Let me tell you a little secret that Intel and AMD do not want people to know. The truth is the actual cost (once everything is set up which it is) to make a chip is about 3 to 4 cents (now this was in 2000). Trust me I know someone on the inside that broke it down for me. I was shocked. I don’t believe the actual cost has gone up to much 10 cents at the most. 99% of the people DO NOT know this. I can see why...
“Let me tell you a little secret that Intel and AMD do not want people to know. The truth is the actual cost (once everything is set up which it is) to make a chip is about 3 to 4 cents...”
No way this is true today except possibly for small, surface mounted small scale IC’s. Just in raw silicon surface area, these processors cost more than that. And, of course, bottom line is, they are “highly processed sand”...with about $10 billion involved in the processing.
Sorry but your source has no idea what it costs to build a microprocessor.
It also costs $2B to build a fab capable of building 32nm processors.
So how do they recover the cost for a multi billion dollar fabrication plant?
With the facility costing $2 billion to build? Don’t think so.
Wow! Why don't you start making chips and selling them for $1 each! You could make a fortune!
I can believe it, if the "cost" you are quoting is the cost of making one additional chip, over and above the planned production run. But that is a funny number, because it does't allow anything for the cost of preparing to make a major production run of chips and it doesn't include the cost of designing the chip in the first place. In reality the cost of a production facility and the cost of designing, developing, and testing the chip should predominate in the equation for the profit a chip maker makes.The marginal cost of producing an additional chip, IOW, is an interesting number but not one you want the chipmaker to obsess over because the logic of that calculation is to never develop another new chip, but milk the profit from the last chip you ever design and set up a fab for. If you would have been happy to have stuck with the Apple II since 1982, IOW, you could be getting essentially free computers by now.
And that is precisely what socialism will do "for" you, if you let it. ObamaCare, at best, is 2010 health care forever - no expenditures on new developments in drugs or surgery. So, at best, it does nothing much initially but in 2020 it requires that the standard of care you get isn't any better than it was in 2010. And that's at best. In reality, a decision to focus only on cost and nothing to do with quality is a decision to not merely stagnate in quality but to allow quality to deteriorate.
That maybe what is costs to make that extra chip. Lot’s of companies have gone broke pricing on the margin.