Report: Sony Has Cut Down Initial PS5 Production by 4 Million Due to Chip Production Issues (Update)

Update: Sony has refuted the Bloomberg report, saying the information is false and production numbers remain unchanged.

Original: A Bloomberg report has claimed that Sony has cut down PlayStation 5‘s initial production forecast by 4 million due to manufacturing issues with its custom system-on-chip (SOC).

Back in July, the company had reportedly increased its production order to meet demand, but it’s now struggling to hit its initial targets. As a result, approximately 11 million units will be produced initially, sparking fears of shortage.

Sony’s shares fell by 2.4 percent by close on Tuesday following this news. The company declined to comment on Bloomberg’s report. Analysts have said that if true, this will be seen as a negative for the business.

The report reads:

The company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into its ability to produce as many consoles as it wishes, said the people, who asked to remain anonymous because the deliberations aren’t public. Yields have been gradually improving but have yet to reach a stable level, they added.

Analysts are concerned that SOC production issues can result in an increase in the component’s cost, which will impact Sony’s profits. It’s also possible that Sony will revise this forecast yet again before the end of the current fiscal year (March 2021).

Sony has yet to open up preorders for the PS5. It is expected that the company will reveal price, release date, and preorder information at tomorrow’s highly-anticipated event.

We’ll update our readers when we have more information. Don’t forget to tune in for the event.

[Source: Bloomberg]