In a strategic move, Sony has opted to continue its partnership with AMD for the PlayStation 6 (PS6) console, sidelining Intel's bid for the crucial chip supplier role. Sources reveal that Intel's inability to secure the contract has significantly impacted its nascent contract manufacturing business.
Sony has a history of relying on seasoned design contractors for its system processors, with AMD powering the current generation of its consoles that have collectively sold over 100 million units in the past five years. This decision could have potentially injected around $30 billion into Intel's contract manufacturing sector, which is now facing challenges in attracting major new clients.
The fallout stems from a disagreement over the profit margins Intel expected from each chip sold to Sony, preventing the two companies from reaching a pricing agreement. This setback arrives as Intel grapples with the repercussions of missing out on the initial AI boom dominated by Nvidia and AMD. The company reported a challenging second quarter in August and has announced plans to cut 15% of its workforce to save $10 billion. Additionally, Intel is reportedly scaling back its capital expenditure on factory expansion, a key element of its foundry strategy.
Responding to the reports, an Intel spokesperson stated, \"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.\" Sony and Broadcom did not respond to requests for comment, and AMD declined to provide a statement.
Reference(s):
cgtn.com
