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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (18473)	1/11/2003 4:47:30 PM
From: kodiak_bull	Read Replies (2) \| Respond to of 23153

">why shouldn't a chip be priced (and the company producting it) the same as a lug nut?< Fabs to make chips cost billions. I think it also takes a little more skill than producing lug nuts." Gottfried, You're making a fundamental mistake here. Skill has, in the end, little to do with pricing. Supply and demand will determine pricing. If there is a surplus of chips and a shortage of lug nuts (!!), then we know how pricing will go. A lug nut has, since 1968 had a relatively stable price, between 50 cents and $1.00, depending on whether or not it's chrome plated, etc. Do you recall how much a "pocket calculator" cost back then? I remember them costing $400, and only the nerds would buy these incredible replacements for their slide rules (remember slide rules?). Today, you can't even give away those calculator chips, or any of the generations produced since then. Calculators themselves are giveaway items, and my kids use scientific calculators (graphing, etc.) that NASA would have killed for during the Mercury and Gemini programs. I don't know how much the original pentium chip cost, $500? $600? My first Pentium chip was a 90, in 1995, and I guess the chip was about $500-600 of the $2800 machine, or 1000 lug nuts. Today you can buy an upgrade to my Pentium 90, the 166, for $4.99, or 5 or 10 lugnuts. Looked at another way, although lug nuts have maintained their value for 50 years, in just 6 or 7 years the Pentium 166 chip has lost 99.168% of its value. Other areas to look at in terms of skill and cost: compare the skill and effort it takes to produce a decent quality symphonic level first oboeist (private lessons, Tanglewood, Juilliard), and compare the oboeist's salary with, say somebody making stupid rhymes and hunched jumping on a hip-hop video?? Supply and demand, commodities and intangibles. Kb

To: Gottfried who wrote (18473)	1/12/2003 1:22:33 PM
From: Sharp_End_Of_Drill	Read Replies (1) \| Respond to of 23153

Gottfried, >>>Steven, >why shouldn't a chip be priced (and the company producting it) the same as a lug nut?< Fabs to make chips cost billions. I think it also takes a little more skill than producting lug nuts. Gottfried<<< Plants to produce gasoline, etc. from crude cost many billions of dollars - but yet we have gas selling for less than drinking water and milk. There is a major glut of refining capacity, plants have negative values (mainly due to environmental issues), etc. It's all a question of capacity, and right now the chip fabs have tremendous overcapacity. I've also seen lately that the Chinese and Koreans are adding more fabs for the big diameter stuff - exactly what we don't need. I see nothing but pain and lower valuations ahead for semis. Sharp