Sony to outsource RSX fabrication to TSMC & IBM?

[ROG27]

Check out this slide from Semiconductor Business Meeting of Sony Corp. on Dec. 14, 2005.
http://www.sony.net/SonyInfo/IR/info/Semiconductor/2005/qfhh7c000007vs87.html

Also see this graph for the LSI demand for PS in 2006...
http://www.beyond3d.com/forum/showthread.php?t=25243

NVIDIA suggests in 2006 they'll get over 30 million dollars for the royalty of PS3, excluding the RSX dev fee. If the royalty is 5$, NVIDIA expects over 6 million units are going to be manufactured.

Hmmmmmm....how many months would it take to manufacture that many units?

There is no doubt now in my mind that they are manufacturing PS3 parts as we speak.

But that's only assuming a $5 per chip royalty.

 

[Carl B]

I agree. IMO, It would make most sense for Sony to bring up RSX on Sony's 65 nm. Phase out TSMC and phase in Sony's chips. You have to go through a redesign anyway, and any potential issues delaying 65 nm are hedged by the fact that you are already producing them at 90nm at TSMC.

The move straight to 65nm with TSMC serving for 90nm makes sense; maybe indeed that's what they'll do.

You seem to be under the mistaken impression that just because it's in-house, means it's better / cheaper. There are pros and cons to choosing to produce in-house vs. outsourcing. The particular circumstances at the time will tilt favor to one or another.

Well the larger debate between the pros and cons aside, the fact is that labor costs are a big part of the equation, and it behooves Sony to make the most out of it's fabs and fab staff rather than have them sit idle. Maybe running your own fab isn't always less expensive than outsourcing, but certainly it's less expensive than having idle fab capacity *and* outsourcing.

 

[Joe DeFuria]

Maybe running your own fab isn't always less expensive than outsourcing, but certainly it's less expensive than having idle fab capacity *and* outsourcing.

Sure, for the most part I agree. But you are thinking strictly of manufacturing costs, and not the larger picture.

(Just throwing out a hypothetical here...)

What if Sony had 50% confidence that RSX could roll off their own fabs in time for their launch window, but 95% confidence that outsourcing it to TSMC? In other words, there is likely less risk of time-to-market issues with RSX at TSMC (again, assuming a very similar chip to G7x). What is that "worth?" It may very well be worth even having idle capacity for some period of time. It's all about managing risk....

 

[karlotta]

yes TSMC has a SOI at 90nm. So does IBM.

 

[Carl B]

Sure, for the most part I agree. But you are thinking strictly of manufacturing costs, and not the larger picture.

(Just throwing out a hypothetical here...)

What if Sony had 50% confidence that RSX could roll off their own fabs in time for their launch window, but 95% confidence that outsourcing it to TSMC? In other words, there is likely less risk of time-to-market issues with RSX at TSMC (again, assuming a very similar chip to G7x). What is that "worth?" It may very well be worth even having idle capacity for some period of time. It's all about managing risk....

Well I never disagreed with you on the 'security' aspect of going to TSMC; you're the one that brought cost into it.

(well, rather set it up to be compared to insourcing)

@Karlotta: IBM obviously - I mean they're practically the vanguard for it. But do you have a link with confirmation of TSMC's SOI capacity?

 

[Farid]

I think RSX is in fact *not* SOI. Which is good, because I don't think TSMC has an SOI line either.

Correct and correct, my bad.

 

[croc hunter2]

Its hardly out there that Sony would outsource some production.

If they have prodn capacity of x and need y number of chips, (y>x) then outsourcing is the only way.

I suspect that the TW manufacturers may only be coming online mid-year and therefore they believe that the PS3 is not out till after then. However Sony may have capacity for one region but not for 3 regions. Therefore sony can release in Jp on their own but need prodn for EU/US.

all IMO of course.

 

[Trawler]

I wonder when the decision to outsource was made? Could this have an impact on schedules if the nVidia team taped out using Sony fab libraries?

 

[superguy]

It's amazing how much Xbox one model took over the industry.

Sony now uses:

PC GPU: check

Licensed PC GPU rather than their own custom design: check

Now: Outsourced fabbing to TSMC: check

Aren't they also looking into flextronics-like assemblers for PS3? Also something MS began last gen.

 

[croc hunter2]

Daryl, do u honeslty think that Sony have produced every chip and every PS2 every built?

If so, please remove your head from the sand it is obviously in and smell the real world. Outsourcing is nothing that MS invented in this space.

 

[superguy]

Where did I say they invented it?

The fact is Microsoft's model is taking over. I remember it was a big deal last time around when Sony considered outsourcing some production of the PS2 to a flextronics type. They were merely looking at it, but it was newsworthy. This was right after MS came in and basically built a console with no manufactoring of their own. Sony had to raise an eyebrow and begin examining their methods.

This time it doesn't seem to be a big deal that Sony is outsourcing more and more with the same plants MS has been using all along.

