Price of silicon wafer rising sharply

[Prysin]

2 hours ago, Notional said:

Both of those products carry a huge profit margin though. I do wonder how big Intel's and TSMC's silicon ingot stock is. Could be quite a delayed reaction in pricing, if any.

not a ingot, a crystal.

 

ingot is a specific shape/slab of a material. Silicon is grown into a cylindrical crystal. If it werent for the crystallized structure, it wouldnt be possible to use it the way we are, it wouldnt be pure enough

[Notional]

2 hours ago, Prysin said:

not a ingot, a crystal.

 

ingot is a specific shape/slab of a material. Silicon is grown into a cylindrical crystal. If it werent for the crystallized structure, it wouldnt be possible to use it the way we are, it wouldnt be pure enough

Well, technically it's called a boule. And a boule is a single crystal ingot: https://en.wikipedia.org/wiki/Boule_(crystal)

[jagdtigger]

Oh crap, i wanted to upgrade my PC next year when zen2 comes out...

[Syntaxvgm]

why did everything tech get worse this year?  

[cj09beira]

2 minutes ago, Syntaxvgm said:

why did everything tech get worse this year?  

profits, gotta catch them all !!

[Princess Luna]

5 minutes ago, Syntaxvgm said:

why did everything tech get worse this year?  

Maybe because the primary and raw material to manufacture tech is finite and we're wasting too much of it already? Every one knows that we're consuming more than our planet manages to keep up, the only possible future for this market is decrease production and elevate the prices in the long run.

[cj09beira]

9 minutes ago, Princess Cadence said:

Maybe because the primary and raw material to manufacture tech is finite and we're wasting too much of it already? Every one knows that we're consuming more than our planet manages to keep up, the only possible future for this market is decrease production and elevate the prices in the long run.

isnt silicon the 2nd most common element on earth though ,

and there is lots of silicon being lost while cutting the wafers, so better methods of cutting can help a lot, 

[Princess Luna]

Just now, cj09beira said:

,

While raw silicon is fairly common, actual specialized mining sites for it counting with logistics and treatment stations to ensure these silicon pieces are pure enough when they reach Intel, nVidia, AMD, IBM, Qualcoom and so on Are Not.

 

Investments in future installations to cover up the increase in demand are not yet profitable enough direction any one in this chain of business is interest in doing so, increasing the prices to give the demand a little break yet without losing profits as all gets sold regardless is a much more interesting route for these businessman's right now.

[AncientNerd]

Okay just to pull this discussion back to a bit of sanity...and from some personal rather than hearsay information I have due to contacts I have. There is/was a silicon mining/processing plant that was to be completed in TN about 3 years ago that didn't get completed because the price of raw silicon dropped to the point it was not profitable (I know the lead engineer on the project). If the price actually were to go up this plant would then become profitable and from discussions with this engineer it would take ~6 months to complete the plant leading to an increased supply from a completely new source. So, there are in fact people/companies that are looking at the silicon market and aware of possible openings. If the existing suppliers were to actually restrict supply to the point where it went up by say 20-50% then this new supply would be profitable to come online, since the sunk costs are already there and the company has already eaten them so they would only have to deal with the startup/equipment costs rather than the infrastructure/major building costs (well over 90% of a large project like this, since they ran rail spurs, highway extensions, and electric grid connections already to power this, plus the town that it is near upgraded their power system to support the plant).

[Prysin]

38 minutes ago, Princess Cadence said:

Maybe because the primary and raw material to manufacture tech is finite and we're wasting too much of it already? Every one knows that we're consuming more than our planet manages to keep up, the only possible future for this market is decrease production and elevate the prices in the long run.

you do realize that Africa and Russia alone has so much raw material that we can keep our current consumation going for a long long time.

[Defunct Lizard]

ram and graphics card prices are already up....

[AncientNerd]

1 hour ago, floppy disk mayhem said:

ram and graphics card prices are already up....

Ah but they are up for completely different reasons than the price of silicon, if the price of silicon were to go up enough then the price of everything electronic would go up by an equivalent amount. Remember it is not just the CPU/GPU that have to worry about silicon prices, but all of the MOS components, diodes, LEDs, switching transistors, etc. would all be hit by a significant rise in silicon prices.   

