In article <[email protected]>, Peter Alfke wrote:
> The IC business is not so much different from other businesses.

Well, not many other businesses see their products' performance/cost
increase exponentially with time.

[ snip lots of stuff I actually agree with. ;-) ]

> 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.

I don't doubt this is true, but it only covers the supply half
of the equation. You also have to look at the demand side,
because if a successful business model demanded cost reductions,
that could probably be arranged on the supply side.

Once an FPGA has been designed into a circuit, engineering
costs of changing to a different part are high (and has non-zero
risk -- management hates that!). This is a natural form of
"lock-in", or monopoly. So, without multi-vendor competition
for an existing chip footprint, and prices _can_ stay unnaturally
"high" (or in this case, not drop).

Where competition does kick in is for _new_ designs, which
(duh) involve _new_ parts. Here the competition is, as Peter
wrote, fierce. "Design wins" are a very big deal to both brand
A and X. After a brief period of (they hope) high volume,
high profile success -- part of which is leading-edge cost
effectiveness from the buyer's perspective -- the business system
settles down to the operating scenario of the previous paragraph.

So the fundamental difference between FPGAs and, say, SRAM
(that leads to the effect that Steve noted and found unnatural),
is the lack of cross-vendor competition for pin-compatible parts.

- Larry