IC parametric cost estimation: A precise approach for cost engineers

Calculating the costs of integrated circuits (ICs) is a regular challenge for cost engineers in the electronics and semiconductor industry. Although traditional methods such as bottom-up costing deliver precise results, they require in-depth knowledge of production processes, machine investments and material consumption. An efficient alternative to this is parametric cost estimation, which offers a structured and data-driven approach to determining IC costs.

At the heart of the parametric method is a cost model that takes into account technical parameters, product type, packaging and market-related information. This model makes it possible to produce a reliable cost estimate for specific IC components with relatively little effort - especially when detailed production data is missing or difficult to access. For cost engineers, this means a considerable simplification of the calculation process and the ability to make quick yet well-founded decisions.

With microcontroller ICs, such as those used in the automotive industry, the number of computing units (cores) is a decisive factor for the costs. The more complex the structure, the higher the price. Memory size is also a key driver, as this area takes up around 80% of the chip area. Larger memory directly leads to higher manufacturing costs, as more space is required on the wafer.

Another key criterion in parametric estimation is the clock frequency. Higher frequencies indicate more powerful components, which require smaller structure sizes and more advanced technology nodes. This in turn increases manufacturing costs, particularly in the area of lithography. The investment in EUV lithography equipment is enormous - an aspect that must be taken into account in any cost estimate, even if not all details from the supply network are available.

The parametric method offers the advantage that various technical and economic factors are combined in one model. This allows realistic cost estimates to be developed even without precise knowledge of individual production details. This is particularly useful in early project phases or when it comes to benchmarking between different technologies or manufacturers.

The importance of market information in parametric IC costing should not be underestimated. Component prices are not only determined by technical characteristics, but also by supply, demand, production volume and location factors. Incorporating such data significantly improves the accuracy of the models and enables realistic forecasts.

Ultimately, parametric estimation should not be seen as a replacement, but rather as a supplement to detailed bottom-up costing. It offers a scalable solution for complex costing scenarios where speed and flexibility are required. For cost engineers, this opens up a versatile set of tools that can be used precisely and efficiently - especially in dynamic market environments and with rapidly changing technology standards.

The further development of such models - for example through the integration of artificial intelligence or automated data analysis - promises even greater accuracy and adaptability in the future. For now, however, IC parametric cost estimation is already an indispensable part of the toolbox of modern cost engineers.

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🔗 White paper source: White Paper Cost Calculation Integrated Circuits (PDF)

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