How much does Intel spend on chip manufacturing?


We wont get exact value of manufacturing costs as these costs are proprietary. But a rough estimate can be made based on the cost of silicon wafer which is the highest value ingredient in  the chip. A typical 300 nm silicon wafer cost range from 300$ to 700$ which can be estimated as 500$ on average. And around 300-400 chips can be manufactured from one such wafer roughly. If all other costs are included the manufacturing cost based on raw materials may be around 3 to 5 dollars. But all the chips wont make it out into the market because of strict quality checking. So if half of the manufactured processors are claimed by god, the cost may sore upto 10$. Taking all the depreciation costs, employee salary and wages into consideration an estimate of 30$ to 40$ can be made.
Keep in mind that you spend somewhere around 200$ to 300$ for a mid range processor like Intel i5, isn’t this estimate surprising? It is true that these companies like Intel, AMD etc. do make a lot of profit but most of the profits go to Research and Development costs which are huge. An estimate can be roughly made that the manufacturing cost can double itself to around 80$ to 100$ given these costs are taken into account. Companies spend much of the money on these costs due to constant competition from its rivals. So competition is responsible for their new innovations. Aren’t you thinking about the profits made by these companies now?


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s