How Much Does it Cost to Build a P55 Motherboard?
by Anand Lal Shimpi on August 21, 2009 3:00 PM EST- Posted in
- CPUs
In the golden age of motherboards there were dozens of manufacturers and profit margins were nice and healthy. Manufacturers could differentiate themselves based on performance, quality and features. The CPU folks had a different plan in mind. AMD and Intel have been on the road to integration for the past two decades and the motherboard manufacturers have largely suffered because of it.
When the memory controller was in the chipset and there were 3 or 4 competitors in the chipset space, motherboards actually performed differently. These days the memory controllers are integrated onto the CPU die and performance is as high as possible. SATA, audio, ethernet and USB are all either fully integrated into chipsets or only require a small support chip on the motherboard itself. Within the next decade or so these features will move onto the CPU die as well.
My first 430VX motherboard that eventually spawned into AnandTech set me (actually my parents, I was 14) back around $130. Prices haven’t really changed, yet the expectations from end users have gone up. Granted there’s this new ultra high end market that didn’t really exist back then, but the majority of motherboards sold have far more features and don’t cost much more than what they used to.
The pressure is on the motherboard makers to deliver affordable P55 solutions. Without affordable motherboards, Lynnfield will fail - so Intel and end users are both expecting a healthy supply of ~$100 motherboards. As I’m about to show you, doing so is quite difficult.
This is the LGA-1156 socket:
The socket itself costs a couple of dollars, but even that is significantly more than LGA-775. The motherboard makers I spoke with pegged the LGA-775 socket at well under $1 per socket. The bulk of the 1156 socket isn’t the cost of the device, but rather the licensing fee that has to be paid to Intel for each socket. I’ve heard numbers approaching $7 per socket, per board once you include the licensing fees. As volumes go up, the price per socket will go down, but for smaller manufacturers this is a tough pill to swallow. It’s far easier to build an expensive motherboard than it is to build a cheaper one.
Intel realizes this and helps the manufacturers with rebates and marketing assistance. So the license fee ultimately may be lower for some makers but getting specifics on this is impossible. Worries of lawsuits abound :)
For the most part the motherboard makers look at the socket and associated licensing fees as part of the chipset cost. Despite Intel moving the north bridge and memory controller on die, Ibex Peak, otherwise known as the P55 PCH is no cheaper than P45:
| Chipset | Price |
| Intel X58 IOH | $70 |
| Intel P55 PCH | $40 |
| Intel P45 MCH | $40 |
| Intel ICH10R | $3 |
If you start at $40 for the motherboard, you’ll need to add another $10 for a 6-layer PCB. A 6-layer PCB is necessary if you want to run SLI at this point, otherwise you can get by with a cheaper $5 4-layer PCB. Mentioning SLI also requires validation and support from NVIDIA. That’s $30,000 up front plus an average of $5 per motherboard.
| Low End | Mid Range | High End | |
| P55 PCH | $40 | $40 | $40 |
| NVIDIA SLI License | $5 | $5 | $5 |
| 6 Layer PCB | $10 | $10 | $10 |
| Audio Codec | $2 | $2 | $2 |
| PCIe Gigabit LAN | $3.50 | $3.50 | $7.00 |
| Power Delivery Circuits | $12 | $16 | $23 - $55 |
| Misc PCB Components | $8 | $12 | $15 |
| Heatsinks | $6 | $10 | $25 |
| Labor/Overhead | $9 | $10 | $24 |
| Logistics/Sales | $9.50 | $13 | $18 |
| Total Cost | $105 | $121.50 | $201 |
An audio codec and Gigabit ethernet will together set you back about $5. Figure more for more expensive codecs and another $3.50 if you want dual GigE ports.
P55 motherboards will have a range of 4 to 24-phase power delivery circuitry. Each phase costs about $2 in components although the high end motherboards with high quality MOSFETs/chokes/capacitors will reach $3 per phase for the digital solutions. If we look at Gigabyte’s 24-phase UD6 that would be about $48 just in power delivery circuitry for the motherboard without volume discounts.
The power connectors, switches, LEDs, I/O back panel and other components on the motherboard cost anywhere between $8 and $15 depending on the type of motherboard. Figure $8 for an entry level micro-ATX board and $15 for the highest end boards with slots and ports aplenty.
What about those fancy copper heatpipes and elaborate heatsinks? They start at $6 and go as high as $25 for the really high end motherboards with high-content copper blocks and pipes.
Then there’s assembly, labor and overhead in testing and producing the motherboard. You can count on about 10% of total material cost for an entry level board, 12% for midrange and 15%+ for the high end boards. The lower the volume the higher the overhead; the more testing required, the higher the overhead as well (gotta make sure those $250 boards work right).
The final costs are related to packaging, sales and actually getting the boards to distributors. Figure about 10% per board on average.
