Sony has reduced its outlook down to 18 million units of the PlayStation 5 this fiscal year from its prior projection of 23 million, which is a major downgrade. In this Motley Fool Live segment from "The Virtual Opportunities Show," recorded on May 10, Fool.com contributors Demitri Kalogeropoulos, Jose Najarro, and Travis Hoium take a look at how the ongoing semiconductor shortage is affecting the supply of popular video game consoles like the PlayStation 5.
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Demitri Kalogeropoulos: The headline is Sony-Nintendo video gaming machines to be in short supply again this year and basically, it's just talking about how, particularly the PlayStation 5, which has been famously impossible to get a hold of for a lot of people through the entire pandemic basically from 2020 on and now still the case too with Nintendo's consoles. This article quotes Nintendo's President saying there's no end in sight to the semiconductor shortage at this point and then Sony's CFO, they quote here saying basically the same thing when they reduced their outlook down to 18 million units of the PlayStation this fiscal year from their prior projection of 23 million, which is a big downgrade there and it was completely because of supply they're selling every single unit they can make. I thought this was interesting obviously for the video game world, but it should make a difference in a lot of these tech industries. I was surprised I was in Costco recently and I saw a lot of good-looking laptops and stuff, right when you walk in there, some on sale. It doesn't seem to be impacting, I guess the PC world just now, but I guess it could be. This seems like a pretty persistent challenge.
Jose Najarro: This is a market I follow a lot. Intel CEO mentioned, I think a week or two weeks ago in a CNBC meeting that, he believes that shortage is going to be impactful to at least 2024. The main reason is, it's not the manufacturers, is actually the equipment that they need right now is huge backlog for it. I think I mentioned that here about a few weeks ago that ASML, a company that provides equipment for the manufacturing process, at the moment, with their full capacity, they can only meet up 60 percent of demand. For this year, they still have 40 percent on backlog that they won't be able to meet, and that's just going to be pushed on for the next year, and then that's counting the kind of purchases they're also going to get next year. Definitely a pretty interesting time for the semiconductor industry right now.
Travis Hoium: The shortages are not going to be evenly spread either. Apple is not having any issues because they're first in line with TSMC. That's what I think threw the automakers for a loop, because they didn't realize they were last in line. [laughs] They were fine with that for decades but it became a bigger problem during the pandemic. Yeah, it's going to be this weird space where there's going to be shortages. How big are the shortages? Who did they affect? It's not going be evenly spread everywhere.