When the Playstation 3 came out in 2006, one of the reasons it was so expensive at its launch was due to its processor. Sony created its own Cell chip for the PS3 which was very powerful for its time. Indeed, Sony had plans to offer its Cell processor for use inside other hardware products and applications.
In the end, the Cell architecture never caught on much beyond the PS3. Now Kotaku is reporting via unnamed "gaming industry sources" that Sony won't be using the Cell processor or any successor to that chip in the still unannounced Playstation 4 console. Sony, naturally, declined to comment.
So if Sony won't be using its own technology for the PS4, what will it use? One possible theory is that Sony could get a third-party company to create a custom processor for the console. Indeed, there is a recent rumor on the Forbes web site that claims Sony has selected AMD to provide the graphics chip for the PS4. It's possible that Sony could get AMD to also create the CPU for the console as well.
Whatever Sony's plans are for the PS4, it's likely we won't be hearing about them anytime soon. Sony's soon-to-be CEO Kaz Hirai has already announced that the company has no plans to announce any new game consoles at the E3 trade show this June.