There is no need to take offense that gasp, sometimes MS makes good decisions. I know it's shocking to be possible apparantly.

I just dont know that, owning billions in fabs is really a good business move anymore.

 

[Brimstone]

I don't think they are necessarily outsourcing everything for RSX production, just outsourcing added capacity to ramp up for launch. The article is a little vague and overly clear on some points (for example it says Sony "will" postpone into August, when "earlier" reports said no such thing--the company spokesperson said they "may" postpone not will, and only if (according to spokeswoman who I also take with a grain of salt) that they can't nail down BRD and HDMI specs.

Btw, off topic for a sec: does anyone have any clue what the stupid hold-up is with locking down the HDMI standard and why that's even an issue/what the fight is about? And what the status/timing is on that front?

The major problem is that a company can only build as many units as their weakest link in the supply chain allows. XB360 production was bottlenecked by not having enough GDDR-3 memory. The PS3 has a greater potential bottle neck in the optical drive compared to the XB360. DVD drive technology and it's supply chain is very mature.

 

[leechan25]

I think this is a good thing until Sony gets pass the consoles launch. Their try to gear up for rapid production. Atfer that, I think they will just use their own fabs.

 

[OtakingGX]

Microsoft, at its core, is not a hardware production company. It's not that they want to change the way things are done, it's that they can't assemble Xboxes on their own. Sony is, and has been, a hardware company. They fabricate things and put them together, then sell them. It was only natural to produce the PS2 themselves.

Microsoft's model is cheaper, because you can move production and assembly to countries where wages are cheap. However, I'm not sure they should be praised for this. While they are bringing jobs to impoverished people, they're also exploiting near-sweatshop style labor in order to cut costs.

The way I see Sony doing things is producing PS3 in every factory they can to meet their launch. Then they'll bring more work in-house in order to refine the manufacturing process, then start shipping it out to other countries to drive the cost down. They'd probably still keep some manufacturing at home so they can ramp up production in case of a surge in sales, say, right around the holidays each year.

 

[onanie]

There is no need to take offense that gasp, sometimes MS makes good decisions. I know it's shocking to be possible apparantly.

I just dont know that, owning billions in fabs is really a good business move anymore.

Gasp, I guess all should be selling their in-house fabs now. What were they thinking, internally assured reliability and production capacity, not to mention margin savings? Hell no.

Hmm, i think the problem is not in owning fabs. Perhaps it is not owning enough, and as it is often the case, there is never enough

 

[croc hunter2]

Daryl, you realise this fantastic model that MS "invented" they have abandoned.

Custom designed non-PC GPU with EDRAM

Custom designed non-PC CPU

MS also didn't licence the GPU in the XBOX they had to BUY it. Sony merely pay NVIDIA a royalty and can produce it any way they want by anyone they want.

These companies do what they think is correct at the time. Xbox was a rush and basically a PC, that was somewhat dictated by the timeline. for the X360 they had more time, therefore a totally different outcome.

Outsourcing has its problems too, ie you have less control over cost reduction, see MS's problems with reductions in cost on the Xbox.

Seriously none of these companies are infallible and all decisions have a huge number of reasons and produce problems. The decisions are often taken on what decision produces the least problems rather than the best decision.

 

[superguy]

Daryl, you realise this fantastic model that MS "invented" they have abandoned.

Custom designed non-PC GPU with EDRAM

Custom designed non-PC CPU

MS also didn't licence the GPU in the XBOX they had to BUY it. Sony merely pay NVIDIA a royalty and can produce it any way they want by anyone they want.

These companies do what they think is correct at the time. Xbox was a rush and basically a PC, that was somewhat dictated by the timeline. for the X360 they had more time, therefore a totally different outcome.

Outsourcing has its problems too, ie you have less control over cost reduction, see MS's problems with reductions in cost on the Xbox.

Seriously none of these companies are infallible and all decisions have a huge number of reasons and produce problems. The decisions are often taken on what decision produces the least problems rather than the best decision.

Ms did change a lot of things from Xbox and it was a rush job. But the bigger decisions are now the norm in the console industry.

Sony does not design it's own GPU now. They go get one from a PC maker. Just like MS started. That's like half the system.

Sure MS did a custom job but that's neither here nor there. It's more that they use ATI and Nvidia that's the biggie.

But personally, I wonder if Sony could scrap all their fabs with no repercussions, if they wouldn't do it? I tend to think the idea would be appealing to them, though they'd never admit it.

I doubt Sony is ever going to manufactore things as cheap as Taiwain and China does. Unless they build there. Even then I wonder if the investment is worth probably dwindling savings over what TSMC, and dedicated fabs, can do for you.

 

[croc hunter2]

dp*

 

[superguy]

And which next-gen console is currently thought to have a significant cost to produce edge at this time?

The one built by a company with no manufactoring of it's own.

Sure, there are unrelated reasons for that. But it says a lot.

 

[scificube]

By who's numbers?