Intel chip costs.. $40?

[Swimmer]

I guess it only costs Intel $40 in raw materials to make the $600 chips that you and I buy retail..

  Though Pentium 4s can sell for up to $637, Intel's average cost for making a chip comes to $40, according to a report from analysts In-Stat.

The report doesn't consider expenses related to design or marketing, or the fact that high-end chips can sell for more because fewer off the production line can actually run at top speed, but it does shed light on how Intel has managed to maintain healthy margins in an era of price declines. The cost has been steady at about $40 since 2003, according to In-Stat.

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[resopalrabotnick]

it does not reflect costs of design and marketing. doh! design is the most expensive part of the process. materials are nada. some silicates, a smidge of precious metals. the 40 bucks sounds a bit too low for the elaborate fab processes needed though. wonder what other costs were left out. power? staff? the factory itself?

[Swimmer]

I dont know about employment.. it might be in that number.. i would have to find the actual report to see what all is in that figure.. But design huge.. i will agree..

[just-]

what is really the question?

do you want to know how much it cost in power and man power per chip or what?

i will be able to find it for you.

[dlewis23]

The first chip that is made always cost more, like around 4-5 million $$$$ so they have to charge alot so they can make there money back + pay there employees + make a profit. AMD does the same thing the reason there chips don't cost as much is because they, cost about 1/2 of what a Pentium 4 costs to make 1 chip. The main reason is amd uses alot of aluminum in their products Ware as Intel uses more expensive copper, and AMD uses copper wires Ware as Intel uses gold wire.

[resopalrabotnick]

i think the question/opinion was that while fabbing a chip once it goes into series is a lot cheaper than the retail, the number of 40 bucks for a 670 buck retail seemed too low.

[cak46]

Here's a doc out of Duke on chip production costs.

www.ee.duke.edu/~sorin/prior-courses/ece152-spring2005/lectures/8.2-performance.pdf -

Kind of old, but good info.

[raptors892004]

Anyone got any info on AMD chip manufacturing cost? I would like to see which one costs more to manufacture.. My P4 runs good for its manufacturing price of 40$$

[coknuck]

This is from Cnet about AMD & Intel cost:

http://news.com.com/Intel,+AMD+neck+and+neck+in+chip+costs/2100-1001_3-914985.html

[raptors892004]

Amd makes their chips for 20$, Intel for 21$  .. But Intel sells some of them for 300$ more than AMD.. And those 20$ AMD chips are Athlon.. Wish I worked in the factory ..

[netmasta]

it does not reflect costs of design and marketing. doh! design is the most expensive part of the process. materials are nada. some silicates, a smidge of precious metals. the 40 bucks sounds a bit too low for the elaborate fab processes needed though. wonder what other costs were left out. power? staff? the factory itself?

I agree. What exactly did they leave out?  I'd love to be able to build my own computer with a $40 CPU.

[cak46]

I agree. What exactly did they leave out? I'd love to be able to build my own computer with a $40 CPU.

Profit, maybe?

[netmasta]

$637 -$40 = $597 profit per chip? Sounds like a lot to me.

[raptors892004]

$637 -$40 = $597 profit per chip? Sounds like a lot to me.

597$ profit x 1 000 000 chips sold at least = 597 mil $$ .. wow.. and it all comes down to a chip they spent 40$ on.. 

[xs1]

$637 -$40 = $597 profit per chip? Sounds like a lot to me.

Sounds like too much of a profit to me ;

[resopalrabotnick]

$637 -$40 = $597 profit per chip? Sounds like a lot to me.

i think that was meant as way too high a profit margin to be true. as in too many costs not considered in the calculation of the price.

[cak46]

Here's another article based on the in-stat report: http://www.computerworld.com/hardwaretopics/hardware/story/0,10801,104605,00.html

Went to instats site.  I'm not going to pay $2995 for the full report....... Talk about profit 

Excerpted from:  http://www.in-stat.com/catalog/Scatalogue.asp?id=86#IN0501748IN

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Intel Manufacturing Capacity and Die Cost

Report Information

Report Number: IN0501748IN

Publication Date: August 2005

Number of Pages: 44

Report Price: $2,995 U.S. Dollars

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Summary

In semiconductor manufacturing, interest in Intel