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Cost CS510 Computer Architectures Lecture 2 - 1
Lecture 2Lecture 2
CostCost
Lecture 2Lecture 2
CostCost
Cost CS510 Computer Architectures Lecture 2 - 2
nMOSFETnMOSFET
NMOS Transistor(NMOS FET)
P-type silicon
Gate oxidation(approx 0.05 micron)
n+polysilicon low pressurechemical vapor deposition
N+
As ion implantation
Form Source and Drain areas
SiO2, Oxidation(approx. 0.6 micron)
Cost CS510 Computer Architectures Lecture 2 - 3
NMOS InverterNMOS Inverter
n+ n+
Etching contact areaaluminum deposit, form pattern
Aluminum(connection)
Oxidation grow
n+ n+
Cost CS510 Computer Architectures Lecture 2 - 4
Wafer, Die, ICWafer, Die, IC
Processing
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
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
FF
Die
FF
IC
Packaging
Slicing
Wafer
Cost CS510 Computer Architectures Lecture 2 - 5
Integrated Circuits CostsIntegrated Circuits Costs
Processing
Packaging
TestingTestingTestingTestingYields =good dies
processed dies
IC Cost = Die Cost + IC Cost = Die Cost + Testing costTesting cost + Packaging Cost + Packaging CostFinal Test YieldFinal Test Yield
WaferDie
TestingTestingTestingTesting
Cost CS510 Computer Architectures Lecture 2 - 6
Integrated Circuits CostsIntegrated Circuits Costs
Die costDie cost = Wafer cost Dies per Wafer x Die yieldDie costDie cost = Wafer cost Dies per Wafer x Die yield
IC cost = Die cost + Testing cost + Packaging cost Final test yieldIC cost = Die cost + Testing cost + Packaging cost Final test yield
Cost CS510 Computer Architectures Lecture 2 - 7
Integrated Circuits CostsIntegrated Circuits Costs
Dies per waferDies per wafer = p * ( Wafer_diam / 2)2 p * Wafer_diam Die Area (2 * Die Area)0.5
- Test Dies per wafer
IC cost = Die cost + Testing cost + Packaging costIC cost = Die cost + Testing cost + Packaging cost Final test yieldFinal test yieldDie cost = Wafer costDie cost = Wafer cost Dies per WaferDies per Wafer x Die yield x Die yield
IC cost = Die cost + Testing cost + Packaging costIC cost = Die cost + Testing cost + Packaging cost Final test yieldFinal test yieldDie cost = Wafer costDie cost = Wafer cost Dies per WaferDies per Wafer x Die yield x Die yield
Cost CS510 Computer Architectures Lecture 2 - 8
Integrated Circuits CostsIntegrated Circuits Costs
Defects_per_unit_area x Die_Area
manufacturing complexity(No. of masking levels))
Die YieldDie Yield = Wafer yield x {1+ }
IC cost = Die cost + Testing cost + Packaging cost Final test yieldDie cost = Wafer cost Dies per Wafer x Die yield
Dies per wafer = p x ( Wafer_diam / 2)2 p x Wafer_diam Die Area (2 x Die Area)0.5
IC cost = Die cost + Testing cost + Packaging cost Final test yieldDie cost = Wafer cost Dies per Wafer x Die yield
Dies per wafer = p x ( Wafer_diam / 2)2 p x Wafer_diam Die Area (2 x Die Area)0.5
Cost CS510 Computer Architectures Lecture 2 - 9
Integrated Circuits CostsIntegrated Circuits Costs
example : defect density : 0.8 per cm2
= 3.0
case 1: 1 cm x 1 cm die yield = (1+(0.8x1)/3)-3 = 0.49
case 2: 1.5 cm x 1.5 cm die yield = (1+(0.8x2.25)/3)-3 = 0.24
20-cm-diameter wafer with 3-4 metal layers : $3000-$4000 in 1995 assume $3500
case 1 : 132 good 1-cm2 dies, $27case 2 : 25 good 2.25-cm2 dies, $140
Die Cost goes roughly with (die area)4
Cost CS510 Computer Architectures Lecture 2 - 10
Real World ExamplesReal World Examples
From "Estimating IC Manufacturing Costs,” by Linley Gwennap, Microprocessor Report, August 2, 1993, p. 15
Chip Metal Line Wafer Defect Area Dies/ DieLayers Width Cost /cm2 mm2/Wf Yield Cost
486DX2 3 0.80 $1,200 1.08 1181 54% $12Power PC601 4 0.80 $1,700 1.312 1115 28% $53HP PA 7100 3 0.80 $1,300 1.01 9666 27% $73DEC Alpha 3 0.70 $1,500 1.22 3453 19% $149Super Sparc 3 0.70 $1,700 1.62 5648 13% $272Pentium 3 0.80 $1,500 1.52 9640 9% $417
Cost CS510 Computer Architectures Lecture 2 - 11
Die Test Cost = Test Jig Cost * Ave. Test Time
Die Yield
Packaging Cost: depends on pins, heat dissipation, beauty, ...
