The Sony PlayStation 3 could be dramatically more expensive to make than most people think, and in even shorter supply, because of problems manufacturing its novel Cell processor. Rather than costing, say, $150 each, they could cost $300 each, or even more (in hypothetical ball-park terms).
The problem is that the cost of a chip depends on the yield. Chips are made on wafers, and you have to process a whole wafer at a time. Let's assume it costs $1,000 produce a wafer with 100 chips on it. If there are no defects at all, that's 100 good chips at $10 each. If the defect rate is 99%, you only get one chip per wafer and it costs $1,000. (There are other costs including the packaging and testing, and the sunk cost of the fab, which could be $2 billion. If you make 100 million chips, the cost of a $2bn fab still adds at least $20 per chip.)
I've been assuming a Cell chip would cost around $150, with about 60% yield, which I thought was reasonably pessimistic. But an interview with Tom Reeves, IBM vice president of semiconductor and technology services, in Electronic News, implies that it could be much more. Tom's Hardware picked it up, and remarks:
With standard silicon germanium (SiGe) single-core processors, IBM can achieve yields of up to 95%, Reeves told Electronic News. But "with a chip like the Cell processor," he then remarked, "you're lucky to get 10 or 20 percent."
Even if my calculations are completely wrong, that would make Cell chips two or three times as expensive as I thought -- and that probably goes for all the other people doing back-of-an-envelope guesstimates.
The stiuation is helped because Sony will be able to ship defective chips in many PS3s. The Cell has multiple processing elements, and there are eight in the PS3 design. Sony's specification is for seven SPEs (synergistic processing elements), so chips with one defective SPE can still be used. But the costs don't go away. As Tom's Hardware comments:
In its quarterly report last April, Sony told investors it intends to sell 6 million PS3s between November 2006 and March 2007. If this is indeed the case, borrowing Reeves' numbers, the IBM/Sony/Toshiba joint effort (STI) will need to fabricate at least 15 million Cell processors, and toss out 60% or more of those units after fabrication.
Yes, this is all a bit hypothetical. However, if Sony or IBM wants to divulge the real manufacturing costs for Cell processors (and, ideally, for those hard-to-make Blu-ray drives) we'll be happy to publish them.
Note: The chip used in the Xbox 360 is also multi-core, and could have similar problems, but not to the same extent. Chip manufacturing yields increase as the process is honed and bedded in, and the Xbox 360's chip is based on PowerPC and Altivec elements well known from Mac chip production, and a well established process. In theory, the two chips might cost about the same to make, but real life is different, and is likely to stay that way for a while.
