In a major setback for Intel, the tech giant lost out on a multi-year deal to supply chips for the upcoming PlayStation 6. According to a Reuters report, Sony opted for AMD, which also manufactured the chips for the current PlayStation 5. The decision was reportedly driven by concerns over backward compatibility and potential cost increases if Intel had been chosen.
Sources familiar with the matter told Reuters that Intel failed to provide a competitive price for the chips, taking into account its desired profit margin. This missed opportunity represents a significant loss for Intel, as the five-year contract with Sony could have brought in an estimated $30 billion in revenue. This would have been a much-needed boost for the company, which has struggled to capitalize on the growing AI market and has seen its stock price plummet by over 48% in the past year.
The PlayStation 5, launched in 2020, has achieved remarkable success with over 59 million units sold, defying the trend of declining sales witnessed by other console makers. Sony is already looking towards the future with an upgraded version, dubbed PlayStation 5 Pro, expected to be released before the holiday season.
AMD, on the other hand, has been capitalizing on the AI boom, resulting in a 49% stock price increase over the past year. This successful strategy has allowed AMD to position itself as a strong competitor to Nvidia, another dominant player in the high-performance computing market.
Intel’s recent struggles have prompted the company to explore strategic options for its Israeli autonomous driving subsidiary, Mobileye, and its Enterprise Networking division. This further highlights the pressure Intel faces to regain its footing in a rapidly evolving technology landscape.
Meanwhile, the contract chipmaker TSMC continues to dominate the market, securing key deals like the $1.91 billion Polish state grant for a new chip plant and a $3.5 billion contract to manufacture semiconductors for the U.S. military.
As the battle for market share in the technology industry intensifies, Intel’s failure to secure the PlayStation 6 deal serves as a stark reminder of the challenges the company faces. Its inability to provide a competitive offer, coupled with its struggle to adapt to the growing demand for AI capabilities, raises concerns about Intel’s future prospects.