Other CostsOther Costs
Chip Die Package Test & Total
cost pins type cost assembly cost
QFP: Quad Flat PackagePGA: Pin Grid ArrayBGA: Ball Grid Array
486DX2 $12 168 PGA $11 $12 $35
Power PC 601 $53 304 QFP $3 $21 $77
HP PA 7100 $73 504 PGA $35 $16 $124
DEC Alpha $149 431 PGA $30 $23 $202
Super SPARC $272 293 PGA $20 $34 $326
Pentium $417 273 PGA $19 $37 $473
Cost CS510 Computer Architectures Lecture 2 - 12
Cost/PerformanceCost/PerformanceWhat is Relationship of Cost to Price?What is Relationship of Cost to Price?
Component Costs
List Price
100%Component Cost100%
Cost CS510 Computer Architectures Lecture 2 - 13
Cost/PerformanceCost/PerformanceWhat is Relationship of Cost to Price?What is Relationship of Cost to Price?
• Component Costs
List Price
100% Direct Cost 20% to 28%
72% to 80%ComponentCost
• Direct Costs (add 25% to 40% of component costs) Recurring costs: labor, purchasing, scrap,
warranty
Cost CS510 Computer Architectures Lecture 2 - 14
Cost/PerformanceCost/PerformanceWhat is Relationship of Cost to Price?What is Relationship of Cost to Price?
• Component Costs
List PricePC’s -- Lower gross margin- Lower R&D expense- Lower sales cost
Mail order, Phone order, retail store…- Higher competition Lower profit, volume sale,...
Gross margin varies depending on the productsHigh performance large systems vs Lower end machines
GrossMargin
45% to 65%
Direct Cost 10% to 11%
Component Cost
25 % to 44%
100%
• Direct Costs (add 25% to 40%) recurring costs: labor, purchasing, scrap, warranty
• Gross Margin (add 82% to 186%) nonrecurring costs: R&D, marketing, sales, equipment maintenance, rental, financing cost, pretax profits, taxes
Cost CS510 Computer Architectures Lecture 2 - 15
Cost/PerformanceCost/PerformanceWhat is Relationship of Cost to Price?What is Relationship of Cost to Price?
• Component Costs
100%
AverageDiscount
List Price
25% to 40%
GrossMargin
Avg. Selling Price34% to 39%
Direct Cost 6% to 8%
ComponentCost
15% to 33%
• Direct Costs (add 25% to 40%) recurring costs: labor, purchasing, scrap, warranty• Gross Margin (add 82% to 186%) nonrecurring costs:
R&D, marketing, sales,equipment maintenance, rental, financing cost, pretax profits, taxes
• Average Discount to get List Price (add 33% to 66%): volume discounts and/or retailer markup
Cost CS510 Computer Architectures Lecture 2 - 16
Cost/PerformanceCost/PerformanceWhat is Relationship of Cost to Price?What is Relationship of Cost to Price?
ComponentComponent CostCostComponentComponent CostCost
100%100%
Direct CostDirect Cost
ComponentComponent CostCostComponentComponent CostCost
72~80%72~80%
20~22%20~22%
+(25~40)%
List PriceList Price
Direct CostDirect Cost
Gross MarginGross Margin
Average Discount Average Discount
ComponentComponent CostCostComponentComponent CostCost
15~33%15~33%
6~8%6~8%
34~39%34~39%
25~40%25~40%25~40%25~40%
+(33~66)%+(82~186)%
Direct CostDirect Cost
Gross MarginGross Margin
ComponentComponent CostCostComponentComponent CostCost
25~44%25~44%
10~11%10~11%
45~65%45~65%
ASPASP
Cost CS510 Computer Architectures Lecture 2 - 17
Cost CS510 Computer Architectures Lecture 2 - 18
Cost CS510 Computer Architectures Lecture 2 - 19
Assume purchase 10,000 units
Chip Prices (August 1993)Chip Prices (August 1993)
Chip Area Mfg. Price Multi- Comment
mm2 cost plier
Intense Competition
No Competition
Recoup R&D?
