PlayStation 6: AMD is said to have outbid Intel
The combined processor for the PlayStation 6 is once again to come from AMD. Intel allegedly wanted too much money for a PS6 design.
(Image: Shutterstock.com/Alena Veasey)
Sony and Intel are said to have been negotiating a possible processor design for the next PlayStation as early as 2022. The company bosses, dozens of engineers and managers were involved in the talks on the Playstation 6 processor, according to a report by the Reuters news agency.
Such talks years before the finalization and production of a new console are normal. Sony has just announced the PS5 Pro – so a PS6 can be expected around 2028. There were four years between the PS4 Pro and PS5.
AMD vs. Intel
Rumor has it that AMD and Intel were the last two potential suppliers, after extensive rounds of negotiations even with Broadcom. In the end, AMD is said to have beaten out its competitor Intel with lower prices. According to Reuters sources, Intel insisted on too high margins and therefore too high costs per chip.
Console processors traditionally have a low margin. However, the business with such processors can be worthwhile, as they generate billions of US dollars over many years. The PlayStation 4 and Xbox One, for example, helped AMD to survive during the difficult period with the Bulldozer CPUs.
In Intel's case, a PlayStation 6 could have boosted confidence in its own semi-custom development and chip contract manufacturing (Intel Foundry). Apart from AMD, Intel is also the only manufacturer that can supply an x86 CPU. This would have simplified compatibility with PlayStation 5 and PlayStation 4. Nvidia, for example, could only design an ARM processor for Sony and is known for particularly high margins.
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More pressure than in 2022
In 2022, however, Intel Foundry had not yet been spun off as a chip contract manufacturer, and Intel's situation also looked much better: The company made a net profit of eight billion US dollars for the year as a whole and the gross margin was still well over 40 percent. The latter has now fallen to 35.4 percent; in the last quarter alone, Intel made a net loss of 1.6 billion US dollars.
With the production generation 18A, things are set to pick up at Intel Foundry from the end of 2025. The manufacturer speaks of around a dozen external customers for the 18A process, although no one has yet publicly committed to Intel Foundry.
Meanwhile, Reuters quotes an Intel spokesperson in response to its own report:
"We disagree with this narrative, but will not comment on current or potential customer discussions. We have a very healthy customer pipeline, both in our product and foundry businesses, and we are fully focused on innovating to meet their needs."
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