According to a report on the Inquirer.net Sony is facing problems with the yields of its Cell microprocessor, to such an extent that insiders have described the numbers of "good" dies that are coming off the test wafers as horrible.
Industry insiders are not surprised and agree that any chip, built from the ground up, such as Cell is expected to have a shaky start. IBM, Sony's partner in the Cell, has faced yield issues in the past with its G5 chip but claims to have the expertise to recover. This news however does question Sony's ability to stage a global launch in November 2006 as promised. Sony may have to revise its strategy if it wants to avoid the embarrassing shortages experienced by its rival Microsoft during its XBox 360 launch late last year.
Test runs on new chips rarely produce excellent results but they can serve as indicators of what you can expect during production runs. These issues may be the reason Sony will not have a playable PS3 available during E3 while they may also be behind complaints by developers that they have not yet seen a working unit.
Sony' insistence on using proprietary technologies may be one of the reasons it has faced so many delays with PlayStation 3. The biggest issue facing the new console however is not manufacturing; those problems will be sorted out eventually. Sony's main PS3 headache will be teaching developers how to fully utilize the new architecture.
We expect further news to be revealed during E3 2006 and MegaGames will be there for you.