Early in shipments
386DX 43 $9 $31 3.4
486DX2 81 $35 $245 7.0
PowerPC 601 121 $77 $280 3.6
DEC Alpha 234 $202 $1231 6.1
Pentium 296 $473 $965 2.0
Cost CS510 Computer Architectures Lecture 2 - 20
Workstation Costs:Workstation Costs: $1000 to $3000$1000 to $3000
• DRAM: 50% to 55%• Color Monitor: 15% to 20%• CPU board: 10% to 15%• Hard disk: 8% to 10%• CPU cabinet: 3% to 5%• Video & other I/O: 3% to 7%• Keyboard, mouse: 1% to 2%
Cost CS510 Computer Architectures Lecture 2 - 21
Learning CurveLearning Curve
production costs
volume
time to introducenew product
Years
$Unit
Cost CS510 Computer Architectures Lecture 2 - 22
Volume vs CostVolume vs Cost
• Manufacturer:– If you can sell a large quantity, you will still get the profit with t
he lower selling price» Lower direct cost, lower gross margin
• Consumer:– When you buy a large quantity, you will get a volume discount
» MPP manufacturer vs Workstation manufacturer vs PC manufacturer
Cost CS510 Computer Architectures Lecture 2 - 23
Volume vs. CostVolume vs. CostRule of thumb on applying learning curve to manufacturing: “When volume doubles, costs reduce 10%” A DEC View of Computer Engineering by C. G. Bell, J. C.
Mudge, and J. E. McNamara, Digital Press, Bedford, MA., 1978.
What about PCs vs. WS?
Example:40 MPPs/year @ 200 nodes = 8,000 nodes/year vs. 100,000 Workstations/year
Workstation volume = 12.5 x MPP volume12.5 = 23.6
Workstation cost: (0.9)3.6 = 0.68
For workstations, cost should be 1/3 less of MPP
Cost CS510 Computer Architectures Lecture 2 - 24
Volume vs. Cost:Volume vs. Cost: PCs vs. WorkstationsPCs vs. Workstations
Single company: 20% WS market vs. 10% PC market
PC 23,880,898 33,547,589 44,006,000 65,480,000 WS 407,624 584,544 679,320 978,585 Ratio 59 57 65 67
1990 1992 1994 1997
65X = 26.0 (0.9)6.0 = 0.53 = For whole market 50% costs for PCs vs. Workstations
32X = 25.0 (0.9)5.0 = 0.59= For single company 60% costs for PCs vs. Workstations
Ratio 29 29 32 33
32
Cost CS510 Computer Architectures Lecture 2 - 25
High Margins On High Margins On High-End MachinesHigh-End Machines
• R&D considered Return On Investment (ROI) = about 10%– Every $1 R&D must generate $7 to $13 in sales
• High end machines need more $ for R&D• Sell fewer high end machines
– Fewer to amortize R&D– Needs Much higher margins
• Cost of 1 MB Memory (January 1994):PC $ 40 (Mac Quadra)WS $ 42 (SS-10)Mainframe $1,920 (IBM 3090)Supercomputer $ 600 (M90 DRAM) $1,375 (C90
15 ns SRAM)
Cost CS510 Computer Architectures Lecture 2 - 26
Recouping Development Cost On Recouping Development Cost On Low Volume Microprocessors?Low Volume Microprocessors?
• SGI/MIPS sells 300,000 R4000s over product lifetime?• Intel sells 50,000,000 486s?
• Intel must get $100M from chips (100M/50M=$2/chip)• SGI/MIPS can get $30M from margin of workstations vs.
chips vs. 30M/0.3M=$100/chip• Alternative: SGI buys chips vs. develops them
• Hennessy says MIPS R4000 cost $30M to develop• Intel rumored to invest $100M on 486
Cost CS510 Computer Architectures Lecture 2 - 27
Price/Performance:Price/Performance:
Gross Margin vs. Market SegmentGross Margin vs. Market Segment
0%
20%
40%
60%
80%
100%
Mini W/S PC
Average Discount
Gross Margin
Direct Costs
Component Costs
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