How much does it cost to make a CPU?

[Muerto]

With CPU prices coming down so fast I'm wondering how Intel and especially AMD are able to make a profit. How much do they actually pay to manufacture a single CPU? It must be pretty damn cheap if they can cut prices this much. Thanks.

 

[The Stigenator]

the price of the cpu is not much, depends on what you are manufacturing and what size die and how many transistors..
basically how complex.

Normally a IC-555 chip costs about $3.00 at radio shack is produced for about $.10
What actually costs in the chip making business is people and equipment.. I am quite sure the AMD Duron 600's dont cost more than $5.00 to make per peice.

they dont make one chip at a time. The original wafer holds about 100 chips and that is broken down to individual ones.

 

[Rigoletto]

I don't know but I do know that you can divide costs into two parts: the process and development costs.
Development and testing for a new chip must be expensive and only AMD knows when they have recouped it.
I would guess AMD are not making money from the price cuts, and dominating Intel instead for the moment.

 

[NaughtyusMaximus]

Rigoletto, I think the same thing. I expect that AMD is lowering prices to try and get some brand recognition before Intel gets the PIV out.

 

[AndyHui]

Research and development, or just the materials going into the CPU?

R&D is VERY expensive.....design, testing, debugging.....that costs millions of dollars.

Just the materials, I would assume doesn't cost that much. Definitely less than $20, if you do not include stuff like packaging and that sort of thing.

 

[hominid skull]

Don't forget the price to have the FABrication plant, i think the one AMD has at Dresden cost in the region of $2bn to build. Like Andi said R&D is another big part.

 

[AngelOfDeath]

NaughtyusMaximus: I do not agree with you 'cause AMD has for a long time -years, had the cheapest cpus on the market. Ofcourse there is the issue of competition, but Intel have their name and reputation, so without knowing this for a fact I do believe that we customers pay a lot for the brand name itself. It's just my opinion, no facts.

AoD

 

[utopia]

Facts: A PIII costs $40 to produce, Athlon is around $35, P4 will be arouns $80 (huge 207mm die). Each chip has to be "burnet in" for days, and pass several "expensive" tests.

 

[AngelOfDeath]

Utopia: How did you come up with these numbers?. And when you say Burn-in do you mean that they test them for functionality and how high Mhz they are able to do??.

AoD

 

[utopia]

<< How did you come up with these numbers? >>



I know a few people who work for Intel/AMD/etc, but its no big secret, even some Tech-news sites have published things like this. High-grade silicon is very, very expensive, and each core must be inspected several times by a human, and not a machine.



<< And when you say Burn-in do you mean that they test them for functionality and how high Mhz they are able to do??. >>



Its a little more complex, but basically yes

 

[EvilDonnyboy]

basically its like games. it costs .10 to make the cd itself, but millions to develop the game.

 

[Stealth1024]

R&amp;D will get you every time. That's why you become a company like Microsoft! Heck with innovation... we'll pirate the ideas we need...