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Gamers spitting chips over delays to PlayStation 5 consoles

Gamers spitting chips over delays to PlayStation 5 consoles

 
Highlights
  • Computer chip shortage impacting production of PlayStation 5.
  • Data by information platform Grafa shows chip shortages impacting production of PlayStation 5 consoles.
  • Consoles competing with cars for crucial computer chips.
MEDIA RELEASE, June 22, 2021:

Gamers clamouring to upgrade to Sony’s PlayStation 5 may have to wait a while longer as a global shortage of computer chips impacts the consumer electronics industry.

Despite Sony forecasting it would sell more than 67 million units by 2024, the company only managed to ship 5 million units in 2020.

Microsoft shipped even fewer consoles, with just 3.9 million units distributed in 2020.

Financial data company Grafa said the global chip shortage is being fuelled by rising silicon prices in combination with chip makers struggling to ramp up production quickly enough to meet demand.

“When the pandemic hit, demand fell and factories paused production.

But with the global economy recovering at lightning speed, these factories can’t ramp up production fast enough to meet the surging demand,” said Grafa co-founder Dan Petrie.

The shortage of computer chips has been compounded by decades-long practices of outsourcing chip making to Asia, resulting in a number of smaller manufacturers.

“This is perhaps a valuable lesson about the risks of outsourcing key components of your core products. These small chip producers were forced to wind down amid the pandemic, but they don’t have the infrastructure to scale up quickly,” said Mr Petrie.

The value of semiconductor chips supplied globally remains elevated at $400 billion annually, according to the World Semiconductor Trade Statistics.

“Stay-at-home orders on a global scale during the Covid-19 pandemic have fueled the gaming console boom with supply struggling to meet demand and the computer chip shortage exacerbating the problem,” Mr Petrie said.

The consumer electronics industry joins the automotive and heavy industries sectors which are also suffering from delays in the manufacture of computer chips.

“Many companies who outsourced chip-making as a low-skilled endeavour will now be rueing their decisions given its critical role in console componentry,” Mr Petrie said.

The rising price of silicon is also exacerbating the problem. The average price of ferrosilicon containing 75% silicon has jumped by almost 20% to $US1.20 per pound, following a broader surge in the price of hard commodities.

Mr Petrie said with buyers lining up to purchase the Playstation 5 there is little Sony can do except bring chip manufacturing in-house.

Grafa is a financial data, news and analysis platform that gives users access to large volumes of information quickly and in a way that’s entertaining and engaging.

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