RSSSony May Pull Out of Cell CPU Production for PS3
By Scott M. Fulton, III | Published February 13, 2007, 11:56 AM
One of Sony's senior executives, Executive Deputy President Yutaka Nakagawa, is quoted by several US and Asian press sources as saying that, in the interest of finding cost savings, his company is considering exiting the production end of the Cell processor business. Cell processors are produced by an alliance between Sony, IBM, and Toshiba.
Nakagawa was apparently cornered by reporters after he blamed Cell processor production costs for a 5% decline in quarterly profits for Sony's semiconductor division. Cell processors are currently fabricated using 90 nm lithography, and while plans have been in the works to move the chip to 65 nm, IBM is gearing to retool many of its operations for 45 nm, as part of its other partnership with x86 CPU producer AMD. IBM will have one of only two chip foundries capable of producing silicon-on-insulator (SOI) components such as Cell at the 45 nm level (the other is owned by Chartered Semiconductor), and IBM has already signaled its intention to use that foundry for 45 nm production as soon as next year.
Apparently, when asked whether Sony is prepared to shoulder some of the burden of one, if not two, fabrication transitions over the next twelve months, Nakagawa indicated no.
Since the beginning of the PlayStation 3 project, Sony has intended the console to be the showcase for the Cell processor, an innovative design that already utilizes many of the pipelining and network-on-a-chip approaches that AMD and Intel, respectively, are just now investigating.
Semiconductor Fabtech this morning predicts that Nakagawa's comments are a clue that Sony is considering adopting what's called the fabless model, referring to the approach taken by semiconductor design companies such as nVidia, Texas Instruments, and Broadcom. These companies no longer produce any of their own ASIC designs, instead contracting with other producers who may have already developed the right tools for the job.
This certainly saves the designer tens of millions in up-front production costs. But analysts in recent years believe the only good that may come from adoption of the modern fabless model may be in deferring costs until later, when the designer picks up the tab for someone else's work.
The world's largest producer of ASIC processors for firms that outsource production is Taiwan Semiconductor Manufacturing Corporation. But they may not be available for something as intricate and as susceptible to production errors as Cell, especially since it's an SOI design (as are x86 CPUs) and TSMC does not currently have any SOI customers, according to Semiconductor Fabtech.
So if Sony's going to be doing any outsourcing, IBM is the most likely candidate. IBM was already planning on shouldering some of the costs for Cell, and reaping some of the profits as well. If Sony decides to outsource to IBM, that company will be forced to take on more of the up-front burden. But it also has to come up with a business model that allows it to recoup those costs from Sony later. Normally, recoups come with a surplus, though that's probably not what Sony has in mind.
On the other hand, with few other customers for the Cell processor besides Sony (Mercury Computer Systems, a producer of servers and application-specific systems for hospitals, perhaps being the most prominent), IBM could object to this idea. Raising the costs for Cell might raise them in turn for Cell's few faithful clients, some of whom may re-examine their reasons for not going with Opteron or Xeon. In which case, Sony may find itself in even deeper trouble, and one of the most technologically impressive CPU designs in history may be endangered.
most of u will not even like me bringing up the whole ps3 vs. 360 thing up but here it is.
u fanboys that bleed sony, will u please tell me exactly what is "innovative" about the ps3? nothing.
the ps2 was a low grade crap console with 2 controller ports the same controller as ps1 and memory cards with low processing power.
now sony tried to outdue microsoft and indeed themselves.
every single feature that sony claims is so great was already innovated by microsoft a year ago. i will just name a few. these are features on both consoles and u answer me who made them first.
hard drive-MS
wireless controllers as a standard-MS
usb for controller connection and multimedia-MS
recharge cable for controller-MS(and 360 one is twice as long)
wireless turn on-MS
wireless internet connection-MS
more than 2 controller-MS
there are tons more if u want to do some research.
punchline: history has shown the japenese arnt good at comming up with new ideas they are simply better at taking others ideas and making them better. aka the ps3. too bad for them this time doesnt seem to be working
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|Whilst Betanews may be implying this is bad Sony press, the stock market thinks otherwise..
http://www.bloomberg.com...ZXI2hOk&refer=japan
Japanese Stocks Rise; Sony Reaches Highest in More Than 4 Years
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|I've said this all along: Sony tried too hard on the PS3. We consumers do not need a super awesomely 3-D 7 core bio-nucleophysic processor cybloid--we just needed an up-to-date cutting-edge game console.
They developed a console for the future without the technology to produce it now...
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|"Pull out?" It's curious that Betanews would apply a phrase commonly reserved to military deployments to Sony's production line.
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|The pull out method is not a form of contraceptive.
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|Sorry, but I don't find anything curious about it: Sony produces the Cell processor as part of the STI alliance. If it ceases production, it pulls itself out of the alliance. That's a pullout.
-SF3
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|Geez, why must everything be turned into a political debate?
I say Betanews should split into politechalnews.com and betanews.com--one site for all the BS political issues regarding technology and the other for normal geek-speaking.
I'm only kidding of course, but really, I seriously doubt Scott was trying to cause controversy over the Iraq war in choosing the words for the title of the article...
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|Then there was that Far-Side Comic thing about the two misquito's--"Pull out, Betty! Pull out! You've hit an artery!"
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|Franky I am surprised that Sony ever felt that they would have the economy of scale necessary to justify assuming all of the manufacturing costs!
