By: someone (someone.delete@this.somewhere.com), February 3, 2013 1:44 pm
Room: Moderated Discussions
Richard Cownie (tich.delete@this.pobox.com) on February 2, 2013 6:07 pm wrote:
> Richard Cownie (tich.delete@this.pobox.com) on February 2, 2013 5:05 pm wrote:
>
> > Other than Apple and Samsung, those other companies are barely making a profit.
> > So yes, they'll buy their SoC's from a variety of suppliers, but I think not
> > at margins that would look attractive to Intel if the products have to come from
> > near-leading-edge fabs. They can't afford it.
>
> A few estimated numbers:
> Tegra 3 is about 80mm2, I've seen ASP estimated at $21
> Estimated Intel laptop CPU ASP - $94
> dual-core Ivy Bridge + GT1 die size - 94mm2
> Medfield die size estimated 62mm2
>
> The laptop ASP include dual and quad chips, so maybe the duals are only $60.
> That would imply ASP of $60/94mm2 = 0.64 $/mm2
>
> To match that, Medfield would need ASP of 62*0.64 = $39.68
>
> I don't see how that works when a high-end competitive ARM-based chip
> is about half that price. And as far as I can see, it isn't working.
>
When an ARM chip is sold that revenue pays for TWO corporate overheads,
the OEM's and the wafer foundry's. The latter are not charities, they are in the
business to make money and they do. For example in Q4 TSMC's gross margin
was 47%, not a great deal less than Intel's at 58%. ARM OEMs have to operate
in a crowded field with little room to maneuver between low ASP they get and
the healthy, nearly Intel-like margins they pay to their foundry. They also have
to pay a percent or two of ASP to ARM Holdings in royalties straight from their
bottom line on top of that.
ARM OEMs operate at lower ASP than Intel but still have to pay their share of
all the wafer fab capital expenditure and process development costs of their
foundry plus a healthy margin on top of that. When Intel sells an Atom ALL of
the money stays in house, including gross margin on finished wafers.
It is hilarious to hear folks claiming Intel and x86 are doomed because of its
huge overhead of fabs etc. Apparently they think ARM silicon is made in fabs
and processes subsidized by the tooth fairy or easter bunny or something.
> Richard Cownie (tich.delete@this.pobox.com) on February 2, 2013 5:05 pm wrote:
>
> > Other than Apple and Samsung, those other companies are barely making a profit.
> > So yes, they'll buy their SoC's from a variety of suppliers, but I think not
> > at margins that would look attractive to Intel if the products have to come from
> > near-leading-edge fabs. They can't afford it.
>
> A few estimated numbers:
> Tegra 3 is about 80mm2, I've seen ASP estimated at $21
> Estimated Intel laptop CPU ASP - $94
> dual-core Ivy Bridge + GT1 die size - 94mm2
> Medfield die size estimated 62mm2
>
> The laptop ASP include dual and quad chips, so maybe the duals are only $60.
> That would imply ASP of $60/94mm2 = 0.64 $/mm2
>
> To match that, Medfield would need ASP of 62*0.64 = $39.68
>
> I don't see how that works when a high-end competitive ARM-based chip
> is about half that price. And as far as I can see, it isn't working.
>
When an ARM chip is sold that revenue pays for TWO corporate overheads,
the OEM's and the wafer foundry's. The latter are not charities, they are in the
business to make money and they do. For example in Q4 TSMC's gross margin
was 47%, not a great deal less than Intel's at 58%. ARM OEMs have to operate
in a crowded field with little room to maneuver between low ASP they get and
the healthy, nearly Intel-like margins they pay to their foundry. They also have
to pay a percent or two of ASP to ARM Holdings in royalties straight from their
bottom line on top of that.
ARM OEMs operate at lower ASP than Intel but still have to pay their share of
all the wafer fab capital expenditure and process development costs of their
foundry plus a healthy margin on top of that. When Intel sells an Atom ALL of
the money stays in house, including gross margin on finished wafers.
It is hilarious to hear folks claiming Intel and x86 are doomed because of its
huge overhead of fabs etc. Apparently they think ARM silicon is made in fabs
and processes subsidized by the tooth fairy or easter bunny or something.