Sony PlayStation Chips: How Intel's Bid for the PlayStation 6 Contract Went Wrong

The significant loss of a contract to design and fabricate Sony's PlayStation 6 chip in 2022 was a major setback for Intel, impacting its nascent contract manufacturing business. Intel's struggle against Advanced Micro Devices (AMD) in this competitive bidding process could have generated billions of dollars in revenue had they secured the deal.

Intel vs. AMD: The Bidding Process

In a closely contested bidding war, Intel and AMD were the last contenders for the lucrative Sony PlayStation 6 chip contract. Winning this bid would not only bolster Intel’s design segment but also enhance its foundry business, crucial for CEO Pat Gelsinger’s strategic turnaround. However, a profit-sharing dispute with Sony hindered negotiations.

Impact on Intel's Future

With the reputation of Sony consoles attracting over 100 million units typically sold, Intel's contract with them would have ensured steady revenue despite lower gross margins than other products. Notably, this lost opportunity now leaves Intel's contract manufacturing division seeking new clients.

• Discussions between Intel and Sony included high-level meetings.
• Intel's inability to agree on pricing led to AMD winning the contract.
• Struggles for Intel's foundry business become even more pronounced.

Intel's bid was a critical moment for its future in the competitive market of chip manufacturing. Continuing to face hurdles, the missed contract with Sony is a poignant reminder of the challenges ahead.