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Comment by steve19 | Hacker News Reader

What I don't understand is does it really cost a company like WD that much to license or just buy already manufactured chips?

It would seem taking risks on new architectures, and all the extra development time (both chip and tooling) would far outweigh the cost of just licensing arm.

Can someone explain the economics of it all?

Don't get me wrong, I am all for a free competitor to ARM's near monopoly on the mobile embedded space. I don't just get it.

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The killer your missing is 'architecture license' versus 'IP' license. The former gives you the right to modify the architecture in your designs (add instructions, non-standard peripherals, alternate memory buses, Etc.) a standard 'IP' license just lets you essentially plop down a standard chip and innovate in the peripherals without touching the system controller at all.

Folks like WD want a processor that is cheap, and specialized like running an error correcting algorithm across spectrum. Generic CPU is too slow, custom CPU is fine. Custom CPU where there is already a lot of other support because other people are using it, is super fine.

Unlimited right to use / modify is a really valuable thing for these companies.

I think the issue is really just one of scale. If you ship 400M drives a year (as the global hard drive industry did last year), a cost savings of $1 is a lot of money that goes into your pocket/R&D. If you're making 10000 of something, making a custom chip is almost certainly going to cost you a fortune; if you're making tens or hundreds of millions of something, that cost gets amortized very quickly, I imagine.

If WD is making their own chips, it almost certainly isn't to save a couple grand a year; it's probably to save many millions.

I spent a little bit of time Logitech's R&D department back in the late 90's, they were doing all they could to shave two pins off a chip. It cost them a terrible amount of money, including a custom package and the difference in price per mouse must have been on the order of a few pennies. But the enormous amount of devices shipped more than made up for the R&D investment.

Yeah, in consumer electronics the hardware engineers have knife fights in the hallways over resistors. Well, not that bad. Probably.

"Can't you do that in software?" 50M units later you understand the reason why that hardware guy made your life a living hell for two weeks just before release, because what he did saved ten cents on the motherboard and at scale that's real money.

Oh man, so much this. I'm going to steal the "knife fights ... over resistors". That so perfectly captures the whole process.

Well WD has total sales of $15.13bn with a cost of goods of $10.8bn if the chip and license for arm costs $3 and they can get the costs to $1 with the chip doing exactly and only what they need at that scale it’s a meaningful impact on cost of goods thus bottom line.

they are less than 0.3, not 3.

It is not uncommon to have lots of simple processors in one chip. One could manage low power mode, another encryption and boot, and another core functionality required in a hard drive. When you have 3-4 cores per device the license fees start to add up.

When you get large enough, doing it yourself can become cheaper than buying it, and small %0.5 improvement projects can have big benefits since they accumulate.

RISC-V feels like CPU hardware's linux moment right now.

My favorite part of RISC-V is that it has 30+ years to prove it is the correct solution (for most situations).

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