Let me answer some of your questions:
The IC business is not so much different from other businesses.
We ( i.e. any IC manufacturer, this is all not Xilinx-specific) sell
largely through distributors, who are independent companies. We tell
them a recommended retail price ( in the US auto stores this is called
MSRP), but -just like the car salesman- they can sell it for any price
they think is appropriate to optimize their profit. (Same as every
grocery store does, too)
Selling in large quantity is always cheaper than selling in small
quantity. The world is full of examples.
Somewhat unique to the IC business is the fast-paced innovation that
allows us to make better and faster new chip designs at ever lower price
per function. But that is due to smaller geometries, larger wafers,
better defect density etc.
Once a specific device has been in production a few years, there is
little chance to lower its manufacturing cost, once the ramp-up problems
are overcome, the yield has been stabilized and the testing effort has
been optimized.
The cost per quare inch of silicon is not going down. Cost reduction
comes from smaller geometries and thus higher packing densities possible
in the new designs.
That's why you see no cost reductions for mature chips. Real old ones
actually go up in price, as their manufacturing volume decreases. (You
pay more for a 74161 today than we did 30 years ago).
This is a very competitive business.

Peter Alfke


Steve wrote:
>
> I've been looking for historical prices of FPGAs to try and get an
> idea of what I might expect to get for a given price for small
> quantities and came across this post:
>
> http://tinyurl.com/36blb
>
> which has a price table for small quantities (<=25) for January 2000:
>
> Spartan
> XCS05 3PC84C 10.00
> XCS10 3PC84C 18.10
> XCS20 3PQ208C 40.40
> XCS30 3PQ208C 45.35
> XCS40 3PQ208C 49.15
>
> Virtex
> XCV50 4PQ240C 55.40
> XCV100 4PQ240C 104.00
> XCV150 4PQ240C 128.00
> XCV200 4PQ240C 157.00
> XCV300 4PQ240C 244.00
> XCV400 4HQ240C 344.00
> XCV600 4HQ240C 581.00
> XCV800 4HQ240C 860.00
>
> I compared the above prices with the prices on these web pages, that I
> assume are up to date because they stock up to date chips:
>
> Spartan: http://www.plis.ru/price.html?ID=121
> Virtex: http://www.plis.ru/price.html?ID=111
>
> and all of the prices on the Russian website are exactly the same
> price today as they were from a different supplier in January 2000.
>
> Why are they exactly the same price?
>
> Do Xilinx tell their resellers what to charge? And if so, isn't this
> illegal?
>
> Also, why is there such an enormous price difference per part between
> massive quantities and smaller quantities? Xilinx make X million of
> part Y, so why do they charge so many hundred percent higher prices
> for small quantities than very large quantities?
>
> As there is such a huge difference in prices between large and small
> quantities, why isn't there a supplier that buys largish quantities to
> sell in smaller quantities so that the supplier makes a profit and the
> purchaser of small quantities gets chips cheaper?
>
> Also, what does happen to FPGA prices over time? Do they just reach a
> final value and they never get any cheaper? That would explain why
> prices would be very similar in 2000 and 2004, but not why they're
> identical. You can get a Spartan 2E XC2S150E-6PQ208C for $20.45 from
> the above Russian website today. What might you expect to be able to
> get for $20 in, say, 2 years' time?
>
> --
> Steve