Computer Hardware Profitability

[Himommies]

How profitable is a device like a GTX 1080.Excluding fancy coolers and all that aesthetic stuff do they cost the same to manufacture as a 1060.Does this also apply to CPU's too.

[The Sloth]

they make a good chunk from it, also gtx 1080 and a 1060 cost almost the same to manufacture the 1080 might cost a bit more to make. 

[Himommies]

1 minute ago, nerdslayer1 said:

also gtx 1080 and a 1060 cost almost the same to manufacture the 1080 might cost a bit more to make. 

This is confusing what do you mean by that

[The Sloth]

6 minutes ago, Himommies said:

This is confusing what do you mean by that

they make lot more profit selling high end gear than low end. the 1060 and 1080 are vary close in cost but the performance result is different so it costs more. a gpu price is lot more than just manufacturing remember research and marketing also development. 

[tlink]

what do you mean without all the fancy stuff? do you mean the video graphics adapter without the cooler installed? or do you mean just the gpu die? i think that the die is cut from the same wafer, just with cores disabled etc etc. but im not completely sure of this. the main reason why they cost more would be because a 1080 chip has to be way more pure than a 1060 chip, the impurity of the process results in there being more 1060 chips than 1080 chips. in terms of pcb and SMD its pretty similar, the extra VRAM doesn't cost that much more to justify the price increase. the voltage regulation module probably is beefier to but that wouldn't drive the cost up much either, maybe 30 bucks tops. but i really don't know for sure, and i don't think many people here do either .

[mad dudy]

well if its not good enough to be a 1080 then it becomes a 1070 or and lower.

[KWelz]

Profitability for who?  The developer or the re seller?   In both cases the answer is: Not as much as you think.  Re sellers usually have something along the lines of a 3-7% markup on hardware like computer and computer parts.  In some cases it is even less than this.  

 

For the developer they do make more than this of course.  However most people don't think about all the cost involved in creating such a card.   

For instance the last estimates I saw put the cost of a 16nm chip like the one used in the 1080 at about $50 per chip.  This of course varies based on yields and will get better as the process improves. By the time you add in the memory modules, etc you are looking at over $100 in materials easily and probably closer to 150 or 175.  

 

So Nvidia makes a ton right?   Well....   No.  You then have to add in other costs.  Production which ranges from the residual cost of the factory to, keeping the electric on, to maintenance.  Then of course there is wages for the people working in the factory.    

 

But wait, there's more!   

 

Now we have to think about development cost.  

Here is a chart showing Nvidias R&D budget.  

https://ycharts.com/companies/NVDA/r_and_d_expense

 

Notice that is 373 Million just for last quarter.   Well every card you buy is paying for that.   

 

The list goes on and on.   In the end these companies make money yes.  However they don't make as much per card as most people think they do.