400 K ps3 in USA, 100 K ps3 in Japan at launch

[liolio]

I agree with that London boy, what's wrong is the way Sony present the things at this time, but but they 're likely to correct this.
But it's easier to shift opinion than improve yelds.. a miracle will not happen the 11 and 17 november as far as diode yelds are concerned.
I expect improvement but come on 500K, sony can so easily produce that they don't start production to avoid stock cost they 're badly supply limited.
i don't expect (i fact nobody in his right should) that sony witch will have 500k diodes in end october(more than one month of production), will be able to produce 1 millions/month.
They're working on it no doubt but there is no miracle.

 

[avaya]

According to this Nikkei article
http://itpro.nikkeibp.co.jp/article/NEWS/20060906/247387/?ST=newtech&P=1
the manufacturing of blue-laser diodes was commited to Sony Shiroishi Semiconductor, one of child companies of Sony the parent company. Test production and test mass production were without troubles but apparently in July it was discovered that some reactors had good yield while others didn't. They could fix the optimal parameters for each reactor recently so it incurred approximately one-month delay.

Ahhh, so if this is indeed the blunt truth then I'd be inclined to believe their 6mn by fiscal 2007 target.

GDDR3 could again be the issue but I think that was a hick-up in the market last time out for the 360.

Thank you one for the great insight!

I still don't understand the European delay though. It would surely have been better to get units out in the region and establish that PS3 is actually here, but I can't help but feel that they think Europe is a lock for Sony dominance again so they are taking it easy. They must be very confident of PS2(Eyetoy/Singstar) vs. Wii if that's the case.

 

[expletive]

Not by any stretch. It all depends on what the hold-up is and how they overcome it. One's reporting (many thanks!) gives us an explanation and a solution, and how they're solving it. If right, they will recover to be on track for targets.

All these companies predict (like analysts, and the rest of us) by looking at the resources available. When determining how many PS3's they could make, they look at how fast their chip production is, on Cell and RSX and other components, and look at their Blue laser diode plants, sometimes months before these fabs are even running by considering paper specs, and work out how many PS3's they expect to be able to make. That's where the figures come from. Then an unexpected (but pretty much inevitable) problem arises, and the estimation goes south. It can't be any other way. You can't predict the future, only hazard a guess. There's plenty of scope for conspiracy theories, but for me they tend to come from people with an oversimplified view of how to make a complex device. It's not easy. The fact these things ever get designed and built at all is something of a small miracle if you consider every little process from harvesting resources like oil and minerals, to producing final chips and plastics and bringing it all together. What people consider to be easy is the work of centuries building up know-how and technology, which many a fumble along the way, giving us a lot of mature processes with all the problems worked out, and a number of new processes with quirks not yet encountered. I think people take the old processes for granted and forget (or never knew) how much work went in to get those things right, and so expect new processes to be just as effective.

The concern now is whether Sony's fix works, or whether their estimates are going to be knocked by another issue they hadn't factored in.

Is your point that theres no way they only have 2 million by end of march, or that if they DO have 2 million by end of march there's no way they'll only have 11 million by late 2007?

If they seriously only have 2 million by the end of March, and they hit maximum capacity immediately thereafter, it puts them at about 12-13 million in time time for the 2007 holiday season. Though i'm not 100% confident in the news one posted, it would seem that 2 million in March is not possible anyway.

 

[London Geezer]

They must be very confident of PS2(Eyetoy/Singstar) vs. Wii if that's the case.

They're probably confident of the fact that 360 won't get GTA until way after PS3 is released, and they're confident of lots of other things, one of which being that PS2 is still outselling the 360 here despite there being no supply issues with the 360.

I hate it when companies take advantage of their dominant position to mess around, cause in the end it's the customers that "suffer".

 

[avaya]

They're probably confident of the fact that 360 won't get GTA until way after PS3 is released, and they're confident of lots of other things, one of which being that PS2 is still outselling the 360 here despite there being no supply issues with the 360.

I hate it when companies take advantage of their dominant position to mess around, cause in the end it's the customers that "suffer".

Dominance breeds complacency and arrogance. It's just a natural result, 360 outside of the UK is doing very badly in Europe, that's why I didn't include it in my thoughts of Sony's strategy for the region.

I do think they've missed a trick with Blu-Ray here as well. I was checking out some early movie prices in the UK and most were in £10-15 range. That's great pricing, they could really have jump started Blu-Ray with PS3 this Christmas here, BDA must be gutted.

 

[SPM]

It is good to get confirmation that the diode company itself is a Sony comapany. And so the supply shortage is just an internal problem and not due to other vendors.

I was bit concerned initially that the diode shortage was due to Toshiba/Microsoft/etc buying up all the parts from the diode manufacturers causing a supply shortage. But this clears that up.

