CS510 Computer Architectures Lecture 2 Cost Cost CS510 Computer Architectures

CS510 Computer Architectures nMOSFET NMOS Transistor(NMOS FET) n+polysilicon low pressure chemical vapor deposition N+ SiO2, Oxidation (approx. 0.6 micron) Gate oxidation(approx 0.05 micron) Form Source and Drain areas As ion implantation P-type silicon Cost CS510 Computer Architectures

CS510 Computer Architectures NMOS Inverter Oxidation grow n+ n+ Etching contact area aluminum deposit, form pattern Aluminum(connection) Cost CS510 Computer Architectures

CS510 Computer Architectures Wafer, Die, IC Wafer F F F F F F F F F F F F F F Processing Slicing F IC F Die Packaging Cost CS510 Computer Architectures

Integrated Circuits Costs IC Cost = Die Cost + Testing cost + Packaging Cost Final Test Yield Wafer Die Processing Testing Packaging Testing Yields = good dies processed dies Cost CS510 Computer Architectures

Integrated Circuits Costs IC cost = Die cost + Testing cost + Packaging cost Final test yield Die cost = Wafer cost Dies per Wafer x Die yield Cost CS510 Computer Architectures

Integrated Circuits Costs IC cost = Die cost + Testing cost + Packaging cost Final test yield Die cost = Wafer cost Dies per Wafer x Die yield Dies per wafer = p * ( Wafer_diam / 2)2 p * Wafer_diam Die Area (2 * Die Area)0.5 - Test Dies per wafer Cost CS510 Computer Architectures

Integrated Circuits Costs IC cost = Die cost + Testing cost + Packaging cost Final test yield Die 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 Defects_per_unit_area x Die_Area (manufacturing complexity(No. of masking levels)) Die Yield = Wafer yield x {1+ - a } Cost CS510 Computer Architectures

Integrated Circuits Costs Die Cost goes roughly with (die area)4 example : defect density : 0.8 per cm2 a = 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, $27 case 2 : 25 good 2.25-cm2 dies, $140 Cost CS510 Computer Architectures

CS510 Computer Architectures Real World Examples Chip Metal Line Wafer Defect Area Dies/ Die Layers Width Cost /cm2 mm2/Wf Yield Cost 486DX2 3 0.80 $1,200 1.08 1181 54% $12 Power PC601 4 0.80 $1,700 1.312 1115 28% $53 HP PA 7100 3 0.80 $1,300 1.01 9666 27% $73 DEC Alpha 3 0.70 $1,500 1.22 3453 19% $149 Super Sparc 3 0.70 $1,700 1.62 5648 13% $272 Pentium 3 0.80 $1,500 1.52 9640 9% $417 From "Estimating IC Manufacturing Costs,” by Linley Gwennap, Microprocessor Report, August 2, 1993, p. 15 Cost CS510 Computer Architectures

CS510 Computer Architectures Other Costs Die Test Cost = Test Jig Cost * Ave. Test Time Die Yield Packaging Cost: depends on pins, heat dissipation, beauty, ... Chip Die Package Test & Total cost pins type cost assembly cost 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 QFP: Quad Flat Package PGA: Pin Grid Array BGA: Ball Grid Array Cost CS510 Computer Architectures

Cost/Performance What is Relationship of Cost to Price? Component Costs List Price 100% Component Cost 100% Cost CS510 Computer Architectures

Cost/Performance What is Relationship of Cost to Price? Component Costs Direct Costs (add 25% to 40% of component costs) Recurring costs: labor, purchasing, scrap, warranty List Price 100% Direct Cost 20% to 28% Component Cost 72% to 80% Cost CS510 Computer Architectures

Cost/Performance What is Relationship of Cost to Price? Component Costs 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 List Price PC’s -- Lower gross margin - Lower R&D expense - Lower sales cost Mail order, Phone order, retail store… - Higher competition Lower profit, volume sale,... 100% Gross Margin 45% to 65% Direct Cost 10% to 11% Gross margin varies depending on the products High performance large systems vs Lower end machines Component Cost 25 % to 44% Cost CS510 Computer Architectures

Cost/Performance What is Relationship of Cost to Price? Component Costs 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 List Price 100% Average Discount 25% to 40% Avg. Selling Price Gross Margin 34% to 39% Direct Cost 6% to 8% Component Cost 15% to 33% Cost CS510 Computer Architectures

Cost/Performance What is Relationship of Cost to Price? List Price Direct Cost Gross Margin Average Discount Component Cost 15~33% 6~8% 34~39% 25~40% Direct Cost Gross Margin Component Cost 25~44% 10~11% 45~65% ASP Direct Cost Component Cost 72~80% 20~22% Component Cost 100% +(25~40)% +(82~186)% +(33~66)% Cost CS510 Computer Architectures

CS510 Computer Architectures Cost CS510 Computer Architectures

CS510 Computer Architectures Cost CS510 Computer Architectures

CS510 Computer Architectures Chip Prices (August 1993) Assume purchase 10,000 units Chip Area Mfg. Price Multi- Comment mm2 cost plier 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 Intense Competition No Competition Recoup R&D? Early in shipments Cost CS510 Computer Architectures

Workstation Costs: $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

CS510 Computer Architectures Learning Curve Unit $ production costs time to introduce new product volume Years Cost CS510 Computer Architectures

CS510 Computer Architectures Volume vs Cost Manufacturer: If you can sell a large quantity, you will still get the profit with the 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

CS510 Computer Architectures Volume vs. Cost Rule 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. Example: 40 MPPs/year @ 200 nodes = 8,000 nodes/year vs. 100,000 Workstations/year Workstation volume = 12.5 x MPP volume 12.5 = 23.6 Workstation cost: (0.9)3.6 = 0.68 For workstations, cost should be 1/3 less of MPP What about PCs vs. WS? Cost CS510 Computer Architectures

Volume vs. Cost: PCs vs. Workstations 1990 1992 1994 1997 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 65X = 26.0 (0.9)6.0 = 0.53 = For whole market 50% costs for PCs vs. Workstations Single company: 20% WS market vs. 10% PC market Ratio 29 29 32 33 32 32X = 25.0 (0.9)5.0 = 0.59 = For single company 60% costs for PCs vs. Workstations Cost CS510 Computer Architectures

High Margins On High-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

Recouping Development Cost On Low Volume Microprocessors? Hennessy says MIPS R4000 cost $30M to develop Intel rumored to invest $100M on 486 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 Cost CS510 Computer Architectures

Price/Performance: Gross Margin vs. Market Segment 0% 20% 40% 60% 80% 100% Mini W/S PC Average Discount Gross Margin Direct Costs Component Costs Cost CS510 Computer Architectures