China’s domestically developed “Loongson” CPUs have extremely low cost-performance ratios—so what exactly is the problem?

With the widespread adoption of computers and DIY (English Do It Yourself (the abbreviation of) has become widespread, allowing ordinary people to purchase Intel through various channels. AMD of the CPU Assemble your own computer by pairing it with components such as the motherboard, memory, hard drive, power supply, and more. In today’s world... CPU Under conditions of high price transparency, there is a fascinating phenomenon: Yang. CPU Good performance, low price—and it’s local. CPU The price doesn't necessarily compare to that of foreign products. CPU Low, yet its performance is only on par with foreign brands. CPU of the 20%-40% 。

With Intel and a certain domestic brand CPU For example, Intel’s Celeron and Pentium. CPU The selling price is 250~500 Core for mid-to-high-end, Yuan. i5、i7 The selling price is generally in 1000~2000 Not equal, yet a certain domestic... CPU Also adopt X86 The instruction set, in terms of performance, only... i5 of the 25% Right, but the government procurement price isn't any lower. i5 Low ...... is domestic CPU Is the company “heartless”? Or is there something else going on behind the scenes?

To answer this question, we first need to start with... CPU Seeking the answer in the cost structure. From the initial pile of sand to the final tiny fragment— CPU During this process, numerous steps—from wafer fabrication and mask creation to packaging and testing—must be completed. So, what exactly are the costs involved in all of these stages?

One, CPU The cost structure looks like this:

1 Chip cost

To manufacture CPU The first step is to manufacture wafers (which, after being sliced into small pieces, become semiconductor chips). The primary material of wafers is silicon, the second most abundant element in Earth’s crust (sand is mainly composed of silicon dioxide). The production of wafers involves three steps:

First, electronic-grade silicon is produced. Metallurgical-grade silicon is obtained by reacting carbon with silicon dioxide in an electric arc furnace, and then further purified. The crushed metallurgical-grade silicon is reacted with gaseous hydrogen chloride to produce liquid silane. Through distillation and chemical reduction processes, electronic-grade silicon is finally obtained, with a purity level as high as... 99.999999% 。

Second, silicon ingots are produced. Electronic-grade silicon is placed in a quartz crucible and surrounded by graphite, then continuously heated, with the temperature maintained at approximately... 1400 ℃, the furnace is filled with an inert gas, ensuring that while the electronic-grade silicon melts, it won't be contaminated by impurities due to chemical reactions.

Next, a seed crystal is immersed into the crucible. The pulling rod, holding the seed crystal, rotates in a direction opposite to that of the crucible’s rotation. Using the rotating pull method, the seed crystal is slowly pulled vertically upward. Molten polycrystalline silicon adheres to the bottom end of the seed crystal, eventually forming a cylindrical silicon ingot.

Third, the silicon ingot is cut into circular wafers. The resulting silicon ingot is sliced horizontally into individual round silicon wafers, which are then ground to remove any uneven cuts and scratches. Finally, a chemical-mechanical polishing process is used to make at least one surface smooth and mirror-like.

Currently, the mainstream international practice is to adopt... 12 Inch wafers. As for the domestic market, SMIC and HuaLi Micro both have... 12 Inch-scale wafer fabs—companies such as Intel, Samsung, and SK Hynix also have facilities on the Chinese mainland. 12 Inch wafer fab. Although... 12 The investment in inch-level fabs is far greater than... 8 Inch-level wafer fabs—however, the larger the wafer size, the more chips can be cut from a single wafer, thereby reducing the cost per chip. Once the equipment costs are amortized across chip shipments measured in the hundreds of millions, using larger-diameter wafers not only makes chip prices more competitive but also allows companies to generate sustained, incremental profits over time.

Therefore, the cost of a chip is the cost incurred in producing wafers from silicon dioxide, allocated to each individual chip. Simply put, it represents the cost of the material—silicon wafers—used for each chip.

2 Masking cost

After obtaining the wafer, we need to manufacture. CPU , and the following steps must also be performed:

First is wet cleaning. The wafer is cleaned using various chemical agents to ensure that its surface is free of impurities.

Second is photolithography. A lithography machine uses a laser beam to pass through a mask patterned with circuit traces. An objective lens compensates for various optical aberrations, reducing the circuit pattern proportionally before projecting it onto a silicon wafer. Subsequently, chemical development processes are employed to reveal the circuit patterns etched onto the silicon wafer.

