I haven't seen any discussion on this (but if there is please delete), but I just read that the Cell processor in the PS3 was a co-development of Sony, Toshiba and IBM.
Does this mean that Toshiba make any money from each PS3 sold? It does seem a bit weird that Blu-Rays biggest selling hardware was part developed by the HD-DVD stalward :eek:

Yes, Toshiba does surprisingly have a part of Cell chip production. I was surprised too.

It would be interesting to see how much they might be making off each PS3 (especially compared to how much Sony may be losing).

According to the isuppli tear down analyss Toshiba sells:

Cell Processor - $89 (listed as IBM but Toshiba is partner)

I/O Bridge Controller - $59

Emotion Engine - $27*

TOTAL - $175

*Component is not in the 80GB PS3

I think all 3 big companies have collaborated on R&D but really doubt they're sharing revenues. Or at most, it would be at most a portion of the $89 (or whatever SCEI is actually paying) for the Cell.

I think all 3 big companies have collaborated on R&D but really doubt they're sharing revenues. Or at most, it would be at most a portion of the $89 (or whatever SCEI is actually paying) for the Cell.

If the isuppli costs are accurate (unknown) and Sony has claimed to have sold 5.7 million PS3's so far (or at least built):

Cell Processor - ($89) = $25,080,000 (assumes Toshiba gets $44)

I/O Bridge Controller - ($59) = $33,630,000

Emotion Engine - ($27) = $15,360,000

TOTAL - $74,070,000

Depending on the licensing deal STI (the joint business setup by Sony, Toshiba, IBM to handle licensing and all that) has set up it may cost each of them nothing to produce a Cell or they may have to pay a small licensing fee per chip (which would then be distributed to Sony, IBM, Toshiba). We'd be talking a very small percentage of the total cost of production of the chip by Sony even if they are paying anything to STI.

@Lee:
You typo'd something. You either meant to say "assumes Toshiba gets $4.4 dollars" and your math is accurate, or you meant $44 dollars and your math is off. If you meant $4.4 dollars you'd be much closer to the actual likely number. Those guesses are on the extreme high side if you meant to just cut the costs in half and assume that was the money Toshiba was getting.

Also Sony fabs the EE and I don't think that's a Toshiba chip anyways... I believe it's the GS that Toshiba designed (which is now in the single chip solution on the PS2, which at this point costs Sony about $27-30 to produce, from what I've heard -- just the EE is going to cost Sony less, and newer PS3 models don't even have that, although they still have the GS).

If the isuppli costs are accurate (unknown) and Sony has claimed to have sold 5.7 million PS3's so far (or at least built):

Cell Processor - ($89) = $25,080,000 (assumes Toshiba gets $44)

I/O Bridge Controller - ($59) = $33,630,000

Emotion Engine - ($27) = $15,360,000

TOTAL - $74,070,000

Why would you assume: 1) That Toshiba is getting half of the Cell costs and 2) that costs have stayed the same?

Depending on the licensing deal STI (the joint business setup by Sony, Toshiba, IBM to handle licensing and all that) has set up it may cost each of them nothing to produce a Cell or they may have to pay a small licensing fee per chip (which would then be distributed to Sony, IBM, Toshiba). We'd be talking a very small percentage of the total cost of production of the chip by Sony even if they are paying anything to STI.

@Lee:
You typo'd something. You either meant to say "assumes Toshiba gets $4.4 dollars" and your math is accurate, or you meant $44 dollars and your math is off. If you meant $4.4 dollars you'd be much closer to the actual likely number. Those guesses are on the extreme high side if you meant to just cut the costs in half and assume that was the money Toshiba was getting.

Also Sony fabs the EE and I don't think that's a Toshiba chip anyways... I believe it's the GS that Toshiba designed (which is now in the single chip solution on the PS2, which at this point costs Sony about $27-30 to produce, from what I've heard -- just the EE is going to cost Sony less, and newer PS3 models don't even have that, although they still have the GS).