[Prysin]

23 minutes ago, AncientNerd said:

Ah but they are up for completely different reasons than the price of silicon, if the price of silicon were to go up enough then the price of everything electronic would go up by an equivalent amount. Remember it is not just the CPU/GPU that have to worry about silicon prices, but all of the MOS components, diodes, LEDs, switching transistors, etc. would all be hit by a significant rise in silicon prices.   

no,, not nearly as much

 

a LED takes what? 0.5mm2? and is on a really old, crude but super reliable node.

on a 300mm2 wafer, you can get THOUSANDS... so if the price increases by 20% per wafer, you just divide the price increase by the number of products and BOOM, price accounted for.

 

However CPUs, and more so GPUs, especially the big stuff like 1070, 1080, 1080Ti, Titan XP etc, these are HUGE. you get at most 60-150 PER wafer, they are also on the latest node, and due to size, have much worse yields. Thus you end up with maybe 45-130 products that has to share the cost of 20% increase in price per wafer. Suddenly you see a MUCH bigger rise in price, as the price must be increased on a very low number of products.

[AncientNerd]

16 minutes ago, Prysin said:

no,, not nearly as much

 

a LED takes what? 0.5mm2? and is on a really old, crude but super reliable node.

on a 300mm2 wafer, you can get THOUSANDS... so if the price increases by 20% per wafer, you just divide the price increase by the number of products and BOOM, price accounted for.

 

However CPUs, and more so GPUs, especially the big stuff like 1070, 1080, 1080Ti, Titan XP etc, these are HUGE. you get at most 60-150 PER wafer, they are also on the latest node, and due to size, have much worse yields. Thus you end up with maybe 45-130 products that has to share the cost of 20% increase in price per wafer. Suddenly you see a MUCH bigger rise in price, as the price must be increased on a very low number of products.

Sorry but this is just incorrect, if the price of the base material goes up by 20% the company is not going to just eat it. The margins are just not that large, yes you get to split your price by the number of LEDs per wafer but the cost each one still went up by 20% it doesn't matter if you are making one or making 10,000 if the price of your base material went up by 20% the cost of the result also went up by 20%. So it used to cost 1 to make a LED now it costs 1.2, if you used to sell the LED for 2 (or more likely 1.5) you are not going to take that hit to your bottom line of 20-40% of your profit you are going to raise your prices by as much as you can to keep from going under. 

 

Believe me I have been in the position of having the base cost of materials go up when working for a manufacturer and it ripples like crazy, it was PET plastic in our case but it hit not just the parts we directly manufactured but quite a bit of the stuff we purchased because others used PET in their manufacturing process. The end product ended up going up by like 40% over a 10% increase in base material price due to supply chain ripple effect. The price of that LED going up by .2 cents at the factory will translate into probably 5-7 cents by the time it reaches your computer since it goes through multiple channel distributors that will need their markup, multiply that by the number of actual LED/Transistors on a circuit board (say HDD controller board or SDD) now do the markup at that level. If the price actually goes up by 20% (a huge price increase) then it gets ugly fast.

 

Price changes usually happen by 1-5% increments because if it changes by as much as 10-20% there is a huge incentive for other players to enter the market, that's a huge opening.

[Defunct Lizard]

5 hours ago, AncientNerd said:

Ah but they are up for completely different reasons than the price of silicon, if the price of silicon were to go up enough then the price of everything electronic would go up by an equivalent amount. Remember it is not just the CPU/GPU that have to worry about silicon prices, but all of the MOS components, diodes, LEDs, switching transistors, etc. would all be hit by a significant rise in silicon prices.   

Yes i understand that, gpu because of miners and ram...idk

 

I understood that they had nothing to do with the price of sillicon 

[Trik'Stari]

Kind of glad I got my 1080ti now.

 

If only I had waited and gone threadripper instead of getting the 7700k when I did....

[AnonymousGuy]

On 11/14/2017 at 9:02 AM, pyrojoe34 said:

Yea but what fraction of the final cost is the raw silicon? If it takes 1$ worth of silicon for a $300 CPU then a 20% increase is only $0.20... not a huge factor.

I'm replying way late and you've probably already gotten 50 other answers, but off the top of my head a CPU costs < $10 to actually manufacture.  A significant cost of that is the substrate they put it on (couple bucks).  When you're getting 500 per wafer the difference in paying $2000 a wafer and $2200 a wafer is nothing vs. the $100k you're making in revenue.