In-Stat: Intel chips only cost $US40 to make

By continuously upgrading its production equipment to the latest technology, Intel maintains a low cost per chip of about $US40, according to a report issued by industry researcher, In-Stat.

Although Intel sells a variety of chips, including lower-cost NOR flash memory chips and computer chipsets, its lowest-priced desktop CPU, one of the Celeron D series, fetches $US69 while its top PC chip, the Pentium Extreme Edition 3.73GHz, sells for $US999, according to Intel's latest price list, released on Sunday. The most expensive chip on the list is its premium server chip, the Xeon 3.33GHz, at US$3692 each.

The world's largest chipmaker is able to keep costs low by continually using more advanced production technology. Semiconductors are carved out of large silicon wafers, thousands at a time, and better technology means more chips can be made on each wafer.

Intel has three factories using advanced 90 nanometre (nm) technology to make chips, and it will bring four factories using even smaller 65nm technology on line in 2006, according to In-Stat. A nanometre is a measurement of the size of transistors and other parts that are etched onto chips. The more transistors on a chip, and the closer they are together, the faster the chip can perform tasks.

By making the swift transition to 90nm etching technology, Intel saved about $US1 billion in manufacturing costs last year, according to In-Stat.

Intel could not immediately be reached for comment on this report.

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Dan Nystedt

IDG News Service
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