How much does a card cost ATI/nvidia?

[zainali]

the top of the line cards retail for 500 bucks. How much does it cost for ati/ nvidia to make their cards?

 

[Confused]

You've got to think of the R&D costs, costs for getting the tooling/equipment to make the newer and better cores, plus employee's wages who design/make it.

Plus there's all the other components on the card, such as memory, connectors, the boards themselves, they all cost money for whoever's making the board (not the chip, but the actual board with everything on it) and their R&D etc

 

[ElFenix]

variable costs are dirt cheap. the sunk costs are what gets most of the money.

 

[d0wnthe11235813]

i would guess it costs around 50 bucks to make a card. only guessing buy how much old technology costs like geforce 3's and 7500's

 

[Lonyo]

I read something about $17 per chip not that long ago.

 

[0roo0roo]

mostly r&d, and the facilities to make it. cutting edge is expensive.

 

[Noriaki]

Actual fab costs are usually on the order of a few 10s of dollars, to create the physical chips and boards and put it all togheter if that's what your asking.

There are lots of other costs though, and Confused outlined a number of those.

A lot of the cost for really top end cards is just the premium you pay to have the best.

They have to recoup marketting, R&D, wages and so on, and in addition they need some profit margin. But the difference between a Radeon 9500 and 9700 for example, is that you pay a premium for the best, profit margins are much much hgiher on those cards, and they can regain mroe R&D money of the top ends.

And of course, there is always good old basic economics theory, Supply & Demand that helps set the prices for these cards.

 

[JulesMaximus]

Originally posted by: Confused
You've got to think of the R&D costs, costs for getting the tooling/equipment to make the newer and better cores, plus employee's wages who design/make it.

Plus there's all the other components on the card, such as memory, connectors, the boards themselves, they all cost money for whoever's making the board (not the chip, but the actual board with everything on it) and their R&D etc

It's called overhead. The actual cost to make the chips isn't very much and board stuffing is also very inexpensive-especially if you outsource it. I used to work for a semiconductor manufacturing company and the cost is very low. You are paying for the R&D-EEs make good money and good EEs are hard to come by (maybe not so much now as a few years ago though). We used to pay $60-70k for first year EEs plus big signing bonuses, stock options etc. Once the R&D work is done and the processes are more efficient and yield from the wafers are higher the cost of the end product decreases which is why older cards are so cheap compared to the newer ones.

I would say $40-50 per card in parts & labor to make it though.

 

[dexvx]

Originally posted by: Noriaki
Actual fab costs are usually on the order of a few 10s of dollars, to create the physical chips and boards and put it all togheter if that's what your asking.

Few 10s of dollars? I'm sure thats not even close. The actual chip might cost ~$20ish to fab. But the memory is a solid price. 256MB DDR running at 700Mhz costs a crapload. Considering a stick of 256MB DDR 500 costs well over $100 at retail.

 

[JulesMaximus]

Originally posted by: dexvx

Originally posted by: Noriaki
Actual fab costs are usually on the order of a few 10s of dollars, to create the physical chips and boards and put it all togheter if that's what your asking.

Few 10s of dollars? I'm sure thats not even close. The actual chip might cost ~$20ish to fab. But the memory is a solid price. 256MB DDR running at 700Mhz costs a crapload. Considering a stick of 256MB DDR 500 costs well over $100 at retail.

Yes but the cost to actually make the memory chips themselves isn't very much. Again it comes down to wafer yield and how they test to determine speed (same with cpus). They yield fewer fast chips so they are more expensive. I would bet that the $100 memory stick you are quoting probably cost $20 to make and the memory chips themselves (which is what is on a video card) are only a couple bucks a piece.

 

[rbV5]

Yes but the cost to actually make the memory chips themselves isn't very much

ATI nor NVidia make memory chips, so what difference does it make how much it costs to make them? They have to buy them. Those $500 cards are not costing them $50 to manufacture, the margins are much slimmer than that.

 

[JulesMaximus]

Originally posted by: rbV5

Yes but the cost to actually make the memory chips themselves isn't very much

ATI nor NVidia make memory chips, so what difference does it make how much it costs to make them? They have to buy them. Those $500 cards are not costing them $50 to manufacture, the margins are much slimmer than that.

I know that. Still, they aren't paying $100 for the memory they stick on those cards. I'm still going to say that most of the cost is in R&D. I used to work for a semiconductor manufacturing company and the chips we sold for $15-20 cost us around $1.70 to make. The $60-70 chips cost us $15 to make. The margins are that great in this industry and most of the cost is in R&D. Those 4 or 8 little memory chips on your video card can't cost ATI more than a few bucks a piece. Even if ATI pays $10 each that would only raise the total cost of the card to around $100.

Hell, the company I worked for didn't make the wafers. We bought them from Sony. We didn't even cut them or package them. All we did was design them and test them before we sent them out to the companies who bought them from us.

 

[Noriaki]

I was discluding cost of memory chips, sorry for the confusion.
But the fact that a 256MB DDR500 costs well over $100 has no impact on how much ATi or nVidia pays for them.
Firstly there is PCB and other physical parts cost in there that ATi and nVidia don't pay, they don't pay the cost to put the chips onto the PCBs either, and there is all kinds of other costs that knock the price of that memory up just like they do for video cards.

My 10s of dollars number was discluding memory cost though, sorry I didn't make the clearer.

And yes margins are a lot slimmer than that, but the fab cost is only a tiny portion of the final cost of the card.

There are R&D costs, marketting costs, employee wages, distribution costs, capital equipment costs. And the final price you see on retail shevles isn't what ATi or nVidia sell them to the wholesalers for anyways, you have several steps before they get to store shelves, and every step adds a % for profit for that person.

None of that has any effect on how much it costs to physical create the card, but they all heavily influence final price.

 

[JulesMaximus]

The markup from the retailer is typically 20-30%. Might be a little lower on something like computer hardware though-I'm not sure. So, ATI/nVidia will sell a card that costs you $500 to the retailer for around $400. They might give better deals to companies who buy in larger quantities also. I would expect that big retailers like Best Buy, CompUSA etc get the best prices but they also have the highest markup. The margins are probably slimmer for a company like say newegg.com.

Fact is we are all just speculating on what the cards might cost. It is a moot point anyway.

 

[Le Québécois]

I know someone who work at Matrox and he told me the first 20 parhelia to get out cost about 20000$CAN to matrox since they need to ajuste the building process...after that i get way more cheaper to make.