(Lithography schematic diagram. At the top is the mask; in the middle is the objective lens, which compensates for various optical aberrations; finally, the circuit pattern is proportionally reduced and mapped onto the silicon wafer.)

Third is ion implantation. Different substances are implanted at various locations on the silicon wafer, thereby forming field-effect transistors (FETs).

Fourth is etching. An etching machine is used to remove the excess material from the wafer, thereby obtaining the desired structure.

Fifth, plasma cleaning. A weaker plasma beam is used to bombard the entire chip, achieving a cleaning effect.

Sixth is heat treatment—instantaneously heating the wafer to... 1200 Above Celsius degrees, then slowly cooled down, allowing the implanted ions to be better activated and thermally oxidized, thereby forming the gate of the field-effect transistor in the wafer.

Seventh is vapor-phase deposition. The wafer surface is further refined and coated using physical and chemical vapor-deposition equipment.

Eight is electroplating, chemical treatment, and mechanical surface finishing.

Therefore, mask costs include wafer fabrication costs as well as depreciation expenses for lithography machines, etching machines, and physical and chemical vapor deposition equipment, among other factors. The level of mask costs is closely related to the process technology used—for example— 40/28nm The process is already highly mature and has low costs. 40nm The mask cost for low-power processes is: 200 Tens of thousands of US dollars; 28nm SOI The process is 400 Tens of thousands of dollars; 28nm HKMG The cost is 600 Tens of thousands of dollars.

However, at the very beginning of the latest manufacturing process, the costs were quite substantial. In 2014 Just appeared this year 14nm During the manufacturing process, there were reports that its mask cost was 3 hundreds of millions of dollars. Of course, as time goes on and TSMC and Samsung gain control... 14/16nm The manufacturing process—current prices shouldn't be this high. Intel is currently developing... 10nm According to Intel’s official estimates, the mask cost will need to be at least... 10 hundred million dollars.

The high cost of the new manufacturing process stems, on the one hand, from the hefty R&D expenses associated with the new technology and its relatively low yield rate, and on the other hand, from the exceptionally high prices of equipment such as lithography machines and etching machines.

Taking the Daoguang lithography machine as an example, domestic commercial mass production remains stalled. 90nm，40/65nm Although the lithography machines have achieved technological breakthroughs, they still haven't been commercialized for mass production and may still be in the laboratory stage. Wafer fabs such as SMIC and HuaLi Micro... 28nm Lithography machines are entirely dependent on imports and come with a rather hefty price tag— ASML Lithography machines at mainstream technology levels cost tens of millions of dollars, while the most advanced ones... EUV When the lithography machine was first introduced, its price once reached as high as... 1 hundreds of millions of dollars……

(Lithography machine)

Each piece CPU The cost of the mask = Total cost of the mask / Total output, therefore, if output is small, CPU The cost will be relatively high due to the mask costs. However, as long as production volume is large enough—say, with annual shipments numbering in the hundreds of millions—the enormous output will spread the mask costs so thinly that they become negligible.

3 Packaging and testing costs

(Wafer Flip-Chip Mounter)

After the wafer has undergone the aforementioned steps such as photolithography and etching, it still requires manufacturing equipment—including post-process lithography machines, thinning machines, dicing machines, wafer handling systems, wire-bonding machines, and flip-chip bonding machines—to package the wafer. These machines stack the previously processed wafer together with the substrate and heat sink, ultimately forming the rectangular-shaped device with pins and a trademark that we see in our daily lives. CPU 。

Packaging costs refer to the funds required for this process. Under typical conditions of large-scale production, packaging costs generally account for a significant portion of the hardware cost. 5%-25% Right, but... IBM For some chips, the packaging cost accounts for roughly half of the total cost; reportedly, it has even reached as high as... 70%......

The test can identify the key characteristics of each processor, such as maximum frequency, power consumption, and heat generation, and determine the processor’s grade—for example, sorting a batch of chips into categories like: i5 4460 、 i5 4590 、 i5 4690 、 i5 4690K Wait—after that, Intel can set different prices based on different tiers. If chip production volumes are large enough, the testing costs will... CPU The proportion of total costs is negligible.

Already highly mature 40nm Take low-power process as an example; the process technology used is... CPU , its testing cost is approximately 2 The U.S. dollar, the encapsulation cost is approximately 6 Dollar.

4 Design cost

Design costs primarily include patent costs, development tool costs, engineers’ salaries, and facility expenses, among others.

