Intel continued in advanced negotiations with Sony in 2022 to win a contract to supply chips for the PlayStation 6. And it failed for several reasons, which meant stopping the entry of a huge 30 billion dollars and will certainly slow the momentum of its nascent production business, according to what Reuters has exclusively told us.

Intel Corporation is experiencing one of the worst moments in its history. Rivals ate up business in all semiconductor divisions. Samsung in global production; NVIDIA on servers; AMD in client PCs or anything that comes from the ARM architecture with Apple as the protagonist and which can end its great dominance from the era Personal computer.

The stock market declines and operating losses are the result of a situation that – while not new as it dates back to the last five years – was unknown to the chip giant and could lead to new and drastic reductions in its workforce. with the sale of several units of your business.

PlayStation 6 chip contract

Another example of questionable management in recent years is the inability of his managers to reach a contract. According to sources familiar with the matter Intel has been in talks with Sony for several months in 2022 design and manufacture the main semiconductors for the PlayStation 6 game console.

Winning the contract would be extremely important for Intel. The order would employ Intel’s manufacturing capacity for at least five years and would mean revenues that analysts estimate at $30 billion over the life of the order (the console’s life).

In addition to the economic amount, the loss of the contract meant a a missed opportunity to enhance Intel IDM 2.0. Announced in 2021, it was one of the biggest business strategy changes in Intel’s history, essentially marking the company’s entry into the foundry business or manufacturing semiconductors for third parties on demand.

According to Reuters, Sony’s negotiations broke down due to disagreements over it financial conditions and technical requirements of the chipsespecially when it comes to compatibility with previous games. Recall that AMD powered Sony’s fourth and fifth generation home consoles, including the recently announced PS5 Pro.

And it will do it again with the PS6through a semi-custom chip that will actually be manufactured by TSMC following the manufacturing-independent chip design industry model that has become the standard for the vast majority of semiconductors. In addition to revenue, Intel is losing the ability to grow part of its contract manufacturing business and add important customers to its manufacturing division.