Design Economics

Costs Incurred in
manufacturing an IC

Non recurring engineering

costs

Recurring
costs

Fixed
costs

NRE Costs

Engineering Design Cost

Personal Cost

Personal cost include labor for

Architecture Design
Logic Capture
Simulation for Functionality
Layout of modules and chip
Timing verification
DRC & Tapeout
Test generation

Support Cost

Support cost include

Computer costs
CAD S/w tools
re-education costs

Prototype Manufacturing Cost

Mask Cost

Test fixture cost

Package cost

Recurring Costs

Cost which recurs every time an IC is sold is called as recurring costs

Cost incurred in support from a technical viewpoint also adds to recurring cost

Marketing , Sales force and overhead costs together called as cost of sales
also adds up to the recurring costs

Fixed costs
Fixed cost include cost incurred in

Development of datasheets
Development of application notes
Specific application support for particular users
Yield analysis

Determining the selling price of an IC

Selling price of an IC is :

Stotal =
Where
Stotal is Selling price of an single IC
Ctotal is manufacturing cost of an single IC
m is desired profit margin

Expression for cost to fabricate an IC

Expression for cost to fabricate an IC is

Rtotal = Rprocess + Rtest + Rpackage

Rtotal is total cost to fabricate an IC
Rprocess is Processing cost of an IC

Rtest is the testing costs for an IC

Rpackage is the packaging cost of an IC

Expression for processing cost is

Rprocess =
Where
W is Wafer cost
N is Gross number of die per wafer
Yw is die yield per wafer( 70% to 90%))
Ypa is packaging yield (95% to 99%)

Also where expression for N is

r is radius of wafer
A is die area

Expression for cost of IC

Where die cost is

Where dies per wafer is

We have

We have formula for Die yield is