4 ms·

> Same goes for silicon. Oh no, a big part of the cost is in the manufacturing. A non negligible part is also in logic R&D of course but this is not comparable

by temac 5y ago

> Same goes for silicon. Oh no, a big part of the cost is in the manufacturing. A non negligible part is also in logic R&D of course but this is not comparable (at all) with software, where the marginal cost of duplication is near zero. Now your reasoning is still kind of sound despite of this, but historically the customers have not liked that kind of initiatives for processors. Now I understand that Intel is less good on process nowadays, so it kind of make sense for them to concentrate more on design and on market segmentation at the design level even if that means to make it completely artificial (with SKUs, it could be partly artificial, but you had no warranty to get a chip better than its SKU, with that scheme you are guaranteed to get a chip better than what you can use - if you don't buy all the options, with all the testing guaranteed passed, etc.) IMO, this is not actually too bad as long as the pricing is not insane, and that depends (partly) on competition. Given some users do not like that approach at all, some competitors could even decide to not do that.

qeternity 5y ago
> Oh no, a big part of the cost is in the manufacturing. Not in the marginal cost which I was referring to. I absolutely know the fixed cost is a large part of this. But high fixed costs encourage price discrimination because that increases the quantity supplied to the market.
- temac 5y ago
  The pure marginal cost of fabrication of a modern chips is not that cheap when seen in the context of production capacity (and with high demand you tend to concentrate on high-end anyway), and certainly not cheap compared to software, otherwise you would have even less kind of dies than you have today for the various SKUs, and less recovery strategies for various fabrication defects, plus Intel wants to fab for others, and they do not lead the process anymore. Also if you look at their current list of SKUs, that's already completely insane. Do they really need further discrimination on top of that and will they be able to extract tons of value? I'm not so sure. Thinking more about it maybe they simply want to keep roughly the same amount while doing less masks than usual because masks became crazy expensive. Would be interesting to look at some figures.
  - qeternity 5y ago
    > The pure marginal cost of fabrication of a modern chips is not that cheap when seen in the context of production capacity I mean, cheap is relative...but given the tens of billions needed for a fab, versus the tens of dollars of silicon, power and labor to produce a chip, I would still argue it's cheap.

by temac 5y ago

qeternity 5y ago

> Oh no, a big part of the cost is in the manufacturing. Not in the marginal cost which I was referring to. I absolutely know the fixed cost is a large part of this. But high fixed costs encourage price discrimination because that increases the quantity supplied to the market.

temac 5y ago
The pure marginal cost of fabrication of a modern chips is not that cheap when seen in the context of production capacity (and with high demand you tend to concentrate on high-end anyway), and certainly not cheap compared to software, otherwise you would have even less kind of dies than you have today for the various SKUs, and less recovery strategies for various fabrication defects, plus Intel wants to fab for others, and they do not lead the process anymore. Also if you look at their current list of SKUs, that's already completely insane. Do they really need further discrimination on top of that and will they be able to extract tons of value? I'm not so sure. Thinking more about it maybe they simply want to keep roughly the same amount while doing less masks than usual because masks became crazy expensive. Would be interesting to look at some figures.
- qeternity 5y ago
  > The pure marginal cost of fabrication of a modern chips is not that cheap when seen in the context of production capacity I mean, cheap is relative...but given the tens of billions needed for a fab, versus the tens of dollars of silicon, power and labor to produce a chip, I would still argue it's cheap.