First is the cost of patents. Currently, in China, only a few companies—such as Loongson and Shenwei—follow an independent and self-reliant technology path. IC The design company can handle its own designs. CPU/ The microstructure does not contain third parties. IP For example, Shenwei. 411 Shen Wei 1621 Loongson 3A2000/3B2000/3A3000/3B3000 and microstructure GS464E All are free of third parties. IP And other domestic... IC Design firms are basically still in the process of purchasing from overseas. IP During the integration phase, the main... IP The suppliers are all foreign companies.

Including HiSilicon, Spreadtrum, Unisoc, Allwinner, Rockchip, and Newland, among others. ARM Camp IC Take design companies as an example—without exception, these companies rely on... ARM of the IP Authorization—HiSilicon’s Kirin 950 I just made the purchase. ARM Cortex A53 and A72 Not only do you have to pay a hefty one-time licensing fee, but you also have to pay a certain patent royalty for each chip you produce...

This kind of purchase IP The authorized business model, in actual practice, is... ARM It’s as if a money-printing machine has been turned on, while domestically... IC Design firms can only earn a modest living, directly leading to domestic... ARM Camp IC The design firm “has the heart of a drug dealer but earns the money of a cabbage seller.”

Second, development tool costs. To design CPU It's inseparable. EDA With the assistance of electronic design automation (EDA) tools—such as front-end design simulation environments, low-power design flow tools, timing simulation tools, and tools for chip back-end design, among others.

To purchase these EDA The tools are also quite expensive, especially in China. IC Design company EDA Most tools rely on foreign companies, while domestic R&D... EDA Huada Jiutian does the best job with tools, but its market share is relatively small.

Third, costs such as engineers’ salaries. Like IBM 、 AMD 、 Marvell Wait IC In the design company, there is... 5 The monthly salary for engineers with more than one year of experience is... 25K-50K Among them, domestic companies HiSilicon, Spreadtrum, and Unisoc have... 5 The monthly salary of engineers with more than one year of experience is also... 15K-30K between. Suppose a IC The design company has 500 People (Approximately at Intel Corporation) 10 10,000 employees), each employee with a monthly salary 20K Calculating it, the labor cost alone would amount to per year. 1.2 100 million yuan……

Fourth are other costs—such as rent for company premises, promotional and marketing expenses, administrative overheads, and various miscellaneous expenditures. These costs vary significantly from one company to another, and in some cases, the differences can be quite substantial.

II. Domestic CPU Why are the prices remaining high?

To illustrate this issue vividly, let’s assume two domestically produced... CPU ：CPU-X and CPU-Y。

First, let's look at the chip cost.

Suppose CPU-X Adopt 40nm Process, chip area 200 Square millimeter; CPU-Y Adopt 28nm Process, chip area 140 Square millimeters (the smaller the process node, the smaller the chip area).

A piece 12 The price of a single wafer is 4000 Dollar, with an area of approximately 7 10,000 square millimeters. By calculation, we can determine that one piece... 12 A small wafer can be cut into... 299 one CPU-X or 495 one CPU-Y ( 40/28nm The technology is already highly mature, and the cost differences in cutting are so small that they can be safely ignored.

Since, when processing and cutting wafers into chips, it is impossible to guarantee... 100% As a result, there is an issue of yield rate, with... 49% Yield calculation, one piece 12 A small wafer can be cut into... 146 One that meets the good-quality standard CPU-X or 242 one CPU-Y , finally 12 The price of a wafer inch / The finished wafers obtained through cutting allow us to draw the following conclusion:

Adopt 40nm Process of CPU-X The chip cost is 27.3 Dollar;

Adopt 28nm Process of CPU-Y The chip cost is 16.5 Dollar.

It can be seen that adopting more advanced manufacturing processes can effectively reduce wafer costs.

Next, let's look at the mask cost.

As mentioned above. 40/28nm The process has become highly mature. 40nm The mask cost for low-power processes is approximately... 200 Tens of thousands of dollars.

If CPU-X The output is 10 Ten thousand pieces—then allocated to each piece. CPU The cost of the above is 20 Dollar;

If CPU-X The output is 100 Ten thousand pieces—then allocated to each piece. CPU The cost of the above is 2 Dollar;

If CPU-X The output is 1000 Ten thousand pieces—then allocated to each piece. CPU The cost of the above is 0.2 Dollar;

28nm HKMG Mask cost is 600 Tens of thousands of dollars,

If CPU-Y The output is 10 Ten thousand pieces—then allocated to each piece. CPU The cost of the above is 60 Dollar;

If CPU-Y The output is 100 Ten thousand pieces—then allocated to each piece. CPU The cost of the above is 6 Dollar;

If CPU-Y The output is 1000 Ten thousand pieces—then allocated to each piece. CPU The cost of the above is 0.6 Dollar.

