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Loud_Hot_White_Box on 30 October 2009
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drkohler said:
drkohler said:
 

So what does Sony save by going from 65nm to 45nm ? The surprise answer is zero, ziltch, nada. Until the development costs are recouped. Once there, the cost savings will be in the order of $30-$50 (for both chips together). And finally, manufacturing a PS3 costs around $350 now (my estimate from industry experience, no sources available).

 

So.. bringing back the never ending discussion of how much the manufacturing costs of a PS3 are.

In various threads, I have given a few estimates during the past year and have occasionally been ridiculed about my $330-$350 estimates (particularly by two circle jerks). We have the direct answer from the earnings conference call that just ended:

Sam Levenson (Execcutive SVP of IR), Quote:

"The competitive cost versus the price, as of September, the cost is probably higher a little over 10% compared to the price. But we are expecting towards the end of our fiscal year, which is March next year. The cost is probably one digit higher than the price, in other words, probably somewhere in the middle of the 5% or 6%. So therefore, we are expecting that sometime following fiscal year, relatively break even across the profit for PS3 operations."

So adding around 15% to the selling price for a PS3 Slim ($300).. we get almost exactly the estimated $350.

The quote uses bad English, but anyway it looks like it's saying the current cost is 110% of the price, or $330 not $350, and then in March the cost will be 105-106% of the price, and then next fiscal year they'll break even.  That right?

btw your quip on the 65nm to 45nm process neglects that the move to a smaller architecture helps them recoup costs faster.  You set it up by saying that they are not "saving" anything until costs are recoupped, which may or may not be true depending on your definition and accounting methods used, but Sony most certainly is receiving the hardware at a cost savings for each unit.  Thus your point has zero, zilch (<--correct spelling), nada merit.