It simply demonstrates that their forecasting is WAY off the mark!
And as there is little or no market for the chip outside of Sony's use, there is little incentive for IBM to waste time and resources on it.
This is exactly what happened with Apple and the PowerPC - a chip that IBM had no other use for - and it was an OLD design for which the fab and design costs had long since been recouped!
But there was no significant incentive for IBM to allocate additional resources to further the design for a more energy efficient design of the G5 for laptop use! It was already an old and marginal product.
There is ample precedence for this and it is illustrated by the decision of Apple to switch to a commoditized and readily available x86 platform!
Technological whiz bang is nice, but in business, economic realities rule!
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|I did read a report a while back, Sony are consuming a large percentage of Cell allocations, and until production ramps further, there is not alot for any other mass production.
I also read that the next gen Toshiba HD-DVD players will be cell based (if the format lasts that long).
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|"Frank*l*y I am surprised that Sony ever felt that they would have the economy of scale necessary to justify assuming all of the manufacturing costs!
It simply demonstrates that their forecasting is WAY off the mark!"
This being your conclusion from your years of research.
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|What's that? Do I hear the margin on the PS3 inverting even further? What a quagmire.
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|Shhh, don't point out the obvious. Sony fanboys are a-lurkin' and just waiting to cry foul for your biased comment, however truthful it may be.
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|I'm confused, does this mean Sony is already planning on re-designing the PS3?
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|No, it means they wouldn't make the processors themselves, instead buying them from IBM or someone else who would continue to make the processor.
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|From what it sounds like, Sony will still USE the Cell processor in the PS3, but they will no longer PRODUCE the chip in any of their factories. They'll outsource that job to either IBM or Toshiba most likely.
Redesigning the PS3 around a different processor now would be suicide for Sony.
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|It means Sony concetrating on what they do best, CPU manufacture is not one of them. This is good news, despite Betanews spin on it.
It means buying Cells of IBM, which they do currently anyway...
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|Thanks for clarification, they should have done this before the blue diode shortages...
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|How would this be suicide?
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|We should note that Sony is getting a good price on these processors right now, because they did burden some of the upfront costs. This article is simply pointing out that the price of Cell processors will most likely go up for Sony in the future. IBM will want to recoup the extra costs which Sony is "pulling out of" and probably some extra on top of that. Therefore this will add to the overall cost of the PS3. I don't see how this is good news. Sony are in a deep hole and they're trying to cut costs wherever they can. However, this may backfire in the end.
"It means Sony concetrating on what they do best"
I'd love to hear what that is. Is it the production of electronics lacking in features, sold at a premium price? Or is it lying to their customers until no one believes them anymore? Wait no, it's manufacturing exploding batteries and attaching rootkits to their audio CDs, isn't it?
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|"I'd love to hear what that is. Is it the production of electronics lacking in features, sold at a premium price? Or is it lying to their customers until no one believes them anymore? Wait no, it's manufacturing exploding batteries and attaching rootkits to their audio CDs, isn't it?"
Exactly!!! I agree 150%.
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|Whilst you may believe the current Sony bashing that seems to occur on most sites, only to get site visitors, no other reason.
The reality is however, Sony do make quality products. The PS3 is a high spec, and reliable piece of kit, as is most other Sony kit.
If you want to talk junk, then talk about red rings of death and 30% failure rates of the Xbox360. Microsoft are the bad guys, Microsoft INVENTED the term Anti-Trust!!!
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|Ummm... Where were you during the past year of PS3 delays?
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|Hehe
"The PS3 is a high spec, and reliable piece of sh!t"
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|This is typical Sony fanboy attitude. Always trying to deflect everything onto Microsoft. Where in my comment did I mention the name Microsoft or the Xbox360? I didn't. You point out all the Sony bashing, then proceed to bash Microsoft. A bit of a double standard there. You may look at my comment as "Sony bashing" if you wish, but I did not state anything that isn't true.
Fact: Sony products usually lack in features compared to products from other companies.
Fact: You pay a premium for the Sony name (and I never said their products were low quality).
Fact: Sony lied to their customers on multiple occasions. About release dates and about units to be shipped.
Fact: Sony never apologizes for their lies or mistakes. They pretend it never happened, then conjure up new numbers and feed it to the public.
Fact: The PS3 may be high spec and reliable (*laugh*), but it is too expensive for the console market. Going above $299 USD is really pushing your luck. Anyone remember the 3DO?
Fact: Sony will end up paying a higher price for their Cell processors, since IBM will have leverage, being the only manufacturer.
Fact: Sony did manufacture exploding batteries. Everyone knows this.
Fact: Sony did put malicious software (rootkit) on their audio CDs. They were sued in multiple states and in Canada because of it, and lost.
Next time you decide to open your mouth, it's going to have to be better than Sony = good, Microsoft = evil. If it weren't for Microsoft (and partly by Nintendo), Sony would still be putting only 2 controller ports on their consoles and then sell you a 4 player adapter for $50 a pop. If it were up to Sony, everything would be extra (ethernet, hard drive, etc.)
I don't own a PS3 and I don't own an Xbox360. I don't consider myself a Microsoft supporter. In fact, the number of Sony products I own probably outnumber the number of Microsoft products I own 3:1 or higher. While you may think Microsoft "are the bad guys", they're a necessary "evil" in our economy. Love it or hate it, they do provide a lot of competition in whichever market they decide to enter.
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|Well said!
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