You seem to be confused.Originally posted by: chizow
That's absurd to think NV's costs are static, you think those SUVs selling for 40% less than a year ago aren't being sold for a profit still? There's just much, much less profit going around and even at break even or a slight loss, its better than not selling anything.Originally posted by: Janooo
The cost for NV does not change. It was $100+ in the beginning. When yields improve then it will go down.
Now when I think about that the cost can not be less then wafer/number of chips. It's 5K/100 chips, about $50 per chip at 100% yield. I doubt they will achieve 100% yield.
NV needs the shrink to lower the cost as soon as possible.
Similarly with chip pricing, if NV approaches TSMC with 2 scenarios, $100 a chip based on $649 pricing or $60 a chip based on $449 pricing but selling 5x as many units, which do you think they're going to choose? The difference in cost to them is some glass.
People have been saying these monolithic chips from NV can't possibly be selling for a profit due to low yields and # per wafer, but that clearly has not been the case with G80 and with GT200 we're seeing just how low NV can go on pricing while still managing to break-even.
TSMC does not care how much NV is going to ask for a chip when they sell it. TSMC wants to make money. They tell NV a wafer is $5K. TSMC has own bills to pay and they know that they need to get $5K to make some money. I am sure that both companies have a contract and it includes pricing. The price between TSMC and NV is set.
If one wafer contains 100 chips then at 100% yield the lowest cost of a chip is $50. It can not be lower. This is only manufacturing cost of one chip.
In the beginning the yields were about 40%. That's why the cost was $100+. We don't know the current yields so it's very difficult to say what is the cost at the moment. As you can see it's somewhere between $50-$100. It can not be less then $50 though.
Now, let's assume that R&D of GT200 chip cost $10M. If NV sells 1M of chips then they need to add $10 to a chip in order to break even. I just made up $10M but you get the picture. If they sell only 0.5M then the cost to break even would be $20 on top of manufacturing cost. If they sell 2M then the cost to break even is $5 on top of the manufacturing cost.
R&D and manufacturing are the biggest/most visible costs. The shrink and yields lower manufacturing cost per chip. Higher sales lower the R&D cost per chip.
They are far far far away from breaking even. There is no way they sold enough GT200's to break even in 5-6 weeks. The lower price means that NV will wait longer in order to break even. If they lowered the price to much then the break even point is not guaranteed.Originally posted by: chizow
with GT200 we're seeing just how low NV can go on pricing while still managing to break-even.
I hope this helps.