1. December 4, 2015204521 Digital System Architecture Cost, Price, and Price for Performance Pradondet Nilagupta Spring 2001 (original notes from Randy Katz, UC Berkeley)

2. December 4, 2015204521 Digital System Architecture2 Review From Last Time (1/2) Given sales a function of performance relative to competition, tremendous investment in improving product as reported by performance summary Good products created when have: –Good benchmarks –Good ways to summarize performance If benchmarks/summary inadequate, then choice between improving product for real programs vs. improving product to get more sales;

3. December 4, 2015204521 Digital System Architecture3 Review From Last Time (2/2) Execution time is the REAL measure of computer performance! What about cost?

4. December 4, 2015204521 Digital System Architecture4 Integrated Circuits

5. December 4, 2015204521 Digital System Architecture5 Integrated Circuits Costs (1/3)

6. December 4, 2015204521 Digital System Architecture6 Integrated Circuits Costs (2/3)

7. December 4, 2015204521 Digital System Architecture7 Integrated Circuits Costs (3/3) Defect per unit area (0.6 to 1.2), Fabrication complexity: a (about 3)  is a parameter that correspond to the number of masking level (roughly 3 for CMOS) For Advanced Processes: Die Cost goes roughly with die area 4

8. December 4, 2015204521 Digital System Architecture8 Real World Example ChipMetal Layer Line Width Wafer Cost Defect /Cm 2 Area mm 2 Dies/ Wafer YieldDie Cost 386DX20.90$9001.04336071%$4 486DX230.80$12001.08118154%$12 PowerPC 60140.80$17001.312111528%$53 HP PA 710030.80$13001.01966627%$73 DEC Alpha30.70$15001.22345319%$149 Super SPARC30.70$17001.62564813%$272 Pentium30.80$15001.5296409%$417 From "Estimating IC Manufacturing Costs, ” by Linley Gwennap, Microprocessor Report, August 2, 1993, p. 15

9. December 4, 2015204521 Digital System Architecture9 Other Cost ChipDie Cost pinPackage Type CostTest & Assembly Total 386DX$4132QFP$1$4$9 486DX2$12168PGA$11$12$35 PowerPC 601$53304QFP$3$21$77 HP PA 7100$73504PGA$35$16$124 DEC Alpha$149431PGA$30$23$202 Super SPARC$272293PGA$20$34$326 Pentium$417273PGA$19$37$473 Packaging Cost: depends on pins, heat dissipation, appearance,...

10. December 4, 2015204521 Digital System Architecture Cost/Performance What is Relationship of Cost to Price? Component Costs Component Cost List Price 15% to 33%

11. December 4, 2015204521 Digital System Architecture Cost/Performance What is Relationship of Cost to Price? Component Costs Direct Costs (add 25% to 40%) recurring costs: labor, purchasing, scrap, warranty Component Cost Direct Cost List Price 15% to 33% 6% to 8%

12. December 4, 2015204521 Digital System Architecture 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 Component Cost Direct Cost Gross Margin List Price 15% to 33% 6% to 8% 34% to 39%

13. December 4, 2015204521 Digital System Architecture 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 Component Cost Direct Cost Gross Margin Average Discount Avg. Selling Price List Price 15% to 33% 6% to 8% 34% to 39% 25% to 40%

14. December 4, 2015204521 Digital System Architecture Assume purchase 10,000 units Chip Prices (August 1993) ChipAreaMfg.PriceMulti-Comment mm 2 costplier Intense Competition 386DX43 $9 $31 3.4 Intense Competition No Competition 486DX281 $35 $245 7.0 No Competition PowerPC 601121 $77 $280 3.6 DEC Alpha234 $202 $1231 6.1 Recoup R&D? Pentium296 $473 $965 2.0 Early in shipments

15. December 4, 2015204521 Digital System Architecture15 Chip Prices (August 1993) Assume purchase 10,000 units ChipAreaMfg.PriceMulti-Comment mm 2 costplier 386DX43 $9 $31 3.4 Intense Competition 486DX281 $35 $245 7.0 No Competition PowerPC 601121 $77 $280 3.6 DEC Alpha234 $202 $1231 6.1 Recoup R&D? Pentium296 $473 $965 2.0 Early in shipments

16. December 4, 2015204521 Digital System Architecture16 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%

17. December 4, 2015204521 Digital System Architecture Learning Curve Years production costs volume time to introduce new product

18. December 4, 2015204521 Digital System Architecture18 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. 40 MPPs @ 200 nodes = 8,000 nodes/year vs. 100,000 Workstations/year 2 X = (100,000/8,000) => x = 3.6 Since doubling value reduces cost by 10%, costs reduces to (0.9) 3.6 = 0.68 of the original price (about 1/3 less expensive).

19. December 4, 2015204521 Digital System Architecture19 Volume vs. Cost: PCs vs. Workstations 1990199219941997 PC23,880,898 33,547,589 44,006,000 65,480,000 WS407,624 584,544 679,320 978,585 Ratio59 57 65 67 2 x = 65 => X = 6.0 and (0.9) 6.0 = 0.53 ญ PC costs are 47% less than workstation costs for whole market. Single company: 20% WS market vs. 10% PC market Ratio29 29 32 33 2 x = 32 => X = 5.0 and (0.9) 5.0 = 0.59 ญ PCs cost 41% less than workstations for single company.

20. December 4, 2015204521 Digital System Architecture20 High Margins on High-End Machines R&D considered return on investment (ROI) ญ 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 –Much higher margins Cost of 1 MB Memory (January 1994): PC$40(Mac Quadra) WS $42(SS-10) Mainframe$1920(IBM 3090) Supercomputer $600(M90 DRAM) $1375 (C90 15 ns SRAM)

21. December 4, 2015204521 Digital System Architecture21 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 ($2/chip) SGI/MIPS can get $30M from margin of workstations vs. chips vs. $100/chip Alternative: SGI buys chips vs. develops them

22. December 4, 2015204521 Digital System Architecture22 Price/Performance Gross Margin vs. Market Segment

23. December 4, 2015204521 Digital System Architecture23 Price/Performance Gross Margin vs. Market Segment

24. December 4, 2015204521 Digital System Architecture Information Technology R&D Compaq is #1 PC maker in US

25. December 4, 2015204521 Digital System Architecture Accelerating Pace of Product Development Product age as % of revenue

26. December 4, 2015204521 Digital System Architecture Shift in Employment Towards Software and Services

27. December 4, 2015204521 Digital System Architecture27 Long Term R&D Investments Take Time to Payoff Timesharing Networking Redundant Array of Inexpensive Disks Parallel Computing MicroElectro Mech. Systems 19651970 19751990198519801995 Gov ’ t Research$1B businessIndustry R & D Reduced Instruction Set Architecture

28. December 4, 2015204521 Digital System Architecture28 Power/Energy ÊLead processor power increases every generation Ë Compactions provide higher performance at lower power

29. December 4, 2015204521 Digital System Architecture29 Energy/Power Power dissipation: rate at which energy is taken from the supply (power source) and transformed into heat Energy dissipation for a given instruction depends upon type of instruction (and state of the processor)

30. December 4, 2015204521 Digital System Architecture30 The Energy-Flexibility Gap Embedded Processors SA110 0.4 MIPS/mW ASIPs DSPs 2 V DSP: 3 MOPS/mW Dedicated HW Flexibility (Coverage) Energy Efficiency MOPS/mW (or MIPS/mW) 0.1 1 10 100 1000 Reconfigurable Processor/Logic Pleiades 10-80 MOPS/mW