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On Wed, 10 Sep 2003 14:21:56 GMT, "Hank Oredson"
wrote: "CJT" wrote in message ... snip It just seemed to me that selling at far below cost to capture sales is a market distortion that might attract some sort of attention. Every new processor is sold far below cost. Particularly the very first unit sold. It would be *really* interesting to know anything hard at all about the what the cost of manufacture (not including R&D) for Itania would be if Intel ever got up to decent size production runs (could we skip the obligatory comments on that, just this once?). Off-hand comments from someone who should know suggest that the heat sink is a significant cost-contributor for Madison. Since Deerfield consumes about 60 watts as opposed to the 160 watts for Madison, the bottom line cost of manufacture for Deerfield has to be significantly less than for Madison. Intel can probably afford practically to give away Deerfields. It might even want to, but irrespective of any laws, they can't afford to distort the established market for their high-end Xeons, and I suspect that's how the price was really set--just high enough so that Deerfield isn't an attractive competitor for Xeon. Aside from workstation users who really need the bigger address space and who for one reason or another can't or won't buy an Opteron, the only people who will be buying Deerfields are people who are buying them for evaluation or development. I can't imagine that the buyers who always want the best and the fastest would be interested in a Deerfield. RM |
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On Wed, 10 Sep 2003 10:59:18 -0400, Robert Myers
wrote: On Wed, 10 Sep 2003 14:21:56 GMT, "Hank Oredson" wrote: Every new processor is sold far below cost. Particularly the very first unit sold. It would be *really* interesting to know anything hard at all about the what the cost of manufacture (not including R&D) for Itania would be if Intel ever got up to decent size production runs (could we skip the obligatory comments on that, just this once?). I would concur with Keith's earlier guess that it's probably around $75. Maybe $100, but probably no more than that. Off-hand comments from someone who should know suggest that the heat sink is a significant cost-contributor for Madison. Since Deerfield consumes about 60 watts as opposed to the 160 watts for Madison, the bottom line cost of manufacture for Deerfield has to be significantly less than for Madison. Madison may be a hot running chip, but it's no where near THAT hot. The top-end Madison at 1.5GHz and 6MB of L3 cache has a maximum power consumption of about 110W. Intel currently specifies that motherboards and power supplies should be capable of up to 130W to support future Itanium2 chips, but none of the current chips consume that much. Deerfield, on the other hand, consumes 91W of power at 1.4GHz. The Low Voltage Itanium2 (1.0GHz Deerfield, 1.5MB L3) is listed as having a maximum power consumption of 55W in the datasheets and 62W everywhere else (including on Intel's own marketing material), so I'm not quite sure what's going on there. It could be that the 62W is a maximum theoretical power consumption while the 55W is a maximum real-world power consumption, or that the 62W number is leaving a bit of wiggle-room for future processors. Either way, when you get right down to it, I really doubt that the heatsink plays much of a role to the cost of the processor. Even quite a large heatsink is only going to cost you about $10 when you get them manufactured under contract. Intel can probably afford practically to give away Deerfields. It might even want to, but irrespective of any laws, they can't afford to distort the established market for their high-end Xeons, and I suspect that's how the price was really set--just high enough so that Deerfield isn't an attractive competitor for Xeon. I'm not sure that Intel is too worried about stealing sales from Xeon at this point in time. After all, the Xeon has a competitor that runs the same software (Opteron), while if people switch to Deerfield, they are then locked into IA-64 software which is Intel-only. However Intel does still want to make some profit on this Deerfield chip, since they haven't come anywhere close to recouping their costs on IA-64 yet. Aside from workstation users who really need the bigger address space and who for one reason or another can't or won't buy an Opteron, the only people who will be buying Deerfields are people who are buying them for evaluation or development. I can't imagine that the buyers who always want the best and the fastest would be interested in a Deerfield. The Deerfield is squarely targeted at the workstation market. I don't think Intel has any plans to sell this chip in desktop systems for Joe-six-pack. People will buy Deerfield for workstations if they need the address space and either a.) the software is there for the Itanium but not for Opteron, or b.) HP offers a more compelling Deerfield workstation than what other companies are offering in Opteron workstations. -------------- Tony Hill hilla underscore 20 at yahoo dot ca |
