Sony slashes PlayStation 5 production target amid chip shortage, supply chain challenges: report
Sony is aiming to sell 14.8 million PS5 consoles by the end of fiscal year 2021
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Customers looking to get their hands on the highly sought-after PlayStation 5 could have even more trouble this holiday season as Sony Corporation has reportedly lowered its internal production target for the popular gaming console.
Sources told Bloomberg that the Japanese multinational conglomerate now expects about 15 million PS5s to be produced in the 2021 fiscal year, down from a previous target of more than 16 million.
Representatives for Sony and PlayStation did not immediately return FOX Business' request for comment.
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The revised outlook comes after Sony chief financial officer Hiroki Totoki warned on the company's second quarter earnings call last month that PS5 hardware has been significantly impacted by global supply chain disruptions and the semiconductor chip shortage.
"We are continuing to exert every effort to maintain the momentum of the PlayStation platform by meeting the expectations of the people who are waiting for PS5," Totoki told analysts.
PlayStation 5 (Photo courtesy of Sony Interactive Entertainment)
Sources told the outlet that PS5 assembly partners are in daily contact with component suppliers to try and confirm that shipments will arrive on schedule, but that uneven vaccine rollouts in developing nations where Sony suppliers have production bases has made the situation more challenging to predict.
The PS5, which had a strong debut following its launch in November 2020, became Sony Interactive Entertainment's fastest-selling console in history after surpassing 10 million units in July. However, that momentum has appeared to slow down as total PS5 units sold in the second quarter ending Sept. 30 came in lower than expected at approximately 3.3 million. Meanwhile, approximately 200,000 units of its predecessor, the PlayStation 4, were sold in the quarter, down from 500,000 units in the first quarter and 1.5 million units a year ago.
In October, Totoki said the company was aiming to sell 14.8 million PS5 consoles by the end of the fiscal year in March 2022. Though the company has set a PS5 sales goal of 22.6 million units for the financial year beginning in April 2022, Sony's manufacturing partners reportedly think the target will be difficult to meet.
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In order to ease supply constraints, Sony Semiconductor Solutions Corporation is planning to invest $0.5 billion in Taiwan Semiconductor Manufacturing Company's (TSMC) new chip factory in Japan, representing a less than 20% equity stake.
The $7 billion fab, which is expected to begin construction in 2022, is aiming to begin production by the end of 2024 and will have the capacity to produce up to 45,000 12-inch logic wafers per month.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SONY | SONY GROUP CORP. | 81.30 | -0.58 | -0.71% |
| TSM | TAIWAN SEMICONDUCTOR MANUFACTURING CO. LTD. | 127.72 | -4.54 | -3.43% |
Sony isn't the only video game console maker to be hit by the chip shortage and supply chain issues.
Last week, rival Nintendo cut its sales forecast to about 24 million units in the fiscal year through March, down from its original plan for 30 million units, according to Nikkei. In addition, Valve Corp. has delayed its Steam Deck portable console from December to February, citing global supply chain issues.