Post
Topic
Board Mining
Re: LargeCoin Pricing Announced; Taking Pre-Orders
by
nmat
on 06/03/2012, 23:19:47 UTC
Well no.  If one has a fixed cost of $1M then to amortize that over 1000 chips will be +$1000 over build cost per chip.  If you ammortize that over 20,000 chips it is $50.  If you amortize it over 100,000 chips it will be it will be $10 per chip.

ztex (as an example) won't get much lower prices even if he builds 10,000 boards BUT an ASIC w/ huge upfront costs acheives significantly lower cost by scaling production.

Keeping prices high for a select few means less units moved and higher cost per unit.  Both company and customer lose.  There also is the risk with high prices of slow volume and someone comes along w/ cheaper/faster/cooler unit before you ammortize.  Then you are left holding the proverbial bag.

An example:
Hypothetically (excluding profit margin, risk, volume pricing on production runs, etc)
$1M NRE cost.
$100 wafer cost per chip (1 GH/s)

Sell 1000 chips = $100 ea + $1000 NRE share = $1100 per chip ($22,000 per 20GH/s box)
Sell 5,000 chips = $100 ea + $200 NRE share = $300 per chip ($6,000 per 20 GH/s box)
Sell 25,000 chips = $100 ea + $40 NRE = $140 per chip ($2,800 per 20 GH/s box)
etc...

So someone selling a few units at very high cost seems counterintuitive to the economics of ASICS.  With ASIC your non sunk cost will be very low.  It is in your best interest to undercut everyone else, be the clear choice and line up tens of millions of dollars in orders.

If you want to sell a few units at high premium get early access to 28nm chips.  No sense and pricing them low as your cost won't go down much when ramping up volume.

What puzzles me is: why are they only selling 25 units? Does this mean that later on they will sell them cheaper?