Oops . . you are correct. . . too much. :o Going back to the isuppli TD - it says Toshiba has 11% of the revenue from the sale of components to Sony. They say build cost is $457 so that's $50.27 times 5.7 million PS3's is $28,653,900 (approx)

http://www.isuppli.com/news/default.asp?id=6919

iSuppli doesn't know what they're talking about in that breakdown - it hurts my eyes to even read it.

Who here believes that Sony is paying $22 for the mounting cage, $33 for the plastic case, and another $40 for someone to put these together?

All their other numbers are blind guesses. $15.50 for a WiFi module? :rolleyes:

Also, I can't believe there are people that up until now didn't realize Toshiba was one of the designers of Cell... it's a sad testament. Anyway Fronn's right in the likely royalty structuring of the arrangement.

iSuppli doesn't know what they're talking about in that breakdown - it hurts my eyes to even read it.

Who here believes that Sony is paying $22 for the mounting cage, $33 for the plastic case, and another $40 for someone to put these together?

All their other numbers are blind guesses. $15.50 for a WiFi module? :rolleyes:

Also, I can't believe there are people that up until now didn't realize Toshiba was one of the designers of Cell... it's a sad testament. Anyway Fronn's right in the likely royalty structuring of the arrangement.

They claim Sony loses approx. $240 per PS3.

So where did the $2.25 billion worth of loss's come from?

They claim Sony loses approx. $240 per PS3.

So where did the $2.25 billion worth of loses come from?

Of course Sony loses money per PS3 - ironically I'm always one correcting PS fans saying otherwise. But are we discussing Sony's loss-leading PS3 here - and the fact that it does lose money - or are we discussing those whack iSuppli figures?

Because they are completely out of touch.

Now - I think I asked a simple question of does anyone think Sony pays $22 for a motherboard cage, $33 for a plastic case, and $40 for assembly. I don't expect anyone to respond in the affirmative on these. And again, that WiFi module is just as egregious in scope.

Of course Sony loses money per PS3 - ironically I'm always one correcting PS fans saying otherwise. But are we discussing Sony's loss-leading PS3 here - and the fact that it does lose money - or are we discussing those whack iSuppli figures?

Because they are completely out of touch.

Now - I think I asked a simple question of does anyone think Sony pays $22 for a motherboard cage, $33 for a plastic case, and $40 for assembly. I don't expect anyone to respond in the affirmative on these. And again, that WiFi module is just as egregious in scope.

I thought we were discussing both. If the isuppli numbers are "wacked out" then the loss per PS3 should be smaller than the stated $240. So how does that work out with the total loss so far, that Sony has taken on the PS3? If the cost/assembly numbers are wrong? Sony says 5.7 million PS3's "sold" so far.

A $100 loss = $570 million

A $300 loss = $1.7 billion

A $400 loss = $2.28 billion

Maybe you are right - maybe the numbers are "bad" - they are not high enough!

The point is not what the number itself is or is not, the point is that iSupplies methodologies are unquestionably poor - that's obviated by the figures they give (notice you're not saying anything about the items I pointed out). You also cannot simply multiply and divide PS3 x loss and expect to get the answer; it is not that simple. R&D on the development side, software tools, marketing, and any number of other factors go into reaching the final number.

Let's get back on topic - of which this is not. Toshiba makes plenty of money off the PS3. The money does not come from Cell, it comes from stuff like the Southbridge chip. Also I'm not sure what the OP considers ironic in Toshiba's profiting off of the PS3. For everyone here on this forum, Sony may be nothing more than Blu-ray, and Toshiba nothing more than HD DVD... but the optical business is just one aspect of each of these companies. Where they are adversaries on this front, they have been allies on the semiconductor front for many years, even having a fab joint-venture together.

PS - I've said before that once Toshiba refines their own 65nm CMOS process for Cell, we might expect to see future HD DVD players ship with the chip. It would certainly outclass the P4's they've relied on until now, and would cost them significantly less to source. In that situation it would be Sony profiting from HD DVD player sales... and as you see that point really isn't all that relevant.

I'm with xbdestroya in agreeing the isuppli numbers are off.

So where did the $2.25 billion worth of loss's come from?