Thus, it can be seen that, under the same processing conditions, as... CPU The output has increased, CPU The cost of masks will gradually decrease. Even if production reaches hundreds of millions, even when using the most expensive ones... 14/16nm Process technology—its mask costs can also be reduced to... 3 Within the U.S. dollar.

Let's take another look at the packaging and testing costs.

Packaging costs typically account for a portion of the hardware cost. 5%-25% By the way, as I mentioned earlier, for example... CPU-X Adopt a very mature 40nm Process, with testing costs of approximately 2 The U.S. dollar, the encapsulation cost is approximately 6 Dollar.

Finally, consider the design costs and other expenses.

Design costs are very difficult to quantify because each company... IC The number of employees at the design company varies; purchase. IP consumption, purchase EDA The costs of the tools vary widely. Other costs are equally difficult to quantify—there are significant differences among companies in terms of funds spent on venue rentals, promotional marketing, administrative expenses, and other overheads.

Since design costs and other expenses are very difficult to quantify, the author adopts the pricing strategy commonly used by low-margin chip design companies internationally. 8:20 The pricing method used to calculate the final selling price is that the hardware cost is... 8 In the case of, the pricing is 20 (Without purchasing from abroad) IP Under these circumstances, this pricing is generally achievable. Don't think this price is high—actually, it's already quite low. Intel’s typical pricing strategy is... 8:35 ， AMD Has reached in history 8:50 ……

CPU Hardware costs include chip costs. + Masking cost + Testing cost + The packaging cost consists of four parts.

If CPU-X The output reaches 10 Ten thousand pieces—then the mask cost is 20 Dollar, plus 27.3 The chip cost of the U.S. dollar and 8 The sealed-test cost of the U.S. dollar, its hardware cost is: 55.3 Dollar, adopt 8:20 Pricing method, with a selling price of 138.25 Dollar.

If you were to... CPU-X The output reaches 100 Ten thousand units, with a hardware cost of 37.3 Dollar, adopt 8:20 Pricing method, with a selling price of 93.25。

If CPU-Y The output is 10 Ten thousand pieces—then the mask cost is 60 The U.S. dollar, previously calculated the chip cost as: 16.5 The dollar amount, plus the packaging and testing costs, then the hardware cost is: 85 Around the dollar, adopt 8:20 Pricing method, with a selling price of 212.5 Dollar.

If CPU-Y The output is 100 Ten thousand pieces—then the mask cost is 6 Dollar, hardware costs are approximately 30 The U.S. dollar, its selling price is approximately 75 Dollar.

It is obvious that although using more advanced process technologies will increase the overall cost of masks, it can reduce the cost of wafers. As long as production volumes are large enough, this can bring down the cost per wafer. CPU The cost of masks has been significantly reduced, enabling the adoption of “more expensive process technologies.” + Larger yield attribute CPU will be better than having “cheap manufacturing processes.” + The “lower yield” attribute CPU are lower in cost, especially when there are differences in output. 100 Under these circumstances, the cost gap will be as vast as an abyss.

That domestic CPU Why isn't the output increasing? Products like Loongson and Shenwei, which are domestically developed... CPU Since starting from scratch and building its own technical system, it will inevitably clash with the existing... Wintel (Microsoft + Intel’s system is incompatible, and... PC The market is being Wintel Under monopolistic conditions, the marketization process is naturally hindered and proceeds with great difficulty.

And although Zhaoxin also adopts... X86 Instruction set, can run Windows There are no issues with the software ecosystem, but the technology is entirely dependent on VIA Technologies, which naturally drives up costs. Coupled with weak performance, the product lacks market competitiveness—even if production capacity is relentlessly expanded, the more it produces, the greater its losses will be. As a result, the company can only seek opportunities in the Party, government, and military markets, leading to inherently very limited production volumes.

In short, setting aside the domestic... IC Leaving aside the gap in design capabilities between design firms and Intel, let’s focus solely on how process technology and production volume affect performance and cost—specifically in domestically produced... CPU Even when using very inexpensive fabrication processes to produce very small quantities, the resulting cost still exceeds Intel's. CPU The higher it is, the more expensive it is.

Meanwhile, Intel can rely on its monopolistic position in the market: even when using the most expensive manufacturing processes, it leverages its massive production volume to drive down costs and reap super-normal profits, enabling its profit margins to reach as high as... 60%。