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can any one help on this - silicon vendors

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can any one help on this

There is a well-known saying in the ASIC business: "We lose money on every part, but we make it up in volume." This has a serious side. Suppose Silicon Vendor A currently has two customers: Customer A, who currently buys 10,000 parts per week, and Customer B, who currently buys 4800 parts per week. A new customer, Customer C (who is growing fast), wants to buy 1200 parts per week. Silicon Vendor A's costs are
wafer cost = £500 + (£250,000 / W) ,
where W is the number of wafer starts per week. Assume each wafer carries 200 chips (parts), all parts are identical, and the yield is
yield = 70 + 0.2 x (W - 80) %
Currently Silicon Vendor A has a profit margin of 35 percent. Silicon Vendor A is currently running at 100 wafer starts per week for Customer A and Customer B. Silicon Vendor A thinks they can get 50 pence more out of Customer A for his chips, but Customer B won't pay any more. We can calculate how much Silicon Vendor A can afford to lose per chip if they want Customer C's business really badly.



1. What is Silicon Vendor A's current yield?
2. How many good parts is Silicon Vendor A currently producing per week? (Hint: Is this enough to supply Customer A and Customer B?)
3. Calculate how many extra wafer starts per week we need to supply Customer C (the yield will change, what is the new yield?).
4. What is Silicon Vendor A's increase in costs to supply Customer C?
5. Multiply your answer to part 4 by 1.35 (to account for Silicon Vendor A's profit). This is the increase in revenue we need to cover our increased costs to supply Customer C.
6. Now suppose we charge Customer A 50 pence more per part. How much extra revenue does that generate?
7. How much does Customer C's extra business reduce the wafer cost?
8. How much can Silicon Vendor A Silicon afford to lose on each of Customer C's parts, cover its costs, and still make a 35 percent profit?
 

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