PlayStation 5’s Thriving Sales Have Made Sony AMD’s Largest Buyer

Gaming was the semiconductor company's biggest department in 2022.

Story Highlights

  • Sony made up 16% of AMD’s revenue in 2022 amid rising PlayStation 5 sales.
  • This figure goes up to 20% for classic AMD, the one without the semiconductor company Xilinx.
  • Last year Sony made up 14% of the company’s revenue, meaning we saw an increase in 2022.

As per semiconductor analyst Sravan Kundojjala, Sony accounted for 16% of AMD‘s revenue in 2022. The image shared by the analyst goes on to say how these sales belong to AMD’s gaming sector.

In addition, the report also says a loss of this customer would have a “material adverse effect” on AMD’s business, resulting in huge consequences.

Furthermore, Kundojjala says that if the results of Xilinx are excluded, Sony makes up 20% of AMD’s revenue. Hence, this probably makes Sony the largest buyer of the semiconductor giant. Sony’s part in AMD’s revenue also went up compared to last year, hinting at the increase in PlayStation 5 sales.

2023 is shaping up to be a big year for the PlayStation 5. After more than 2 years of supply issues, Sony announced that this problem would no longer affect the console. Anyone who wants to buy a PS5 will get it, and the effect is already apparent in Japan.

The 2020 console has already sold over 31 million units and ruled the Christmas period in 2022. It has also left the Xbox Series behind, which has only sold 18 million units compared to the PS5. With Sony increasing the sales forecast of the PlayStation 5 for this quarter, these numbers will only go up.

Many factors like the coronavirus pandemic and supply chain issues caused the shortage previously. But, probably the biggest reason for slow PlayStation 5 production in the years before was the semiconductor chip shortage. This worry has recently been alleviated and Sony’s business with semiconductor supplier AMD backs it up.

As a consequence of PS5 sales going up and the chip shortage ending, Sony accounted for 16% of AMD’s revenue in 2022. The company also acknowledged it saying that losing this customer would result in adverse material effects. In addition, Tom’s Hardware also added how Sony’s percentage in AMD’s revenue has grown from last year.

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In 2021, the Japanese company accounted for 14% of AMD’s revenue, meaning we saw a 2% increase this year. This further reflects Sony’s increased ability to meet the rocketing PlayStation 5 demand because of intangibles like the chip shortage no longer being a worry. Xilinx is another semiconductor company that is a port of AMD now.

According to Sravan Kundojjala, if you remove Xilinx’s part of the revenue, Sony accounts for 20% of classic AMD’s profit. Hence, the Japanese giant is buying chips in heap from the American supplier. The gaming sector was AMD’s largest revenue driver, further backing this up.

Sony bought chips for a staggering $3.776 billion to make PlayStation 5 units in 2022. When you consider how AMD’s gaming business in total earned $6.805 billion in 2022, this is a hefty sum. But, the PS5 is nearing 32 million units sold worldwide, so it has been a worthy investment.

Lisa Su, the chief executive of AMD also said the Semi-custom SoC revenue went up in 2023 due to demand for game consoles.

The chief executive said the console demand was strong during the holiday season resulting in a year-on-year increase, as per the SeekingAlpha report. However, the sales of gaming graphics cards declined year-on-year and AMD is reducing GPU downstream channel inventory.

Semi-custom SoC revenue grew year-over-year as demand for game consoles remained strong during the holidays. Gaming graphics revenue declined year-over-year as we further reduced desktop GPU downstream channel inventory.” 

AMD supplies chips to both Xbox and Sony, meaning the Xbox Series consoles are also doing well. It will be interesting to see how this pans out in 2023, especially with the PC market not performing up to AMD’s expectations.

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Sravan Kundojjala

Ahmed Mansoor is a News Writer who has a deep passion for single-player adventure games. He loves to keep tabs on the gaming and technology industries and loves to break stories that interest his audience. He has a Bachelor’s Degree in Journalism and several years of experience writing for games. Experience: 3+ Years || Education: Bachelor's in Journalism || Written 600+ News Stories.

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