Manufacturing “Cell” processors isn't as refined or easy as other existing mainstream lines, so it's not a huge surprise to learn that IBM is saying that yields are as low as 10-20%. Beyond just refining the manufacturing process, the Cell is a complex processor that is based off of IBM's PowerPC core, and some CPUs coming off the line may work, but not up to the standards of a Cell CPU:

Reeves' figure is likely to centre on the top-grade chips, so the number of suitably operational PS3-oriented parts coming off the production line is likely to be higher - and will continue to rise, in all probability, as more wafers are completed and the Cell partners continue to refine the process.
With Sony's goal of 6 million PS3's sold in roughly 9 months from now, and the PS3 already not being a profitable machine, it seems they are investing an enormous chunk of money into their new console. I wonder how much the yield rate improving on the Cell will alter prices, if at all.