Consider yourself warned.
OK, Time to break down how SoC are made.
First off, While I have experience in this field, I am NOT a expert and my thoughts should be taken as a guide. If you want a first hand account on how these chips are designed, produced and tested to suit game consoles, I highly recommend The Race for a New Game Machine: Creating the Chips Inside the XBox 360 and the Playstation 3 While it is a partial fictional retelling of the story of two people who were involved with the design of both the CELL and Xenon processors behind the PS3 and 360 respectively, the tech knowlege is top notch and explains in more detail than I can go into.
The design for a System on Chip (SoC) generally starts with a company reaching out to a chip designer. They will ask for information about what CPU and GPU options they have available now along with their plans for the next 2-4 years. This covers technology such as CPU speeds, GPU clocks and other designs like variable rate shading, ray tracing, ect.
The console company then evaluates what the roadmap is for their plans. You need to set your goals for the system overall. Then once you have the plan for how much CPU speed, GPU cIock, Memory type and bandwidth, custom hardware, ect.You go to the chip designer and together, work out which technologies you want in your chip and it then gets sent off to the designers.
The chip designers do the layout of all the components to fit inside the chip package and debug errors that come up. You would also have your own designers there helping guide any customizations you want included in the chip. This is the collaboration that you tend to hear about when AMD says that they are working with Sony or Microsoft. This is a time consuming process but once they reach a milestone, you then get what is called the “First spin”
A spin is spinning up a single wafer of chips for prototyping. When they get these chips back, they go into hardware labs where they get them up and running in test environments and push them to see if there are any errors. After this, another round of designing where you target any errors that have come up and additional work to smooth out any bottle necks that may have appeared. They also plan the chip to have redundancies so if a GPU processor has a few errors, they can disable them and still use it.
This process takes years. Phil Spencer talked about that the first part to any console design is the silicon. This is why. Generally, you do as few spins as possible to work out issues as they are expensive as a one off. Once the chip design is finalized, you go into prototype production and would produce chips for your prototype/test hardware. These are the units that the console software engineers will use to design and build the OS and tools for game production. While the test units are being built into development kits for your teams to work on, you finalize the design of the box, cooling, acoustics, ports, plastic shells, packaging and the all important manufacturing line to assemble the millions of consoles.
Once the SOC goes into production, The console manufacturer puts in a order to the chip designer to make X amount of chips for target date and continuing orders of X amount to be delivered on a planned date per month. The chip designer then places the order with the foundry (TSMC for arguements sake) and gives them the chip design that was approved. The foundry then spins up production.
So now, Let’s start with yields. All chips are made on large silicon wafers. So the foundry builds up the chips and then sends them to the chip designer. It goes into testing where they check the amount and location of failures. If the chip has up to 4 Compute units with imperfections, then it is " Binned" as viable and is sent off to be used in a console. From here, They test the chips to make sure it can reach the required frequencies. Those that pass are then put through the process to disable the CU’s that are non functional or are selected to be disabled.
When you clock higher with processors, some may have imperfections that effect the clock rate that can be achieved.
So here is the thing with pricing for the Soc (system on chip) For arguements sake, let’s say that they can fit 1000 SoC on a silicon wafer. So that is potentially 1000 soc’s. It costs $100,000 to produce that silicon wafer. Means that with no failures, production cost is $ 100 per Soc. However, They are made and in the first binning, You only get 600 viable Soc. The other 400 are no good either due to manufacturing error or they cannot hit the clocks required for the product.
Now, it still cost $ 100,000 to make them all. So take the $100,000 and divide by 600. Now, to just cover the cost of making the Soc, each one costs $ 166.66. That is how much the console manufacturer would pay for each chip.
Now, how this works is that the agreements between the console manufacturer and the chip designer would be to share the costs of R&D on the chip. Once the console manufacturer places orders for parts, they bear most of the cost of bad yields. The chip designers would have to pass on the cost as they do not have final approval of the chip, the console team have to place the order and lawyers would be involved to make sure it is locked up tight. Generally, yields can have acceptable loss rates of 10% but the higher it goes, the more cost ends up per usable chip.
Now, how it falls into the news today is that if the SoC has a yield of 50% but slowly improving, Then the SoC cost for this initial launch period will be higher. Sony have a few choices it can make.
- Eat the cost and still launch at the target price. Make it up later. Hope that yields improve.
- Evaluate and raise your target price to cover the costs.
This information coming out today would have been known for months and plans would have adjusted to suit. I bet there is a warehouse somewhere full of motherboards, memory modules, UHD Blu Ray drives and the casing for the Playstation 5.
4 cigarettes and a can of diet coke went into this breakdown.