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On Wed, 10 Sep 2003 08:07:06 -0400, Alex Johnson
wrote: Tony Hill wrote: 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 : Given that intel came out and said (last year) that they spent over a billion dollars (close to $2B) up to that point, I have to agree with you that your measurement is pessimistic. You are suggesting they spent more than $3B in a single year where they spent under $2B in the previous 8 years. I've seen numbers that said they had spent $2 billion by 2001, but this seems like a very low number to me, and I suspect it doesn't take into count any costs associated with producing the chips, testing, optimizing and especially the costs to market the processor. There are a lot of associated costs, and I can't imagine that Intel managed to fit all of those into only $2 billion in 7 years of development. Of course, since 2001 they have spent more money still, I would guess at a rate of about $1 billion a year. Regardless, even if we assume that they've ONLY spent $2 billion on the Itanium so-far, they still are not even remotely close to breaking even on sales so far. -------------- Tony Hill hilla underscore 20 at yahoo dot ca |
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Tony Hill wrote:
I've seen numbers that said they had spent $2 billion by 2001, but this seems like a very low number to me ??? $2B is not a small amount of money. Considering what most companies spend on chip development $2B would be unmanageable. While intel is horrendously wasteful, I can't think that $2B would not be a large enough estimate. and I suspect it doesn't take into count any costs associated with producing the chips, testing, optimizing and especially the costs to market the processor. There are a lot of associated costs, and I can't imagine that Intel managed to fit all of those into only $2 billion in 7 years of development. Manufacturing is not that expensive (okay a few hundred thousand to a million per stepping, but that won't add up much since they've only sent Merced, McKinley, and Madison to manufacturing and all of these shipped in a tenth the steppings that Pentium 4 did). Testing is included. I don't know what optimizing you refer to, but payroll of compiler teams and such was included. Marketting. You make me laugh! They've only been advertising 2 years and they spent only $10,000,000 the first and busiest year (compared to $2 Billion a year for Pentium 4). Of course, since 2001 they have spent more money still, I would guess at a rate of about $1 billion a year. Where could they put the money? 2002 featured only one chip (a simple shrink) going to manufacturing, very limited advertising, and fewer projects under way than 2001. Regardless, even if we assume that they've ONLY spent $2 billion on the Itanium so-far, they still are not even remotely close to breaking even on sales so far. But this point is not in contention. It's a good thing some people have long term vision. Alex -- My words are my own. They represent no other; they belong to no other. Don't read anything into them or you may be required to compensate me for violation of copyright. (I do not speak for my employer.) |
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"Alex Johnson" wrote in message
... Manufacturing is not that expensive (okay a few hundred thousand to a million per stepping, ...Testing is included. Alex, the outsourced mask costs alone are $1 million for each stepping. I suggest you revize your estimate upwards. WAY upwards! |
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"Felger Carbon" wrote in news:2TL7b.6423$PE6.2870
@newsread3.news.pas.earthlink.net: "Alex Johnson" wrote in message ... Manufacturing is not that expensive (okay a few hundred thousand to a million per stepping, ...Testing is included. Alex, the outsourced mask costs alone are $1 million for each stepping. I suggest you revize your estimate upwards. WAY upwards! That's $1M for a full mask set on 130nm. It was much cheaper on 180nm, where most of the Itanium steppings have been, and typically you don't need a full mask set per stepping of the same die. So I'd say Alex was pretty close. |
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#29
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In article 8sG7b.133325$0v4.9765458@bgtnsc04-
news.ops.worldnet.att.net, says... It just seemed to me that selling at far below cost to capture sales is a market distortion that might attract some sort of attention. Every new processor is sold far below cost. Particularly the very first unit sold. ....and Itanic is going to make it up in "volume". ;-) -- Keith |
#30
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