When I look at all the moving parts in an HDD, I'm shocked they can still be produced for less.
Did you know that a silicon wafer is a perfect crystal, structured like a diamond? Silicon is right underneath Carbon in the periodic table, which means it shares the same outer electron shell configuration. Making that ain't cheap.
And if one atom is in the wrong place, you have to throw away the chip.
That kind of core expense doesn't exist in a hard drive factory. The disks in a hard drive don't have to be perfect crystals, for example. It's a LOT more expensive to produce chips.
Multiply all the distribution and sales costs, and you'll understand why it's so expensive.
this is certainly the case for CPU
but DRAM & NAND ? this is the typical case of designs where you can add redundancy to accomodate for manufacturing defects.
Now can Intel be more granular than the core level, like running a core with some defect ALU, I really don't know.
What's publicly known from the binning process is that it involves disabling core, reducing total cache size, and finding the maximum working frequency.
The bottom line is that it requires more effort to deal with defects in complex logic, for DRAM they would reduce the total memory size.
If it helps any just think of the costs as buying diamonds.
"Wow that's 16TB of diamonds!"
"this GPU uses a bigger diamond than that GPU"
This is an unhelpful analogy.
Comparing the retail price of diamonds to the retail price of CPUs, RAM boards, and GPUs, I am lead to believe that whatever is used as the substrate for modern high-performance ICs is actually rather cheap. I can -after all- get a reasonably fast combination CPU and GPU for $45.
If we ask the USGS, we discover that in 2003, the price of synthetic diamond suitable for reinforcing saws and drills sold for $1.50->$3.50 per carat. However, large synthetic diamonds with "excellent structure" suitable for -one presumes- processes that rely on the crystal's fine structural properties -just as CPU manufacture relies on silicon wafers with fine structural properties-, sold for "many hundreds of dollars per carat". 
One carat is 200 milligrams. An entire Core i3 appears to weigh 26,800mg . Let's be generous and assume that the CPU die is 1/1000th of that weight, or 268mg, or 1.32 carats. Given that CPU manufacture requires a substrate with excellent structure, just how much of a substance that costs many hundreds of dollars per carat can there be in a 1.32 carat device? (Especially when ones of similar weight constructed with similar materials can be had for $45 per, retail?) :)
I felt that a somewhat detailed analysis of the inappropriateness of the analogy was better than a "Nuh uh! You're wrong!" response.
I can't really dispute that. I'm no expert in the field.
> Just use diamond prices and dimensions.
Isn't that more or less what I did?
Diamond price per gram depends on the quality of the diamond. If we're gonna address an opinion that includes statements like "Think of the cost of a modern high-performance IC as if it was made of diamonds, because diamonds and silicon are both crystalline structures, and silicon is chemically much like carbon, therefore the substrate manufacturing costs are bound to be very similar." , then it seems that we need to look at the cost of high-quality diamonds that are used for their crystalline properties, rather than just for their hardness.
I'm not at all sure, but I would suppose that it would be far more expensive to make one high-quality diamond sheet the size of a silicon wafer than it would be to make a bunch of high-quality diamonds each the size of a CPU die, or maybe cut down a larger one. If it is, then an analysis based just on like-sized crystals would be dramatically unfair. Perhaps you know far more about this than I do? Industrial crystal production is not exactly in my wheelhouse. :)
 Direct quote: "Did you know that a silicon wafer is a perfect crystal, structured like a diamond? Silicon is right underneath Carbon in the periodic table, which means it shares the same outer electron shell configuration. Making that ain't cheap." via 
That post was wrong about that being a driver of costs, and it's not fruitful to build on that wrongness.
An analogy that leads you to the right conclusion for the wrong reason is a toxic thing.
To speak to the rest of your comment:
mozumder made an incorrect argument and backed it up with a dangerously misleading analogy. I attacked the analogy by demonstrating its inappropriateness.
In my most recent post, I have attacked his argument with an analysis of what appear to be the actual costs of the thing he's talking about.
Add in processing costs and it really becomes a mess.
So, yes, wafer costs matter when you have to produce tons of silicon for an SSD.
This  seems to indicate that in mid 2009, one could get a 300mm silicon wafer for -worst case- ~$120.
Likely usable wafer area: 90,000mm^2
Largest Intel i3 processor (Haswell) die area: 181mm^2
Max dies per wafer: 497
Silicon wafer cost per die:
* Assuming 0% defect rate: $0.24
* Assuming 50% defect rate: $0.48
* Assuming 99% defect rate: $30.00
Cheapest (Celeron) Haswell on sale at Newegg today: $44.99. Average i3 Haswell price: $140. 
Unless Reuters is misinformed, or wafer costs have exploded in the past six years, the cost of the wafer truly does appear to be insignificant, even if we assume that wholesale prices are 50% of retail prices.
 This seems unlikely, as memory and chip costs haven't exploded in the past six years.
Consider the $0.24/die, and multiply that by 100 to get a 1 TB SSD drive.
Your SSD now has a minimum cost of $24, just for the silicon. That's extremely expensive. You can never sell your SSD for cheaper than that, just to cover the silicon costs of a 1TB drive, never-mind processing, manufacturing, distribution, sales, and profit. And you're competing against 5TB hard drives that sells for $100. (the 16TB SSD meanwhile apparently uses 500 chips..)