Overall I expect the impact of this delay to be small. It is unfortunate to only launch with 500k units. But then this is still roughly par for the course.

The other blu laser diode manufacturer(s) are also having problems with yields apparently, not just Sony. http://www.digitimes.com/systems/a20060828PR206.html

Nichia, which currently holds 80% of the global blue laser diode supply, reported that its yield rate for blue laser diodes reached 30%, according to the makers.

Sony was probably intending to buy in blue lasers as well as producing it's own, since for cost and flexibility reasons that is the way manufacture of electronic components is normally undertaken.

 

[Jawed]

So it seems that with the ~8 week shipment time to Europe it was simply not possible to get 700,000 of them here for a mid-November launch, if they started production at the end of September.

Having bitten that unfortunate bullet, Sony decided simply to push PS3 back to March. The European launch could have been early January (from the logistics point of view), but presumably they decided that immediately after Christmas is not going to make a splash. So just in time for Easter (holidays) makes more sense.

That all seems to make sense to me. In theory I guess the US gets ~ as many PS3s before Christmas as it was originally going to get.

What is a bit puzzling is the idea that RSX yields are "good" yet its clocks are coming down... Hmm. (Obviously one could argue that yields are good because the clocks are down.)

Jawed

 

[Geo]

What is a bit puzzling is the idea that RSX yields are "good" yet its clocks are coming down... Hmm. (Obviously one could argue that yields are good because the clocks are down.)

Some of us are leaning power/heat there for the entire box.

 

[Geo]

A lot of good stuff. . . .

Hey, nice. Thanks. So they expect to go 1.2M/month instead, believe the diode situation is already addressed, aren't air shipping to Europe at all, and doubling (roughly) the Euro initial launch amount vs NA.

Well, that doesn't look too incredible; fingers crossed it holds together this time. :smile: I'm still thinking they aren't going to make their 6M by March, but things may not be quite as bad as I was thinking in the mid-term. Still think the NA launch is at risk of moving back a few weeks, as it appears all the safety room has already been sucked up, and they haven't got any margin for a problem in assembly ramping.

Edit: And probably the diode situation is still a bit of a wild-card. Having discovered the problem in July, and fixed it "recently". . . well, it wouldn't appear to me that they've proved the "fix" works yet. Probably it will, as they apparently have one good line to use as a model, but BRD has been enough of a pain in the butt to not be confident about it until its proven to be fixed, and it doesn't appear they've had time to get to that point yet. I'm thinking of R520 as an example of "oh yeah, it'll be alright this time". This stuff ain't easy and 100% reliably predictable, or everybody would do it.

 

[Arwin]

The new big marketing cheese talks to IGN here:

http://ps3.ign.com/articles/731/731032p1.html

 

[Shifty Geezer]

Is your point that theres no way they only have 2 million by end of march, or that if they DO have 2 million by end of march there's no way they'll only have 11 million by late 2007?

Neither. I was saying that these initial yields aren't any forecast for the future. Heck, by the 8th million PS3 perhaps all those willing to pay top dollar will have been sold to and sales drop off regardless of manufacturing ability!

 

[Shifty Geezer]

But it's easier to shift opinion than improve yelds.. a miracle will not happen the 11 and 17 november as far as diode yelds are concerned.

It doesn't necessarily need a miracle - only some tweaking of the settings. As an example, the yields of gallium nitride the crystals are dependent on a manufacturing process that uses a gas flow. If that gas flow isn't perfect, yields drop rapidly. To fix a non-working process, you may find small adjustment is all that's needed.

It's ridiculous for anyone not involved in the diode industry or with substantial insight to guess what the problem is and how much effort it will be to overcome. It's a bug-fix, and sometimes the delays for bugs come in finding the problem. Once found, sometimes it's a trivial matter to fix. And of course sometimes the problem is mammoth and requires a total reengineering. The only people who do know are Sony, and whether they're telling the truth or not (professional coverups aren't unheard of) we've only got their word. Unless there's a laser diode expert on this forum who hasn't cared to comment yet!

 

[DUALDISASTER]

I do see why Sony has made this decidion...There are more people in the USA than Japan. Also, they see Americans are easily swayed, they just can't lose to Microsoft...so the 400,000/USA 100,000/Japan didn't shock me. They've gambled Europe because of their loyalty it seem....sigh this is making me nervous, but as long as they keep shipping units on the week launch numbers shouldn't matter much and will create a larger demand. To me, Wii doesn't play a factor strictly because i don't see it as a competitor for next gen. It seems mostly like a party tool rather than a game console so i hope nintendo doesn't expect the same frenzy as the DS. Two different markets...two different markets.

