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New Itanium chips cost just $744



 
 
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  #1  
Old September 9th 03, 04:37 AM
Yousuf Khan
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Default New Itanium chips cost just $744

The new low-cost, low-power "Deerfield" Itanium 2 chips released today are
the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while the
1.4Ghz costs $1172:

http://story.news.yahoo.com/news?tmp...08/tc_nf/22235

Yousuf Khan


  #2  
Old September 9th 03, 05:20 AM
CJT
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Yousuf Khan wrote:

The new low-cost, low-power "Deerfield" Itanium 2 chips released today are
the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while the
1.4Ghz costs $1172:

http://story.news.yahoo.com/news?tmp...08/tc_nf/22235

Yousuf Khan


What fraction do you suppose that is of what it costs Intel to make them?

  #3  
Old September 9th 03, 05:34 AM
Stacey
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CJT wrote:

Yousuf Khan wrote:

The new low-cost, low-power "Deerfield" Itanium 2 chips released today
are the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while
the 1.4Ghz costs $1172:


http://story.news.yahoo.com/news?tmp...08/tc_nf/22235

Yousuf Khan


What fraction do you suppose that is of what it costs Intel to make them?


Including R&D, the manufacturing line, the office help, insurance, power
bills etc or just what the bit of a silicon wafer costs?
--

Stacey
  #4  
Old September 9th 03, 06:16 AM
Yousuf Khan
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Default

"CJT" wrote in message
...
Yousuf Khan wrote:

The new low-cost, low-power "Deerfield" Itanium 2 chips released today

are
the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while

the
1.4Ghz costs $1172:


http://story.news.yahoo.com/news?tmp...08/tc_nf/22235

Yousuf Khan


What fraction do you suppose that is of what it costs Intel to make them?


Considering the low volumes and the billions of dollars spent in developing
it, I'd say Intel is probably losing money on it. :-)

Yousuf Khan


  #5  
Old September 9th 03, 06:54 AM
Rob Stow
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Default

Yousuf Khan wrote:

"CJT" wrote in message
...

Yousuf Khan wrote:


The new low-cost, low-power "Deerfield" Itanium 2 chips released today


are

the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while


the

1.4Ghz costs $1172:



http://story.news.yahoo.com/news?tmp...08/tc_nf/22235

Yousuf Khan



What fraction do you suppose that is of what it costs Intel to make them?



Considering the low volumes and the billions of dollars spent in developing
it, I'd say Intel is probably losing money on it. :-)

Yousuf Khan



I remember reading something when the first Itaniums became available
the claimed Intel would need to sell about 2 to 3 million chips
in order to recover the R&D costs and the fab costs. The same article
also mentioned that Intel only /expected/ to sell about 750,000. In
other words, Intel didn't expect to make a profit out of Itanic -
they just expected Itanic to be just a stepping stone to something
else that /would/ bring in the big bucks.

As well, I wonder how much of the R&D costs for Itanic are being
recovered from other Intel products? Surely to god a lot of the
research work done to create Itanic would be of benefit to other
things Intel is/was working on ?

  #6  
Old September 9th 03, 07:06 AM
CJT
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Default

Rob Stow wrote:

Yousuf Khan wrote:

"CJT" wrote in message
...

Yousuf Khan wrote:


The new low-cost, low-power "Deerfield" Itanium 2 chips released today



are

the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while



the

1.4Ghz costs $1172:



http://story.news.yahoo.com/news?tmp...08/tc_nf/22235


Yousuf Khan



What fraction do you suppose that is of what it costs Intel to make
them?




Considering the low volumes and the billions of dollars spent in
developing
it, I'd say Intel is probably losing money on it. :-)

Yousuf Khan



I remember reading something when the first Itaniums became available
the claimed Intel would need to sell about 2 to 3 million chips
in order to recover the R&D costs and the fab costs. The same article
also mentioned that Intel only /expected/ to sell about 750,000. In
other words, Intel didn't expect to make a profit out of Itanic -
they just expected Itanic to be just a stepping stone to something
else that /would/ bring in the big bucks.

As well, I wonder how much of the R&D costs for Itanic are being
recovered from other Intel products? Surely to god a lot of the
research work done to create Itanic would be of benefit to other
things Intel is/was working on ?


Assuming they sell overseas, at what point (if any) does selling far
below cost become "dumping" and perhaps cause problems with, e.g.,
the WTO?

  #7  
Old September 9th 03, 02:04 PM
chrisv
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Default

On Tue, 09 Sep 2003 06:06:43 GMT, CJT wrote:

As well, I wonder how much of the R&D costs for Itanic are being
recovered from other Intel products? Surely to god a lot of the
research work done to create Itanic would be of benefit to other
things Intel is/was working on ?


Assuming they sell overseas, at what point (if any) does selling far
below cost become "dumping" and perhaps cause problems with, e.g.,
the WTO?


Don't think you could make a case for that. I mean, they didn't
intend on it being an unpopular, money-losing product. Plus, it's one
thing when you lost your money on R&D (fixed costs), quite another
when you are selling it for below what it costs to make them (varible
costs).



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  #9  
Old September 9th 03, 04:13 PM
Robert Myers
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Default

On Tue, 09 Sep 2003 06:06:43 GMT, CJT wrote:

snip

Assuming they sell overseas, at what point (if any) does selling far
below cost become "dumping" and perhaps cause problems with, e.g.,
the WTO?


If manufacturers were not permitted to introduce new products and sell
them at a loss, we'd be stuck in a world with practically no new
products.

In order to show that Intel was "dumping" Itaniums, you'd have to show
that someone was losing business because of it, and that would be a
very tough sell. The only people who are going to buy Itaniums are
people who, for one reason or another, need a chip like Itanium.

At this point, I think Intel would be happy enough just to get the
chips out there so people will write software for them and get used to
using them.

RM
  #10  
Old September 10th 03, 01:57 AM
Tony Hill
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Default

On Tue, 09 Sep 2003 05:16:39 GMT, "Yousuf Khan"
wrote:
"CJT" wrote in message
...
Yousuf Khan wrote:

The new low-cost, low-power "Deerfield" Itanium 2 chips released today

are
the cheapest in the Itanium family ever. The 1.0Ghz costs $744, while

the
1.4Ghz costs $1172:


http://story.news.yahoo.com/news?tmp...08/tc_nf/22235

Yousuf Khan


What fraction do you suppose that is of what it costs Intel to make them?


Considering the low volumes and the billions of dollars spent in developing
it, I'd say Intel is probably losing money on it. :-)


Yup, Intel's only sold roughly 20,000 Itanium chips TOTAL since it's
introduction, that's counting every different model they've released.
Given a rough estimate of around $5 billion to develop, manufacturer,
test and market the Itaniums (this is probably a low estimate),
they're looking at a per-chip cost of somewhere on the order of
$250,000 per chip :

Ok, that's perhaps a bit of a pessimistic view-point on things, but I
think it's VERY safe to say that Intel has not come anywhere close to
recouping their costs on the Itanium yet, and nor are they likely too
unless sales volumes pick up real soon. Part of the problem is that
essentially only one vendor is selling Itanium-based systems. Last
quarter they only managed to sell 3,250 chips total, but HP made up
roughly 98% of those sales.

--------------
Tony Hill
hilla underscore 20 at yahoo dot ca
 




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