All of this roughly adds up to a low end board costing $105 without worrying about profits. It's only through rebates or very large scale manufacturing that a motherboard maker can even come close to making a profit on an entry-level board. Mid range boards are a bit easier to make but my mid range estimates are definitely on the lower end of the spectrum. For the high end you're looking at raw costs over $200, but at those price points it's far easier to turn a profit.
While we'll definitely see P55 motherboards hit the $100 price point, it's worth realizing how difficult that is to do. As P55 matures, these costs will fall (particularly the chipset) but initially it's going to be a tough race to the bottom.
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Wwhat - Saturday, September 5, 2009 - link
There are 2 ways to go about in business, you can ask a high profit and sell low volume or ask a low profit and sell big volume, in the asian regions they prefer the low profit high volume method in the west they go for high profit and lower volume, and of course you get a focus shift when asian product hit western shores where reseller often make a mess of the asian system by adding too much profit for themselves, especially in he EU where for some reason the businesses are showing more a competition as to how high they dare ask (some research confirms this) whereas in the US the competition fortunately actually is about selling for less than the next man, outbidding him.I recently notice that also on an episode of the british TV show "dragons den", one of money people made an offer which was less than was asked, then another said "I'll match that offer" when you'd expect him to make a slightly better offer than his competitor for the contract.
r31nismoid - Saturday, August 22, 2009 - link
Totally agree.No way they are costing anymore than $70-$75.
Think about it, there is no way known to man a business is only going to be making $10-$15 on a $100 item. It is going to be signifigantly more than that.
If you sell 500,000 units with $10 profit your only looking @ 5mil.
Or 10mil if you sell a million boards... not a chance.
500,000 x $30 = 15mil, a much more reasonable amount.
cactusdog - Saturday, August 22, 2009 - link
I agree. Its an interesting article but there is no way in hell motherboard makers are paying those prices for parts. The only somewhat accurate price is the chipset. Most of the other parts listed in dollars like different connectors etc will really be costing cents or lower dollars especially for makers like Gigabyte and Asus.$100 cost for the cheapest motherboard? Theres no way. The motherboard maker needs a profit, then the distributor takes his 10% and the retailer needs his 10%. I think the real cost would be 50% less than stated in this article. How is it possible for me to buy a $60 motherboard if these prices are true? Sure it doesnt have the newest chipset and has cheaper parts but it gives you an idea of overall maufacturing costs. I dont buy this article at all, sounds like a companies PR stunt to soften people up for higher prices.
BushLin - Tuesday, August 25, 2009 - link
It is my understanding that the main reason for these "24-phase powa" circuits is that very cheap parts are used, they are often cheaper than a higher quality 8-phase solution which can handle more power and deliver it with less noise.Don't believe the (marketing) hype!
sanjeev - Saturday, August 22, 2009 - link
I too agree with Lunyone and yourself. But most of the time these values come down, based on volume, and over period of time.But in the article SLI License demands $30,000 up front. So, if the manufacturer only produces 100 motherboards ( say Limited Ed.)
then you have have to pay the PREMIUM $300 more for your $60 motherboard.
I guess the article was good enough to make your judgement on what value go into a $100 , $150 and $200 point of view. Anand should have covered this $30000 ( i assume this is a direct expense and not an administrative overhead for manufacturers ), based on avg units manufactured per year.
Bottom line, these kind of articles make me a juidicious Customer before i loosen my purse.
just4U - Saturday, August 22, 2009 - link
What does crossfire cost the motherboard makers?InsaneScientist - Sunday, August 23, 2009 - link
Nothing.There's no licensing fee for crossfire.
iwodo - Friday, August 21, 2009 - link
I think the chart shows the WORST possible situation for a MB maker. In reality the component should be 10% and up to 30% cheaper with volume.Especially in the low end. Change the 6 layer PCB to 4 Layer. No SLI. That is 10 dollar cheaper already.
Although you fail to add Support and Technical , Research and Engineering to the Chart. But with the Size of ASUS, 2 dollar per Motherboard should be enough to cover all of it.
So the picture doesn't looks as grime
.
But i always wonder, why the need for Audio Codec, Gigabit ethernet etc when everything is inside Southbridge already.
And do we really need so many Phase of Capacitor?
Zab00 - Sunday, August 23, 2009 - link
>But i always wonder, why the need for Audio Codec, Gigabit ethernet>etc when everything is inside Southbridge already.
That surely is one point I wonder about for long time now. What can e.g. a Realtek RT8111C do better than the one integrated in e.g. a G43?
squeezee - Tuesday, August 25, 2009 - link
The southbridge doesn't integrate everything necessary for either of those functions.For sound, it integrates the HD Audio Controller, but that controller needs a CODEC to actually input or output audio.
The Integrated ethernet controller also needs an intel PHY to work, i wouldn't be surprised if its cost was similar to a full NIC chip from realtek or marvell (which also can be used with nvidia/amd/etc. chipsets).