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As the importance of cost-sensitive designs grows in computer architecture, understanding manufacturing costs and yields becomes crucial. The learning curve highlights how costs decrease over time, especially as manufacturing yields improve. Key factors in IC costs include die yield, packaging, and assembly expenses. By analyzing real-world examples from various chip architectures, we can see how costs are influenced by component pricing, research and development, and market competition, ultimately shaping the pricing strategies for modern technology.
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Computer Architecture Part I-B: Cost
Cost • Cost-sensitive designs are of growing importance. • Learning curve: manufacturing costs decrease over time • The learning curve is best measured by a change in yield - the percentage of manufactured devices that survives the testing procedure.
DRAM Prices Source: Computer Architecture: A Quantitative Approach, 2nd Ed. by Hennessy & Patterson
Integrated Circuit Costs Wafer cost Cost of die = ------------------------------------- Dies per wafer * Die yield where die yield is the percentage of good dies in the wafer.
Chip Metal Line Wafer Defect Area Dies/ Yield Die Cost layers width cost /cm2 mm2 wafer 386DX 2 0.90 $900 1.0 43 360 71% $4 486DX2 3 0.80 $1200 1.0 81 181 54% $12 PowerPC 601 4 0.80 $1700 1.3 121 115 28% $53 HP PA 7100 3 0.80 $1300 1.0 196 66 27% $73 DEC Alpha 3 0.70 $1500 1.2 234 53 19% $149 SuperSPARC 3 0.70 $1700 1.6 256 48 13% $272 Pentium 3 0.80 $1500 1.5 296 40 9% $417 From "Estimating IC Manufacturing Costs,” by Linley Gwennap, Microprocessor Report, August 2, 1993, p. 15 Real World Examples
Packaging Cost: depends on pins, heat dissipation Die Cost + Testing Cost + Packaging Cost IC Cost = ------------------------------------------------------- Final Test Yield Other Costs • Chip Die Package Test & Total cost pins type cost Assembly • 386DX $4 132 QFP $1 $4 $9 • 486DX2 $12 168 PGA $11 $12 $35 • PowerPC 601 $53 304 QFP $3 $21 $77 • HP PA 7100 $73 504 PGA $35 $16 $124 • DEC Alpha $149 431 PGA $30 $23 $202 • SuperSPARC $272 293 PGA $20 $34 $326 • Pentium $417 273 PGA $19 $37 $473
Assume purchase 10,000 units Chip Prices (August 1993) • Chip Area Mfg. Price Multi- Comment • mm2 cost plier • 386DX 43 $9 $31 3.4 Competition! • 486DX2 81 $35 $245 7.0No Competition • PowerPC 601 121 $77 $280 3.6 • DEC Alpha 234 $202 $1231 6.1 Recover R&D Expense? • Pentium 296 $473 $965 2.0 Early in shipments
Cabinet Sheet metal, plastic 1% Power supply, fans 2% Cables, nuts, bolts 1%(Subtotal)(4%) Motherboard Processor 6% DRAM (64MB) 36% Video system 14% I/O system 3% Printed Circuit board 1% (Subtotal)(60%) I/O Devices Keyboard, mouse 1% Monitor 22% Hard disk (1 GB) 7% Tape drive (DAT) 6% (Subtotal)(36%) System Cost (1995-96 Workstation)
Cost vs. Price Lower costs does not necessarily mean lower prices, it may just mean increased profits. (WS–PC) list price +50–80% Average Discount Q: What % of company income on Research and Development (R&D)? (33–45%) avg. selling price +25–100% Gross Margin gross margin (33–14%) +33% Direct Costs direct costs direct costs (8–10%) Component Cost component cost component cost component cost (25–31%) Input: chips, displays, ... Making it: labor, scrap, returns, ... Overhead: R&D, rent, marketing, profits, ... Commission: channel profit, volume discounts,