The question is: what’s AMDs margin? 20% manufacturing cost maybe well below 1% of the total development cost. So, not a deal breaker at all.
It seems to me that long term having fabs in the IS is net positive for the economy: more jobs, more localized supply chains, more local expertise, etc etc
arcanus · 2h ago
The manufacturing cost is emphatically not only 1% of the total development cost. Particularly for GPUs, the high bandwidth memory and manufacturing costs are a significant portion of the product price.
reliabilityguy · 2h ago
> The manufacturing cost is emphatically not only 1% of the total development cost.
I have no idea what is the manufacturing cost of a 800 mm^2 die is, but I am sure it is lower than the development cost.
> Particularly for GPUs, the high bandwidth memory and manufacturing costs are a significant portion of the product price.
HBM is not manufactured by the GPU vendor, it is an off-the-shelf component that AMD buys like any other company can. Thus, the cost of HBM is tallied in the BOM and integration costs (interposer, packaging, etc).
bsder · 5h ago
If that's all, that's a really good bargain.
A 20% premium for one of the pillars of a modern economy to both repatriate engineering knowledge as well as be significantly less threatenable by your primary geopolitical enemy would be money very well spent.
nobodyandproud · 23m ago
I definitely agree, but the next challenge is how to support that long-term investment?
Businesses that rely on the chips will see an increase in cost; and that means passing the cost down to their customers (or having less to invest on their own R&D).
Teever · 1h ago
I wonder if that 20% is a floor or a ceiling too.
Like, as more of the supply chain is reshored will that continually increase cost because reshoring is intrinsically less efficient or will it decrease costs because the increased cost of just reshoring the fab part of the supply chain costs more due to less proximity and integration with the existing supply chain?
It seems to me that long term having fabs in the IS is net positive for the economy: more jobs, more localized supply chains, more local expertise, etc etc
I have no idea what is the manufacturing cost of a 800 mm^2 die is, but I am sure it is lower than the development cost.
> Particularly for GPUs, the high bandwidth memory and manufacturing costs are a significant portion of the product price.
HBM is not manufactured by the GPU vendor, it is an off-the-shelf component that AMD buys like any other company can. Thus, the cost of HBM is tallied in the BOM and integration costs (interposer, packaging, etc).
A 20% premium for one of the pillars of a modern economy to both repatriate engineering knowledge as well as be significantly less threatenable by your primary geopolitical enemy would be money very well spent.
Businesses that rely on the chips will see an increase in cost; and that means passing the cost down to their customers (or having less to invest on their own R&D).
Like, as more of the supply chain is reshored will that continually increase cost because reshoring is intrinsically less efficient or will it decrease costs because the increased cost of just reshoring the fab part of the supply chain costs more due to less proximity and integration with the existing supply chain?