AMD reportedly wins over Sony Playstation 6 chip Contract

Intel no longer holds a contract with Sony PS6 chip, reports say. The competitor AMD has won over the bid for the contract. Intel failed to deliver the PS6 chip design in the bidding process. According to the source, the estimated contract revenue is up to $30 billion. 

According to three sources that shared the knowledge of events with Reuters , Intel has lost a deal of massive billion dollars potential. Intel was competing with AMD for the manufacturing of the Sony PlayStation 6 chip in 2022.

Taiwan Semiconductor Manufacturing Co was also part of the bidding process. The finalists of this process were Intel and AMD. The deal ended up in the hands of AMD, which has also custom-designed the chip for PS5.

The deal of the PS6 chip would have added a double win to Intel’s contract manufacturing efforts. This was also the priority of Intel CEO, Pat Gelsinger’s yearly turnaround plan.

Intel struggles to target new clients as big as Sony

According to Gelsinger’s plans, Intel created a foundry unit in 2021. This unit had its launch in February 2024. The PS6 chip deal was part of the Intel design segment. However, this deal would have skyrocketed the financial performance of Intel’s foundry business.

Intel could have benefited from Sony to boost its contract manufacturing business. As of now, Intel is struggling to target new clients as big as Sony. 

100 million units of Sony consoles sell across in 5 years normally. Chip designers can make more revenue from half of the products like AI chips as compared to the console business. However, this business can make a steady profit from the existing technology of a company. 

Intel says they have enough number of clients

“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.” – Intel Spokesperson

Intel spokesperson shared with Reuters that they have enough clients and they are focused on catering to their needs. However, the spokesperson did not share any names. 

Sony could risk the backward compatibility transitioning from AMD to Intel

AMD custom chips are currently being used in the current generation of PlayStation consoles.

According to the sources, moving to Intel from AMD for the PS6 chip would have been a risk for Sony in case of backward compatibility. The requirement for the console chip design is compatibility with older versions of the system. It allows the players to run older games on the newer version of hardware. This feature is specifically a priority for Sony in their new systems.

Last week, the PlayStation 5 Pro was announced by Sony. However, there is no announcement yet about the next generation. 

Intel’s performance was underwhelming in the first wave of the AI boom

Nvidia and AMD dominated the first wave of the AI boom. In contrast, Intel performed badly in the second quarter of August. As a result, Intel made the announcement to let go of 15% of its workforce which would save $10 billion.

Additionally, Intel also planned to decrease the investments on expanding the factory which was the basis for the foundry plan.