared a plan to reduce it to reduce its Capital Spending Its foundry strategy.

Seeking a marquee customer

The sudden departure of lip-pu tan, a high-profile board member, over differentces in Intel’s future, added to the company’s challenges as gelsinger and other intel-intel executives Present Plans to the Board AT ATA AATING Week, Multiple Sources said. Reuters Reported Early this month on the planned board meeting, Citing a source family with the board discusations.

The potential plans include ideas on how to Shave off businesses Intel Can No Longer Afford to Operate, Reuters Reported. Executives are also expected to debate the future of Intel’s programmable Chip Unit Altera, Including a Potanial Sale, and its manufacturing expansion in Germany.

Intel Split its design and manufacturing operations under gelsinger’s tenure, and has reported financial results separately since the first candidates Quarter this year. In April, the company disclosed $ 7 billion in operating losses for the manufacturing businesses.

Intel Has Struggled to Find a Marquee Customer It Can Publicly Talk About For the First Manufacturing Process, Known As 18A, Open to Other Companies. If Intel Had Won The PlayStation 6 Chip, it could have Occupied Its Foundry Unit for more than five years, two of the sources said.

Sony’s Console Business Could have Pumped Roughly $ 30 Billion (Roughly Rs. 2,51,529 Crore) Into Intel Over the Course of the Contract, According to Intel’s, According to Interte Said. The PlayStation 2 Sold Roghly 150 Million Units Since Its Launch in 2000.

A long-term Sony Contract Child Have Helped Bring in Big New Clients for Intel’s Contract Manufacturing Effort, Two Sources Said, As Intel Continues to Struggle With AtRACTINGE CUSTRACTING CUSTRACTING CUTH Advanced 18A process.

© Thomson Reuters 2024

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