Intel reportedly misses out on $30 billion PlayStation 6 chip deal

Intel Corporation has reportedly failed in its bid to supply chips for Sony's next-generation console, PlayStation 6. According to sources familiar with the matter, Intel was in talks with Sony for months in 2022 to design and manufacture the semiconductor components for the PlayStation 6.

Winning the contract would have been hugely significant for Intel. The order would have kept Intel's manufacturing capacity filled for at least five years, and revenue from the contract was estimated at $30 billion throughout the contract. That lost business comes as Intel tries to grow the contract manufacturing part of its business and add more big customers who can help use its chip fabrication plants.

Instead, AMD was selected to design the chips for the PlayStation 6, continuing its deal with Sony that began with the PlayStation 4. While AMD will handle the design, TSMC will carry out the actual production, following the industry model of chip design, which is separate from fabrication.

According to reports, Intel was unable to settle the main issues with Sony regarding how the two companies would share their profit. There was also an issue over backward compatibility for PlayStation games, which would have demanded that Intel invest heavily in a processor capable of meeting Sony's needs. These were some of the factors that contributed to the breakdown in talks without a deal.

The missed Sony opportunity and other setbacks have exacerbated the challenges facing Intel's leadership. The technology giant recently saw the abrupt departure of board member Lip-Bu Tan over disagreements about company strategy. Intel executives are debating potential divestments and reorganizations in the wake of multi-billion dollar losses in its manufacturing division.

Securing the PlayStation 6 chip order could have provided Intel with a much-needed boost. However, the talks with Sony reportedly fell apart due to clashes over financial terms and technical requirements.

Source: Reuters

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