AMD’s CEO has stated that production will still experience “some tightness” for the first six months of 2021, undoubtedly affecting production of the PlayStation 5 and Xbox Series X|S.
VGC report that during AMD’s fourth-quarter earnings call on January 26th, CEO Lisa Su stated that while demand exceeded their plans. While the first six months of 2020 would see “some tightness,” this should be resolved in the second half of the year.
“So certainly, when I look at the semiconductor environment in 2020 it was very strong. So, we saw a strong revenue ramp in our business as well as across some of our peers. It’s fair to say that the overall demand exceeded our planning and as a result, we did have some supply constraints as we ended the year. Those were primarily, I would say, in the PC market, the low end of the PC market and in the gaming markets.”
“That being said, I think we’re getting great support from our manufacturing partners. The industry does need to increase the overall capacity levels and so we do see some tightness through the first half of the year, but there is added capacity in the second half.”
Both the PlayStation 5 and Xbox Series X utilize AMD Zen 2 CPU, and AMD RDNA 2 architecture for the GPU. The increase in demand is due to a multitude of factors. Firstly, the new console generation of the PlayStation 5 and Xbox Series X|S would typically cause a large demand on launch for early adopters.
However, with the COVID-19 coronavirus lockdown orders across most of the world for 2020; hindering nearly all parts of the production, shipping, and distribution chain. In addition to this, more people turned to gaming as they were indoors, increasing demand for those new consoles.
It was due to this and other factors that the video games industry has reportedly had its best March sales since 2008 in 2020. However, it should be noted that the Nintendo Switch seems to have fared best in 2020, thanks to being on the market for longer, and lower price. It has been the best selling console in the US for 24 consecutive months, including the month of the PlayStation 5 and Xbox Series X|S launch.
Nonetheless, the lack of availability for both next-gen consoles have resulted in stores selling out within mere minutes, and scalpers running riot. The most public of these production woes has been with the PlayStation 5, thanks to anonymous sources speaking to Bloomberg.
Bloomberg had previously reported that Sony were allegedly taking a “wait-and-see“ approach to the PlayStation 5’s pricing, seemingly motivated by their struggle to find parts and a limited production.
These was seemingly alleviated for a time, with Bloomberg later reporting that PlayStation 5 production had reportedly doubled to 10 million. As aforementioned, the alleged reason for this was due to the increased demand for gaming due to lockdown orders.
In September 2020, Bloomberg once again reported from “people familiar with the matter” that Sony’s estimated PlayStation 5 production in this fiscal year was reduced by 4 million, to around 11 million in total.
The reason for that was allegedly manufacturing issues yet again, such as production of SOC (System on a Chip) being only 50% of expectations. Sony Interactive Entertainment would later issue a statement on the rumor, flatly denying the current and prior reports by Bloomberg.