The heart of the PS3, Sony’s highly advanced Cell processor, will no longer be made in-house for future PS3s, according to a Sony executive. Instead, the chip will be farmed to outside manufacturers in order to save the semiconductor division from further losses associated with making the chip.
Yutaka Nakagawa, Executive Deputy President of Sony said to Reuters that the amount of money invested into the Cell processors would be cut back over the next three years. Nakagawa said, "When we first offered the PS2, there were no semiconductor companies that were able to make chips for the machine, so we did it ourselves. But now, there are companies that specialize in chip production. They are aggressively investing in cutting-edge technology. Our basic understanding is that we probably won’t need to do everything by ourselves for next-generation chips."
The present Cell processors for the PS3 are based upon 65nm and 90nm technology. As the Cell manufacturing process advance, it will become cheaper to produce. Sony is evaluating its future plans and is deciding whether it will take over production when chips go to 45nm technology by 2009. "We tentatively plan to start commercial production of 45-nanometer chips in late 2008 or early 2009. We are going to study carefully whether we should carry out all the capital investment and produce them in-house," remarked Nakagawa.
Sucess of the PS3 may depend on Sony’s ability to finally reduce the price point of the unit, which now stands at $499 and $599 for its entry level and deluxe version, respectively. The 45nm chip will reduce production costs of the PS3 and will allow the company the freedom to pass those savings onto the consumer.
