Intel reportedly lost bid to design, manufacture PlayStation 6 processor to AMD in blow to troubled foundry business

Intel lost a competitive bid against AMD in 2022 to design and manufacture the processor for the PlayStation 6, according to a Reuters report citing three unnamed sources.

The company bid against AMD to design the chip and against Taiwan’s TSMC to manufacture it, the report said.

Intel and Sony reportedly discussed the bids over the course of several months in 2022, including meetings between the two companies’ chief executives, other executives and dozens of engineers.

AMD designed the current PlayStation 5 chip and TSMC manufactures it.

Billions in revenue

The contract would reportedly have been worth billions of dollars in revenue and would have involved fabricating thousands of silicon wafers a month.

For the design contract, Broadcom was also a bidder and was eliminated at an earlier stage, with the final two bidders being AMD and Intel.

The PlayStation chip deal originated with Intel’s design segment, but would also have benefited the foundry business, which began operating semi-independently from the rest of the company early this year as a key part of the company’s turnaround plan.

A profit over how much profit Intel would make from each chip prevented the firm from settling on a price with Sony and opened the way for AMD’s winning bid, the report said.

Moving from the current AMD design to Intel would reportedly have risked backward compatibility, which could only have been ensured through costly use of engineering resources.

Foundry plan

The deal could have been worth roughly $30 billion (£22.7bn) to Intel over the course of the contract, according to internal company projections cited in the report.

Intel declined to comment but said: “We strongly disagree with this characterisation.

“We have a very healthy customer pipeline across both our product and foundry business.”

Last month Intel reported disastrous financial results, and said it would cut its workforce by 15 percent to save $10bn and would cut its capital spending on factory expansion related to its keystone foundry strategy.

In April the company disclosed $7bn in operating losses for the foundry business.

Sony this month announced the PlayStation 5 Pro gaming console, but has not yet discussed the PlayStation 6.