You have to take into account all inventory produced, not just sold inventory.
And you have to add marketing costs which could easily add up to a billion dolalrs for the world wide launch.

Toshiba makes plenty of money off the PS3. The money does not come from Cell, it comes from stuff like the Southbridge chip.

Agreed.

I've said before that once Toshiba refines their own 65nm CMOS process for Cell, we might expect to see future HD DVD players ship with the chip. It would certainly outclass the P4's they've relied on until now, and would cost them significantly less to source.

It has been pointed out the the move is to go for more efficient solutions for HDDVD players hence cell for HD-DVD is very unlikely. Considering Toshiba are using laptop chips in the G2 HD-DVD players + they have a huge laptop manufacturing business i'd be surprised if it'd be cheaper for them to move to a cell/linux solution over the x86/linux solutiion today. And per above the next goal is a single chip solution running windows CE which ought to be cheaper again.

Overall I'd estimate Toshiba profit $10 per PS3 sold.

It has been pointed out the the move is to go for more efficient solutions for HDDVD players hence cell for HD-DVD is very unlikely. Considering Toshiba are using laptop chips in the G2 HD-DVD players + they have a huge laptop manufacturing business i'd be surprised if it'd be cheaper for them to move to a cell/linux solution over the x86/linux solutiion today. And per above the next goal is a single chip solution running windows CE which ought to be cheaper again.

Overall I'd estimate Toshiba profit $10 per PS3 sold.

The laptop tie-ins are a good point, but with them going ahead on bulk Cell production, I couldn't think of a better use than something like an HD DVD player. Here we see that Toshiba has developed 65nm CMOS SPEs with a die size of just 7.07mm^2; slam four of those together and you're still at a very small size.

http://linuxps3.net/articles/cell-broadband-engine/toshiba-ports-cell-spus-to-cmos-process.html

On the side, I think that the x86/Windows CE effort is via Microsoft/Broadcom for third-parties; I'd be surprised if Toshiba themselves went with such a solution. But if you have anything indicating that's their plan I would love to see it, because I love following stuff like that. :)

That's like saying AT&T loses money with each cell phone they sell. Sure, they pay more for the phone than they charge the customer, but they make that money back in the following 2 years of service-fees and then some. It works out to be worth their while. The same is true of the PS3 (and almost every other console for that matter), they lose money on the initial unit and make up for it on game-sales. In the case of Sony, they also make up for in movie-sells as well. Not to mention accessories.

As for Toshiba making money on the Cell chip, I suspect the actual licensing royalty for the chip is a fraction of the total cost. Manufacturing makes up the bulk of that $89...licensing probably is only $1 or so and Sony may be exempt from paying that as one of the partners. IBM, Sony, and Toshiba probably all have the right to manufacture as many chips as they want without having to pay a royalty to anybody.

I am having trouble with this issue of not believing the iSuppli costs. They do this for a living. Companies are paying for these teardown analysis's to determine profit for new ventures. Do any of the posters also do this? If not than I would like to see more use of the IMO abbreviation.

And on another sidenote - everyone accepted their numbers when they did the TDA of the Toshiba HD-A1 in June of last year.

About iSuppli

iSuppli Corporation helps clients improve performance in the electronics value chain by providing them with the facts, analysis and advice they require to know precisely how to succeed. Our team of over 100 globally positioned electronics industry veterans monitor the status of the electronics industry value chain, and continuously update a score of self-consistent databases that track industry performance and significantly improve forecast accuracy. iSuppli tracks unique datasets - such as contract terms and conditions, pipeline inventories and component pricing - to allow clients to instantly pinpoint specific actions to enhance performance.

World-class, multinational companies utilize iSuppli databases, tools and market analysis reporting to improve decision making when it comes to questions of which application markets to target, what products to build, what products to source, which partners to select, what capital investments to make and where in the world to perform each of these endeavors.

I am having trouble with this issue of not believing the iSuppli costs. They do this for a living. Companies are paying for these teardown analysis's to determine profit for new ventures. Do any of the posters also do this? If not than I would like to see more use of the IMO abbreviation.

