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Recap

Recap. Cost and Trends in Cost. Cost is an important factor in the design of any computer system (except may be supercomputers) Cost: amount spent by manufacturer to produce a finished good Cost changes over time The learning curve

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Recap

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  1. Recap

  2. Cost and Trends in Cost • Cost is an important factor in the design of any computer system (except may be supercomputers) • Cost: amount spent by manufacturer to produce a finished good • Cost changes over time • The learning curve • High volume products lowers manufacturing costs (Double the volume will decrease the cost by 10%) • Commodity products decreases cost as well • Commodities: identical products sold by many vendors in large volumes (keyboards, DRAMs) – low cost because of high volume and competition among suppliers

  3. Processor Prices

  4. Memory Prices

  5. Trends in Cost:The Price of Pentium4 and PentiumM

  6. Wafer F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F F Processing Slicing IC Die F Packaging F Wafer, Die, IC http://www.intel.com/museum/online/funfacts.htm

  7. Dingwall’s Equation Cost of Integrated Circuits

  8. Explanations Second term in “Dies per wafer” corrects for the rectangular dies near the periphery of round wafers “Die yield” assumes a simple empirical model: defects are randomly distributed over the wafer, and yield is inversely proportional to the complexity of the fabrication process (indicated by a) a=3-4 for modern processes implies that cost of die is proportional to (Die area)4

  9. Manufacturing Defects         Yield 13/16 working chips 81.25% yield 1/4 working chips 25.0% yield

  10. Assuming $250 per wafer: $5.92 per die $58.82 per die 17 die, 25.0% yield  4.25 working parts / wafer Yield (2) 52 die, 81.25% yield  42.25 working parts / wafer

  11. Where Do The Transistors Go? • Logic contributes a (vanishingly) small fraction of the number of transistors • Memory (mostly on-chip cache) is the biggest fraction • Computing is free, communication is expensive

  12. List Price Average Discount 25~40% ASP Gross Margin Gross Margin 45~65% 34~39% Direct Cost 20~22% Direct Cost 10~11% Direct Cost 6~8% Component Cost Component Cost Component Cost Component Cost 72~80% 15~33% 100% 25~44% +(33~66)% +(25~40)% +(82~186)% Cost of ComputersWhat is Relationship of Cost to Price?

  13. Component Cost vs. System Price • Increase CPU cost by $100 • Then • Direct costs go up by ~$20 • Indirect costs go up by ~$40 • Discount goes up by ~$50 • List price of the system is now $210 up • Then, if fewer get sold because of this, indirect costs go up… • Relationship is very complex

  14. Cost and Price • A $1000 increase in cost may result in a $3000 increase • in price – hence, important to understand the relationship • The relationship is complex – for example, a company may • under-price a product that has heavy competition and • over-price a product that has no competition

  15. Contribution of IC Costs to Total System Cost

  16. Desktop Prices All systems have similar configurations – price variations due to expandability, expensive disks/memory/processor/OS, commoditization

  17. Server Prices

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