In plain English, this means the PS3 Cell processor is so big and complicated, they're having a hard time making enough to satisfy the demand. An IBM Semiconductor VP says they're "lucky to get 10 or 20 percent" out of a chip like the Cell. The other 80-90 percent aren't fit to be used in PS3s, meaning they either get used in another application or thrown away if they can't be.
What this means to you is that the PS3 is probably going to be available in very limited quantities, at least until they can get the yields up. Also, Sony's going to be bleeding money on these chips, since they need to make so many (5 to 1 ratio?) to get one good enough to use in a PS3. Better get your pre-orders in now.
Image courtesy Digital Lifestyle Mag