In a recent article at Electronic News, Ed Sperling interviews Tom Reeves, VP of semiconductor and technology services at IBM, about the latest breakthroughs in chip fabrication technology and where the industry goes from here. Of particular interest to gamers might be Reeves’ statements about the Playstation 3’s much-lauded Cell Processor, which contains eight cores and is one of the most complicated processors ever:

Electronic News: What’s the defining factor that makes some chips better than others?
Reeves: Defects. It becomes a bigger problem the bigger the chip is. With chips that are one-by-one and silicon germanium, we can get yields of 95 percent. With a chip like the Cell processor, you’re lucky to get 10 or 20 percent.

Combine this with other supply issues Sony might run into and you begin to see the reasoning behind the pricing of the PS3.

The article goes on to talk about how there are “a lot” of Cell chips with only 6 cores functioning that may find other uses outside of the PS3. They also note that theoretically, a PS3 Cell processor needs to have only 7 working cores but currently there are no plans by Sony to put 7/8ths working chips in some sort of “bargain” PS3. That’s good news for PS3 buyers - at least for $599 Sony won’t be skimping on chip quality.