Report: Sony slashes PlayStation 5 production estimates due to chip supply problem

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Report: Sony slashes PlayStation 5 production estimates due to chip supply problem
Image: YouTube | PlayStation

Sony has reportedly slashed its PlayStation 5 (PS5) production target by 4 million units due to chip supply issues. The Japanese conglomerate now expects to make only 11 million consoles through March 2021 because of low system-on-a-chip (SoC) manufacturing yields.

In July, the corporation doubled its video game system production quota amid mounting demand from homebound consumers.

Why Sony Reduced its PS5 Production Forecast

Right now, Sony is encountering severe difficulties fabricating enough bespoke PS5 central processing units (CPUs) to meet its needs.

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One of the key reasons gamers are excited to get their hands on the new platform is its impressive technical specifications. With an AMD RANA 2 graphics processor unit (GPU), 16 GB of GDD6 RAM, and 10.28 teraflops of processing might, it’s a stunningly powerful console. However, its most impressive attribute is its custom AMD Zen Core 2 chipset, which enables the system’s rapid load times and awe-inspiring game instances.

But according to Bloomberg, Sony’s recent PS5 CPU yields have been as low as 50 percent. As a result, the electronics company has reined in its hardware output expectations.

Bad Timing and Bad Luck

While there is no good time for a manufacturer to encounter supply chain issues, experiencing production issues in September is especially challenging.

Last week, Sony’s rival Microsoft announced its new version of the Xbox would launch in early November. That means the corporation will likely launch the PS5 around the same time. The company needs to get its new console out soon to take advantage of the holiday season spike in consumer spending.

But given its weak console SoC yields, Sony may face a sellout of its latest system during the pre-order phase. If that happens, gamers worldwide will be displeased, and the corporation’s stock could take a significant hit.

Despite the electronics company’s best efforts, the PS5 manufacturing cycle has had more than one major problem.

In April, the firm reportedly planned a smaller roll out for its new system than it did for the PS4. The coronavirus pandemic’s disruption of the global supply chain negatively impacted its part sourcing and hardware assembly activities.

In addition, the PS5’s memory-heavy design prompted Sony to snap up a lot of NAND RAM. Consequently, Business Korea predicted global demand for the flash memory component rose by 5 percent in Q4.

As the console’s mass production likely increased NAND module pricing worldwide, each successive PS5 order could be increasingly costly. Even with its massive size, Sony is not immune to the economic realities of the global electronic components supply chain.

Given the global appeal of the PlayStation brand, the PS5 will likely be very successful in the long-term. However, inventory constraints might tarnish what should have been a celebratory new product introduction for the electronics giant.

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