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Intrinsic said:

The funny thing about you guys argument is that you are both right. But also that you are both just not looking at it in a way that it applies to consoles.

For consoles, going to a smaller Fab process, will ALWAYS be cheaper for them. This is simply because unlike everything else, when a console die chrinks, they don't cram in more transistors to make them more powerful. The chip remains identical but just smaller. That simply means that they can make more of those chips per wafer. So where MS/Sony may have been spending $800M for 10M chips before, now they would be spending $800 for 16M or so chips.

The other thing to consider, and this is why console manufacturers may have to wait a little, is that when the fab process shrinks, for the first 2-3 months yeilds are lower. What that simply means is that at this point the chips cost more to make than their bigger counterparts. And only people willing to pay a "defect" premium will still order and build chips at the new size. usually GPUs. There is sort of a pecking order for who gets to use the new fab process first.

By the time the GPU guys, Apple and a couple of other smartphone makers get their own chips, another 8-9 months would have passed and by that time the fab process is usually perfected and yeilds are at a maximum. Then the console guys can come in and make a block order for 16M chips.

Rinse and repeat.

How am I not looking at in a way that applies to consoles ? 

How is that possible when cost/transistor ratio doesn't improve for process nodes past 28nm ? 

Even with improved yields, it still likely won't solve the issue of cost reduction. Yields can improve the cost/transistor ratio but it won't surpass what's achieveable with 28nm ...

You forget that 28nm is the sweet spot ...