CPU Design - Markets

Markets

Developing new, high-end CPUs is a very costly proposition. Both the logical complexity (needing very large logic design and logic verification teams and simulation farms with perhaps thousands of computers) and the high operating frequencies (needing large circuit design teams and access to the state-of-the-art fabrication process) account for the high cost of design for this type of chip. The design cost of a high-end CPU will be on the order of US $100 million. Since the design of such high-end chips nominally takes about five years to complete, to stay competitive a company has to fund at least two of these large design teams to release products at the rate of 2.5 years per product generation.

As an example, the typical loaded cost for one computer engineer is often quoted to be $250,000 US dollars/year. This includes salary, benefits, CAD tools, computers, office space rent, etc. Assuming that 100 engineers are needed to design a CPU and the project takes 4 years.

Total cost = $250,000 / Engineer-Man/Year x 100 engineers x 4 years = $100,000,000 USD.

The above amount is just an example. The design teams for modern day general purpose CPUs have several hundred team members.

There are several different markets in which CPUs are used. Since each of these markets differ in their requirements for CPUs, the devices designed for one market are in most cases inappropriate for the other markets.