 

[PatrickL]

I am not a console gamer usually but I wonder why people talk about loyalty to a console builder ? As I am not a huge movie buyer I may buy a Wii for the sake of the novelty and if the price is right, but as an european consumer it is all the loyalty a company can expect....

 

[Angelcurio]

If they are going to meet their 6 million units target for march 2007, then Sony is really going to concentrate their consoles in the two markets were they have more competition.

Prior the delay, an equitative distribution (highly unlikely though) would have been 2 millions for europe, 2 millions for USA, and 2 millions for japan. Now with europe out of the question, and the 6 million mark still on place, then sony would have 6 million units for just two markets, one of them were microsoft is strong and the other one were nintendo is also going to go strong.

I dont really think that the logistic problems were the only cause of the europe delay in that case.

Another thing is that by delaying ps3 production by a month and Kutaragi just mentioning that they could start 65nm in january 2007, it would make sense to produce as little as possible of the most expensive consoles, and start full production when cheaper parts are available (in thsi case january). In that regard Sony would lose less money in their cell and rsx chips as well as having more chips per waffer.

 

[patsu]

What i find quite funny is that in the outside world - the non-geek world - this delay will probably make the PS3 look even more futuristic and high-tech and technically unbelievably awesome, simply because people will think that it's SOOO ahead of its time that Sony can't even make them yet, cause they're just soooo advanced. Which in a sense it is, but the super-duper hype surroinding the power of the PS3 will probably go up now, even if kids won't be too happy with the wait...

LOL. Are you saying Sony should build a theme park or paid tour around their Blu-ray manufacturing facilities ?

Seriously though, I hope there are no other major snags. They tried 2 production runs and they turned out ok, so that's what fooled Sony. The 4 months European delay, besides the 2-month shipping time, should also include building up sufficient quantity for the US soil to meet their numbers, plus time buffer (e.g., for people to come back from holidays). They would want to be safe and fast at the same time.

If the PR guy continues to give us good production update, that will calm more people down. If Sony keep quiet, some will have more bad thoughts. But one's report does put away some of my more unpleasant predictions.

I believe in: What doesn't kill you makes you stronger. Sony is getting to the starting line. Very soon, MS and Nintendo will show hand too. It's exciting times for gamers and Christmas. I wish I can hire Arnold in Kindergarten Cop to reserve some PS3s and Wiis for me.

 

[Geo]

Still doesn't really explain the 4 months delay for Europe...

Well, one month for the lost production. One month for sea shipping vs air for the entirety of the European allotment. Two weeks for 1M at launch vs 500k for NA/Japan. So 2.5 months. Where did the other 1.5 months go? Umm, err, I did mention I'm still not on board with 6M by March, right? :smile: Tho they mention another 1.5M at sea in March, so maybe that'll be their claim. Yes, "Shipped! Literally!".

 

[Sethamin]

Am I the only one who thinks the whole "blue diode" thing is BS? Not that there isn't a shortage, but that even if it wasn't that, it would just be something else. In other words, they're just not ready in general, not that some specific componant is constraining them.

Consider that Sony claimed Blu-Ray delayed the March 2006 launch, but I think any rational person would realize that there was absolutely no way that launch could ever have happened, Blu-Ray or not. Games were clearly not done yet, the controller wasn't finalized, the SKUs and pricing weren't even announced - I mean, nothing at all points at the fact that March 2006 had a snowball's chance in hell of being pulled off. It just seems to be a nice convenient scapegoat to keep blaming Blu-Ray rather than just say that they don't have their shit together yet.

I mean, obviously 360 had shortages, but even they had started manufacturing at this point last year. If Sony was actually ready but just supply constrained, shouldn't they at least have started manufacturing with the diodes they have stockpiled? It doesn't make sense otherwise.

 

[London Geezer]

Well, one month for the lost production. One month for sea shipping vs air for the entirety of the European allotment. Two weeks for 1M at launch vs 500k for NA/Japan. So 2.5 months. Where did the other 1.5 months go? Umm, err, I did mention I'm still not on board with 6M by March, right? :smile: Tho they mention another 1.5M at sea in March, so maybe that'll be their claim. Yes, "Shipped! Literally!".

Well i guess it takes a month or so to put a different plug on the Euro PS3s. Oh and get the consoles right to the shops on horse-trailed carriages, with all these narrow roads and kids running around, won't be easy...

 

[patsu]

Heh heh, you do have to wait for the goods to distribute throughout Europe, and set up on the shelves ? There are other logistics like setting up the demo units, getting people positioned, etc. etc. Not sure if they need extra time for clearing at the customs (probably not these days).

Does the 1 month shipping time include those parts ? A good project manager will have to break down the process into much finer grain than what we have here.