Lee, here are the facts:

1) iSuppli has no access to the fabrication costs internally at IBM, Sony, or Toshiba.

2) The casing, motherboard cage, and assembly costs were divined by a crack addict

3) Thus, the only costs they can even guess at accurately are things like the GDDR3 RAM - and even then their pricing of junk like the internal WiFi (which also should be accurately ascertained, but wasn't) throws all credibility out the window.

This is not rocket science - I mean I can buy a USB 802.11g module at retail for less than iSuppli is saying it costs Sony to integrate it onto their motherboard... and $40 assembly? What, is it put together by union labor in Detroit?

I don't need to use 'IMO,' because well, I'm simply correct on this. And iSuppli and whatever B-team crew they had disassemble this thing is wrong.

Do you have a link to the Toshiba A1 breakdown? There's no use discussing it without seeing whether there are some equally bizarre claims made.

I am having trouble with this issue of not believing the iSuppli costs. They do this for a living.

I've seen more than enough inaccuracies to estimate you take the isuppli number devide it in two and you end up with the actual unit manufacturing cost.

And on another sidenote - everyone accepted their numbers when they did the TDA of the Toshiba HD-A1 in June of last year.

I sure as hell didn't - you're more than welcome to go searching through the archives to find my posts as well.

On the side, I think that the x86/Windows CE effort is via Microsoft/Broadcom for third-parties; I'd be surprised if Toshiba themselves went with such a solution. But if you have anything indicating that's their plan I would love to see it, because I love following stuff like that.

Just to to clarify it's not a X86/Windows CE solution. It's more likely to be a MIPS based processor or something along those lines. I also believe the processor+video decoder in the new broadcom design are to be a single intergrated chip which again should help lower cost and power consumption.

Just to to confirm it's not a X86/Windows CE solution. It's more likely to be a MIPS based process or somethign along those lines. I also believe the processor+video decoder int he new broadcom design are to be a single intergrated chip which again shoudl help lower cost and power consumption.

Good call, yeah I should have gathered that it wouldn't be x86 by the Broadcom partnering. But is Toshiba on deck to use this vs an internal solution?

I'd be surprised if Toshiba don't use the Windows CE/Broadcom solution in their G3 units. But as for offical PR relating to it I haven;t heard anythign - then again we didn't here much offical news re processor specs pre G2 release either.

Overall I'd estimate Toshiba profit $10 per PS3 sold.

WAY off.

Toshiba is the fab for a few IC's as you have seen. Toshiba and Sony partner on a great many things, business is business. Toshiba makes much much more than $10 on a PS3.

Probably it makes more business sense for Toshiba to abandon HD DVD and concentrate on the profit due to PS3 ;)

More than Sony has.

Do you have a link to the Toshiba A1 breakdown? There's no use discussing it without seeing whether there are some equally bizarre claims made.

http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=189600999

http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=189600999

Ok cool, thanks.

Well... it certainly could stand to be delineated more along the PS3 breakdown, but these are the major points:

http://i.cmpnet.com/eetimes/eedesign/2006/chart1_062306.gif

HD-A1 total BOM: $674; with cables, testing, remote, packaging, etc... >$700

* Intel P4, Broadcom BCM7411, 4 x ADSP-2126x SHARC DSPs = $137

* 1GB DDR(2?) RAM, "three other types of DRAM," 256MB flash, 32MB MirrorBit = $125

Those are the only specific components we're given. Using the chart we are told:

* Total IC costs (inclusive of memory - and should include the semi costs above): $366.27

* Optical drive: $200

* Electro-mechanical: $40.37

* Mechanical: $21

* Passive: $10.47

* Discrete semiconductor: $7.62

* Other $28.08

...so, yeah - totally opaque and pretty hard to actually analyze. Obviously arbitrary numbers like $200 for the optical drive make you question the origins of the figures, and the memory costs - at $125 - seem high (even considering the cost of memory back in '06 compared to now). The rest is just a total mystery, because they don't tell us what parts falls under those categories; essentially we're stuck guessing without a paid-for report from iSuppli.