🚀 go-pugleaf

Excellent response!   The raw materials in a car may only amount
to $100 or less, but to put them together in such a way that you
use them to drive around to Greenpeace meetings and complain
about the greed of the Big 3 automakers requires substantial
additional expenditure per unit.   All things considered, it might
be difficult for intel or AMD to make any money at all on CPUs
that sell for less than $50.  Look at the red ink in the memory
business, where prices of $10 and less for commodity RAMs
is leading vendors to the conclusion that the business is no
longer viable.   High margins are good for investors.   Low
margins are good for consumers.   In a free market, an equilibrium
will be reached.  It's good that we have socket 7 and multiple
vendors competing to provide the solution.

Paul DeMone wrote in message <35C29448.1ED3@EasyInternet.net>...
>biggfredd@NOSPAMcomputech-online.net wrote:
>[snip]
>> When factoring in design costs and the costs of building new facilities,
etc
>> (that is, unit cost accounting) those figures are certainly correct.  But
as
>> my original post was worded, the materials (only) in a chip probably
aren't
>> more than 50 cents.  Put another way, the incremental cost of the next
>> additional chip isn't very much.
>
>  The incremental cost of the next chip is certainly more than 50 cents.
>
>  You are correct in that raw materials are cheap (silicon, oxygen, and
>  aluminum are some of the most common elements in the earth's crust) but
>  this is like an insurance company trying to settle with someone's
>  benefactors for $10 because a dead body only has $10 worth of chemicals
>  in it.
>
>  You start with sand (special kind) and reduce it to metalurgical grade
>  silicon.  You then zone refine it to an utterly incredible level of
>  purity to obtain electronic quality silicon.  You then have to melt
>  it and then pull a 8" diameter single crystal boule from the crucible
>  for slicing into a wafer.  The wafer is polished and possibly gettered
>  and at this stage is probably worth several tens of dollars.  You then
>  run it through a fab where it goes through many dozens of repetitive
>  steps of lithography, etching, implantation, polishing etc using very
>  expensive machinery, very expensive chemicals, and tons of high purity
>  deionized water, in an expensive, vibration isolated and highly filtered
>  clean room facility.  The finished 8" wafer processed in say a 0.25 um,
>  5 level metal CMOS process has probably cost you several thousand dollars
>  so far.  You have to probe the wafer (i.e. step a probe card across the
>  wafer stopping at each potential die site to run basic functional tests
>  and ink the bad die while occupying a multi million dollar tester).  You
>  have just added hundreds of dollars of cost to your now tested wafer.
>  The probed wafer is now shipped off-shore for slicing and packaging
>  (maybe several cents per pin or more depending on package type).  You
>  now have to retest each packaged die but with a longer, more extensive
>  final test program that occupies the many hundreds of dollar per hour
>  tester for possibly several minutes per device.  For a PC class micro
>  the variable cost is probably $40 - $80 per device and twice that for
>  a workstation/server class device.  Not quite 50 cents!
>
>
>All opinions strictly my own.
>
>--
>Paul W. DeMone                 The 801 experiment SPARCed an ARMs race
>Kanata, Ontario                to put more PRECISION and POWER into
>demone@mosaid.com              architectures with MIPSed results but
>PaulDeMone@EasyInternet.net    ALPHA's well that ends well.
>