Intel Missed Out on PlayStation 6 Chip Deal to AMD: Report

In 2022, Intel Corp INTC lost out to Advanced Micro Devices AMD, a multiyear Sony Group Corp SONY PlayStation 6 chip deal, according to a Reuters exclusive report.

The sources told Reuters that tapping Intel would have posed backward compatibility issues, entailing higher costs and engineering resources, as AMD made the PlayStation 5 chip.

Intel fell out with Sony by failing to quote an appropriate selling price per chip after factoring in its profit share per chip sold to the PlayStation maker, the sources told Reuters.

Also Read: Google Picks Taiwan Semiconductor For Pixel Chips, Samsung Loses Key Deal: Report

According to Reuters, the five-year deal involving contract chipmaker Taiwan Semiconductor Manufacturing Co TSM could have contributed $30 billion to Intel.

Since its release in 2020, the PlayStation 5 has sold over 59 million units, marking a respite for significant console makers, which faced double-digit percentage declines in May 2024. Sony is eying an upgraded, premium version dubbed PlayStation 5 Pro before the holiday season.

Sony’s fiscal first-quarter 2024 topline growth was 2% to $19.3 billion, beating the consensus of $17.19 billion. Game & Network Services (G&NS) revenue increased 12%.

Intel stock has been down over 48% in the last 12 months as it has failed to capitalize on the artificial intelligence shift.

This has forced it to weigh strategic options for Israeli autonomous driving company Mobileye Global Inc MBLY and its Enterprise Networking division.

The contract chipmaker bagged two wins in September, including $1.91 billion in Polish state grants for a new chip plant in the country and a $3.5 billion deal to manufacture semiconductors for the U.S. military.

AMD stock is up 49% in the last 12 months as it succeeded in tapping the AI frenzy while maneuvering its position versus Nvidia Corp NVDA.

Price Actions: INTC stock closed higher by 6.36% to $20.91 on Monday. AMD closed at $152.08.

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