In playwright.config.ts file, need to provide path of "chrome.exe" from program files. Update the code like below,

projects: [ { name: 'chromium', use: { browserName: 'chromium', launchOptions: { executablePath: 'C:\Program Files\Google\Chrome\Application\chrome.exe' } } } ]

This issue occurs due the by default it was unable to find the chrome.exe file.