Sunday, February 22, 2004
'Where do microprocessors come from, Daddy?' That's an awkward question we all must answer at some stage in our careers. What mysterious process converts elemental silicon into elemental forces like Intel's Itanium or Motorola's PowerPC? Let us explore the wonder that is semiconductor creation.
'When a customer and a vendor love each other very much . . .' they make a commitment to produce new chips. It's a big commitment, too. New chips generally cost a few million dollars to design, but that's small beer compared to what it costs to build a new chip-making factory. Fabs or foundries, as they're called, cost upwards of $2 billion to build. You could buy a lot of cruise missiles for that kind of money or several small Caribbean republics (island not included).
The amortization sucks, too. That $2 billion foundry will be obsolete in less than five years, so you're looking at more than $1 million of depreciation every single day. Very little of that cost goes into the silicon itself. You're mostly paying for the exotic equipment inside, including the neat-o air conditioners in the clean room.
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