Chip woes prompt Sony to cut PlayStation 5 production forecast by millions

Sony has cut PlayStation 5 production forecasts by four million units due to issues surrounding the console’s custom system-on-chip (SoC) design. 

On Tuesday, Bloomberg reported that the tech giant is experiencing a 50% lower production rate of its SoC than expected, creating a “bottleneck” that is holding up overall unit production. 

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SoCs are integrated circuits that combine crucial computer components on a single chip, such as a GPU and memory. In the debut of its latest flagship console, Sony revealed custom AMD RDNA 2 GPU technology capable of running at up to 3.5GHz, as well as 16GB RAM and 825GB SSD internal storage.  

The custom SoC, according to people familiar with the matter, is proving problematic. The publication reports that production is “gradually improving” but is yet to “reach a stable level.” 

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For Sony, slicing PlayStation 5 production predictions from 11 million to 4 million is likely to be of serious concern considering we are rapidly coming into the holiday season — prime time for a console refresh, especially one that PlayStation fans have been waiting for since the launch of the PlayStation 4 in 2013. 

The company may have also expected a sales boost due to COVID-19, which has meant that many of us are staying at home, children need to be entertained, and new lockdown orders may be on the horizon as we enter the cold and flu season. 

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Rival Microsoft has taken an aggressive stance when it comes to the upcoming Xbox refresh, offering consumers a budget-friendly option — the $299 Xbox Series S — and a $499 premium model, the Xbox Series X.

On September 16, Sony is due to launch a PlayStation 5 online event, expected to reveal the console’s final price point, as well as updates from developers and partners. It remains to be seen, however, if the company will have the stock required to meet consumer demand. 

At market close, Sony shares dipped by 2.41%. 

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