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Intel's Per-Chip Cost Averages $40
Fedorpheux writes "According to a report by the analysts at In-Stat, Intel's average cost per chip is about $40. These same chips, such as the Pentium 4s, can cost consumers up to $637. This $40 average cost has remained rather steady since 2003. This cost does not include money spent on marketing or development, but it does explain how Intel can continue its profits even in this era of quickly dropping prices in computer hardware."
"This cost does not include money spent on marketing or development"
Yeah, that would have been too... Honest? Thorough?
So what's the per-chip cost WITH all of the overhead?
"Ask not what your country can do for you." --John F. Kennedy
Since (presumably) Intel can produce chips significantly more cheaply than AMD can, the price drops to AMD's cost of production, not Intel's.
That way, AMD is a perpetual break-even operation, and Intel rakes in the cash without worrying too much about the Justice Dept.
Whenever I hear the word 'Innovation', I reach for my pistol.
Intel's AVERAGE cost per chip is about $40. These same chips, such as the Pentium 4s, can cost consumers UP TO $637.
In other news, an analyst has determined that Adobe's cost per copy to manufacture Adobe Photoshop is about $0.35. This leaves out all research and development costs, such as writing code.
What are they including in this $40 cost, the price for 1/10 of an oz of silicon? If you don't want to include developing x-ray laser lithography or designing the circuit layout for 55 million transistors, I'm sure they are cheap to pump out.
There are lots of companies for whom the marginal cost to them of providing an additional unit is often near 0 - software companies, airlines, informational databases, etc. For such companies, knowing their actual marginal cost of production doesn't give you much useful information.
It should be a dead giveaway that the marginal cost of production on a processor is very low, because the same processor always costs a fortune when it's introduced, and then is sold new for a small fraction if its original price a few years later, just before they pull it from the market. Clearly, they wouldn't lower the prices that much if they were losing money on each one.
Merely building a new chip fab represents a significant amount of money compared to the aggregate marginal manufacturing costs of every chip to come out of the entire plant for it's whole life. The semiconductor industry runs on huge R&D costs and small individual unit manufacturing costs. Pointing that out isn't really news.
Can anyone tell me how to set my sig on Slashdot?