Welcome to EDAboard.com

Welcome to our site! EDAboard.com is an international Electronics Discussion Forum focused on EDA software, circuits, schematics, books, theory, papers, asic, pld, 8051, DSP, Network, RF, Analog Design, PCB, Service Manuals... and a whole lot more! To participate you need to register. Registration is free. Click here to register now.

can any one help on this - silicon vendors

Not open for further replies.


Newbie level 1
Mar 4, 2009
Reaction score
Trophy points
Activity points
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?

Not open for further replies.

Part and Inventory Search

Welcome to EDABoard.com