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Recap
1
Cost and Trends in Cost
•
Cost is an important factor in the design of any
computer system (except may be supercomputers)
• Cost: amount spent by manufacturer to produce a
finished good
•
Cost changes over time
– The learning curve
– High volume products lowers manufacturing costs
(Double the volume will decrease the cost by 10%)
– Commodity products decreases cost as well
• Commodities: identical products sold by many vendors in
large volumes (keyboards, DRAMs) – low cost because of
high volume and competition among suppliers
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Processor Prices
3
Memory Prices
4
Trends in Cost:
The Price of Pentium4 and PentiumM
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Wafer, Die, IC
http://www.intel.com/museum/online/funfacts.htm
Wafer
Processing
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IC
Die
F
Packaging
F
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Cost of Integrated Circuits
Cost of die  Cost of testing die  Cost of packaging
Cost of IC 
Final test yield
Cost of wafer
Cost of die 
Dies per wafer  Die yield
Dingwall’s Equation
 Defects per unit area  Die area 
Die yield  Wafer yield  1 




2
 Wafer diameter 


2
    Wafer diameter  Test dies per wafer
Dies per wafer  
Die area
2  Die area

Cost of testing per hour  Average die test time
Cost of testing die 
Die yield
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Explanations
Second term in “Dies per wafer”
corrects for the rectangular dies
near the periphery of round wafers
“Die yield” assumes a simple empirical
model: defects are randomly distributed
over the wafer, and yield is inversely
proportional to the complexity of the
fabrication process (indicated by )
=3-4 for modern processes implies that
cost of die is proportional to (Die area)4
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Yield
Manufacturing
Defects







13/16 working chips
81.25% yield

1/4 working chips
25.0% yield
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Yield (2)
Assuming $250 per wafer:
$5.92 per die
$58.82 per die
52 die, 81.25% yield 
42.25 working parts / wafer
17 die, 25.0% yield 
4.25 working parts / wafer
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Where Do The Transistors Go?
• Logic contributes a (vanishingly) small fraction of the
number of transistors
• Memory (mostly on-chip cache) is the biggest fraction
• Computing is free, communication is expensive
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Cost of Computers
What is Relationship of Cost to Price?
List
Price
Average
Discount
25~40%
ASP
Component
Cost
100%
Gross
Margin
45~65%
Gross
Margin
Direct Cost
20~22%
Direct Cost
10~11%
Direct Cost
Component
Cost
72~80%
Component
Cost
25~44%
Component
Cost
+(25~40)%
+(82~186)%
34~39%
6~8%
15~33%
+(33~66)%
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Component Cost vs. System Price
• Increase CPU cost by $100
• Then
– Direct costs go up by ~$20
– Indirect costs go up by ~$40
– Discount goes up by ~$50
• List price of the system is now $210 up
– Then, if fewer get sold because of this,
indirect costs go up…
• Relationship is very complex
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Cost and Price
• A $1000 increase in cost may result in a $3000 increase
in price – hence, important to understand the relationship
• The relationship is complex – for example, a company may
under-price a product that has heavy competition and
over-price a product that has no competition
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Contribution of IC Costs to Total System Cost
Subsystem
Fraction of total cost
Cabinet: sheet metal, plastic, power supply, fans,
cables, nuts, bolts, manuals, shipping box
6%
Processor
22%
DRAM
5%
Video card
5%
Motherboard
5%
Processor board subtotal
37%
Keyboard and mouse
3%
Monitor
19%
Hard disk (20 GB)
9%
DVD drive
6%
I/O devices subtotal
37%
Software (OS + Office)
20%
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Desktop Prices
Vendor
Model
Processor
Clock speed
MHz
Price
Compaq
Presario 7000
AMD Athlon
1,400
$2,091
Dell
Precision 420
Intel Pentium III
1,000
$3,834
Dell
Precision 530
Intel Pentium 4
1,700
$4,175
HP
Workstation c3600
PA 8600
552
$12,631
IBM
RS6000 44P/170
IBM III-2
450
$13,889
Sun
Sunblade 100
UltraSPARC II-e
500
$2,950
Sun
Sunblade 1000
UltraSPARC III
750
$9,950
All systems have similar configurations – price variations due to expandability,
expensive disks/memory/processor/OS, commoditization
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Server Prices
System
CPUs
Price
IBM xSeries 370 c/s
280 Pentium III
$15.5 M
Compaq AlphaServer GS 320
32 Alpha 21264
$10.3 M
Fujitsu PRIMEPOWER 20000
48 SPARC64 GP
$9.7 M
IBM pSeries 680 7017-S85
24 IBM RS64-IV
$7.5 M
HP 9000 Enterprise Server
48 HP PA-RISC 8600
$8.5 M
IBM iSeries 400 840-2420
24 iSeries400 Model 840
$8.4 M
Dell PowerEdge 6400
3 Pentium III
$131 K
IBM xSeries 250 c/s
4 Pentium III
$297 K
Compaq Proliant ML570
4 Pentium III
$375 K
HP NetServer LH 6000
6 Pentium III
$373 K
NEC Express 5800/180
8 Pentium III
$683 K
HP 9000/L2000
4 PA-RISC 8500
$368 K
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