
How the SoC Is Displacing the CPU - hunglee2
https://medium.com/@magicsilicon/how-the-soc-is-displacing-the-cpu-49bc7503edab#.z2n19ipfm
======
ksec
I have always wondered on those SoC prices. That Apple SoC price is basically
what Apple paid to TSMC for using leading edge node Fab price. Which already
includes the cost of TSMC operation and profits. But for Apple, does it
include all the cost up front for design and testing those SoC, which should
be in 100s of millions. Does it include ARM, IMG, and other Licensed IP?
Qualcomm would have the same cost just as Apple, the different would be Apple
not making any margins on SoC, but Qualcomm needs to ( much helped by their
inclusion of Modem ) My main question is, how is it When a $20–30 dollar SoC
manage to have many companies behind them thriving, while Intel’s Pentium,
Core M etc have an ASP, lets assume $100. ( Retail have their margin, and
Intel sell big lot to OEM, but I still think that is a low estimate ) Intel is
earning 20–50x the margin then all of those SoC combined. ( Assume Qualcomm
make $2 on a $25 SoC, Intel would likely earn $80–90 on $100 chip, as they
earn everything Qualcomm, ARM, TSMC etc combined )But Even if you discount the
5:1 mobile SoC to PC volume Intel’s profit still doesn’t reflect that. It
seems, Intel has higher cost structure which I fail to comprehend, any one
could shine some light?

~~~
Cyph0n
1\. Intel CPUs are much more powerful and complex than a typical
Apple/Qualcomm SoC, and so are more difficult to design and more expensive to
manufacture.

2\. Intel has its own internal fabs, which allows them to control the entire
process, but also eats into their margins.

3\. Intel maintains a vast variety of CPUs of different classes (Atom all the
way up to Xeon etc.)

4\. Intel's CPU related R&D expenses are much higher than either Apple or
Qualcomm. On top of this, Intel does a ton of research into process
optimization, materials science, and general circuit design, which obviously
needs funding.

~~~
CountSessine
_2\. Intel has its own internal fabs, which allows them to control the entire
process, but also eats into their margins._

[...]

 _4\. Intel 's CPU related R&D expenses are much higher than either Apple or
Qualcomm. On top of this, Intel does a ton of research into process
optimization, materials science, and general circuit design, which obviously
needs funding._

Isn't this double-accounting? TSMC and Samsung have the same process-related
expenses; indeed Samsung is very close on Intel's heels, process-wise. But
somehow this isn't reflected in SOC price? Again, it doesn't seem to make
sense to me that Intel chips go for around $100 but Qualcomm chips list around
$25.

~~~
Cyph0n
Intel uses its fabs internally and does not allow other companies to use its
process, unlike Samsung.

Again, an ARM SoC running in a power-constrained phone is nothing compared to
a desktop-grade processor when it comes to complexity. I think you're
underestimating what's on a modern Intel chip.

~~~
astrodust
This "complexity hole" is a problem they've encountered before with the
Pentium 4 line of chips. They ended up being too complicated and too costly to
produce, so they had to scrap it and go back to the Pentium III design and
iterate from there.

I wonder if they'll ever have to back-track even further and use an ARM core
but add on an x86-64 mode via microcode.

------
arcanus
I was surprised there was no mention of gaming consoles, where a similar
dynamic is playing out with integrated CPU/GPU systems specially designed for
the systen.

------
baybal2
Today we have quad core socs for $4 retail. Your estimates are off. Cost per
wafer is $5k for orders of 10k at 14nm.

Profits of a fab always hover around 30 percents.

~~~
moyta
When poking around for Allwinner H3 docs, I was getting quoted $1.50ea when
ordering 100 or more of the H3 SOC, so quad cores can be had for that. It is
kinda disconcerting to see how far SOCs have fallen in price.

~~~
ksec
Again, exactly this. Mediatek was Cheap and Cheerful. Way too good to be true
to be honest. It was basically eating into Qualcommm lower to mid end market.
( Lucky Qualcomm has it modem integration )Then there comes Allwinner. I have
no idea how money/ profits are being made at these sort of price level.

There has to be trade off somewhere.

~~~
moyta
The H3 is using an older 40nm process and is small in footprint, with no
custom IP. Nothing really too exciting going on there, an 8 year old process
is going to be cheap to use compared to a modern 14nm process.

