Intel said to lose PlayStation 6 chip contracts to AMD, TSM in 2022: report

Intel (NASDAQ:INTC) lost a contract to design and manufacture the processors for the upcoming Sony (NYSE:SONY) PlayStation 6 gaming console to AMD (NASDAQ:AMD) and Taiwan Semiconductors (NYSE:TSM) in 2022, Reuters reported.

Intel shares rose 1.2% in premarket trading amid a report that it has qualified for a grant to manufacture chips for the Pentagon.

Conversely, AMD and Taiwan Semi were fractionally lower.

The loss of the two contracts — AMD won the design contract while Taiwan Semi won the manufacturing portion — could have amounted to roughly $30B in revenue, Reuters added, citing sources with knowledge of the events.

The dispute between Sony and Intel was said to result from the amount of profit that Intel took, two of the news outlet’s sources explained. As a result, AMD won the competition between Intel and itself for the chip design portion, with the process also eliminating Broadcom (AVGO) and others.

The discussions between Sony and Intel spanned over a series of months and included both Intel Chief Executive Officer Pat Gelsinger and Sony Chief Executive Officer Kenichiro Yoshida, as well as other executives and engineers at both companies.

Intel did not immediately respond to a request for comment from Seeking Alpha.

Sony announced an updated version of its PlayStation 5 console, the PS 5 Pro, last week. It has yet to unveil the PlayStation 6 console.