This is why wafer costs are like diamonds, instead of aluminum platters.
This sub-thread is about your unhelpful and misleading equivalence and analogy. :)
Silicon wafer costs are like silicon wafer costs. Your diamond analogy is simply inappropriate.
We don't say "Aircraft grade aluminium costs are like diamonds, rather than hard drive aluminium platters." or "Fission reactor grade steel costs are like diamonds, rather than..." because this is an immensely silly thing to say that obfuscates the true cost of the material in question.
What's more, we can generally discover the high end of the true price of the material in question with a little work. As I demonstrated in my replies to you, silicon wafer costs are substantially cheaper than equivalent diamond costs.
If you had said something along the lines of "Due in part to the cost of silicon wafers, silicon-based data storage technologies are now and will be for the foreseeable future substantially more expensive on a per-GB basis than spinning rust or tape-based technologies.", I would have had absolutely nothing at all to object to.
> Consider the $0.24/die...
That figure is based on a particular die area. I would expect a flash memory die to be substantially smaller than a CPU die. This would drive the base cost per die down even further. Moreover, that figure was from 2009. Up to date figures are required to really put a floor on chip prices. :)
> And [that 1TB SSD] competes against 5TB hard drives that sells for $100.
Sort of. For every use that I have except for bulk data storage, I recognize the vast superiority of an SSD. The only HDDs in my computers are the ones I got for free with my laptops-turned-servers that don't do much disk IO, and the disk array that holds my 5TB-and-growing Postgres database.
For the average computer user, I would strongly recommend replacement of the HDD in their computer with an SSD. If you don't need to store more than 1TB of data, the performance gains over HDDs are just too great to use anything else.
I'm fairly confident that HDDs will be substantially cheaper per GB than SSDs for the foreseeable future. I'm -however- not convinced by your implicit argument that SSDs will always be -price-wise- unattractive when compared to HDDs. SSDs seem to be sold at the price-per-GB of the HDDs of ~3->5 years ago. We will inevitably see 500GB SSDs at the $80 retail price point. This will make them a no-brainer for every big computer manufacturer. A really fast disk makes slow kit feel really fucking fast.
 In my experience, almost no non-technical user has more than 500GB of data that they care about on their machine at any one time.
 They're only a little more than twice that price now.
We need to make sure that everyone understands why, and part of that is because we're using lots of silicon crystals, which have the same lattice structure as diamonds, which are going to be more expensive than aluminum platters.
If you take it to the limit, an SSD won't be cheaper than hard drives even as processing costs go down, because they use so much silicon.
You say the silicon costs are insignificant, but it will be a limit as prices go down.
The diamond analogy works appropriately, and it's unhelpful and inappropriate to claim material costs are insignificant.
And people are always going to end up using as much space as given, so that's another mistake you're making. They will find ways, especially given high-res smartphones everywhere with cameras.
I used to be certain of that, based on my personal space usage habits. Based on my ongoing survey of both technical and non-technical computer users, I no longer believe that to be true.
The rise of The Cloud(TM) means that there are shockingly few users who intentionally keep a local copy of their data. Media streaming and synced storage means that a wide swath of the computer-using population store that shit remotely and throw away data when The Cloud(TM) gets full.
> ...it's unhelpful and inappropriate to claim [silicon wafer] costs are insignificant.
When the analysis demonstrates that the costs are an insignificant fraction of the total cost, then it is entirely appropriate to make that claim. :)
Silicon wafers may well remain more expensive than harddrive platters. The price of silicon wafers may well mean that SSDs will never reach price parity with HDDs. These facts don't magically make $0.25 per chip a significant factor in the manufacturing cost of a product that also required substantial original research and development to come to market. :)
Why is that?
Building a transistor on a chip is like making a building by bombarding meteors from space and hoping the craters form the shapes you want.
Building a chip is like making a city with that process.
When was the last time your first program in a language you've never used before compiled & ran on the first try?
Humans are pretty damn good at making small precise mechanical movements.
Or look at internal combustion engines. The two absolutely critical technology improvements that changed things from WWI to WWII were "merely" refinements in those and radios. WWI IC engines were so rough they pretty much required wooden frames, and engine power was anemic, as WWI tanks show. Fast forward not very many years and we have much smoother and reliable powerful engines, and had developed the seeds of today's jet engines before the first transistor was demonstrated in 1947.
My bet is by the end of next year, SDDs will be cheaper than their equally sized HDDs. HDDs are certainly on their way out.
Hetzler et al. have calculated that the industry would have to spent over $800B to build enough fabs to replace hard disks with SSDs. http://storageconference.us/2013/Papers/2013.Paper.01.pdf
"The later capacity is accomplished using 8 stacked and thinned (< 75 um) NAND chips in a 1.2 mm package"
The samsung one has 48 layers per the article. So that's a 6x improvement.
Or automotive engines. We have all sorts of technology tacked on around the basic ICE gasoline engine to make them better- the combustion chamber is just a tiny piece of the machine, which is tended by countless devices managing temperature, airflow, fuel flow, air velocity, etc. Tremendously complex compared to electric motors- but in the end, they are still more popular than electric motors because of the fundamental problem of batteries.