1. Computer Architecture
Part I-B: Cost

2. Cost Cost-sensitive designs are of growing importance.
Learning curve: manufacturing costs decrease over time
The learning curve is best measured by a change in yield - the percentage of manufactured devices that survives the testing procedure.

3. DRAM Prices
Source: Computer Architecture: A Quantitative Approach, 2nd Ed. by Hennessy & Patterson

4. Integrated Circuit Costs
Wafer cost
Cost of die =
Dies per wafer * Die yield
Die yield: assume defects are randomly, distributed,
where die yield is the percentage of good dies in the wafer.

5. Real World Examples
Chip Metal Line Wafer Defect Area Dies/ Yield Die Cost layers width cost /cm2 mm2 wafer
386DX $ % $4
486DX $ % $12
PowerPC $ % $53
HP PA $ % $73
DEC Alpha $ % $149
SuperSPARC $ % $272
Pentium $ % $417
From "Estimating IC Manufacturing Costs,” by Linley Gwennap, Microprocessor Report, August 2, 1993, p. 15
Redo table for smaller line width and with “volume” figures.

6. Other Costs Packaging Cost: depends on pins, heat dissipation
Die Cost + Testing Cost + Packaging Cost
IC Cost =
Final Test Yield
Chip Die Package Test & Total cost pins type cost Assembly
386DX $ QFP $1 $4 $9
486DX2 $ PGA $11 $12 $35
PowerPC 601 $ QFP $3 $21 $77
HP PA $ PGA $35 $16 $124
DEC Alpha $ PGA $30 $23 $202
SuperSPARC $ PGA $20 $34 $326
Pentium $ PGA $19 $37 $473

7. Chip Prices (August 1993) Assume purchase 10,000 units
Chip Area Mfg. Price Multi- Comment
mm2 cost plier
386DX 43 $9 $ Competition!
486DX2 81 $35 $ No Competition
PowerPC $77 $
DEC Alpha 234 $202 $ Recover R&D Expense?
Pentium 296 $473 $ Early in shipments
Assume purchase 10,000 units

8. System Cost (1995-96 Workstation)
Cabinet Sheet metal, plastic 1% Power supply, fans 2% Cables, nuts, bolts 1% (Subtotal) (4%)
Motherboard Processor 6% DRAM (64MB) 36% Video system 14% I/O system 3% Printed Circuit board 1% (Subtotal) (60%)
I/O Devices Keyboard, mouse 1% Monitor 22% Hard disk (1 GB) 7% Tape drive (DAT) 6% (Subtotal) (36%)

9. Cost vs. Price
Lower costs does not necessarily mean lower prices, it may just mean increased profits.
(WS–PC)
list price
+50–80%
Average
Discount
Q: What % of company income
on Research and Development (R&D)?
(33–45%)
avg. selling price
+25–100%
Gross Margin
gross margin
(33–14%)
+33%
Direct Costs
direct costs
direct costs
(8–10%)
* R&D is 4% of income (PC company) to 12% (high end server)
Component
Cost
component
cost
component
cost
component
cost
(25–31%)
Input:
chips,
displays, ...
Making it: labor, scrap, returns, ...
Overhead: R&D, rent, marketing, profits, ...
Commission: channel profit, volume discounts,