$40 Chips

No i’m not talking about chips that you eat, i’m talking about the price that it costs Intel to manufacture the average P4 computer processor chip:

Though Pentium 4s can sell for up to $637, Intel’s average cost for making a chip comes to $40, according to a report from analysts In-Stat.

The report doesn’t consider expenses related to design or marketing, or the fact that high-end chips can sell for more because fewer off the production line can actually run at top speed, but it does shed light on how Intel has managed to maintain healthy margins in an era of price declines. The cost has been steady at about $40 since 2003, according to In-Stat.

News.com

 

Well i’m hardley surprised at this – it costs Intel about £22 for the production of a single chip. Sure mass production makes it quite cheap, but paying some ridiculous prices for chips over the years maybe Intel have been making just a little too much money on their Pentiums for what they’re worth. Currently the most expensive of these chips retail at around £600, these are the really expensive ones but still they are making over 10x profit! Oh well, I always thought we paid too much for processors!