Do Xilinx Fix Their Prices?

[Jim Granville]

Ray Andraka wrote:

When was the last time you asked for technical support on a resistor?

Actually, more recently than I asked for support on a CPLD but I do
get your point...

Part of the pricing
pays for the tech support, which is more or less a per customer charge rather than a per piece
charge. Naturally, if you are buying a large quantity, the tech support per peice is going to
be considerably less. Tech support is one of the distributor's largest costs.

I believe I said that.
The question is how to justify the $40 -> $150, alongside
the $4 -> $15 device price/volume curve.
FPGAs are a great example of where bigger devices just give you more
of everything - the software tools are identical, and in most cases so
are the building blocks, and even large chunks of data.
So the tech support cost of the large/small fpgas are largely similar.

The real reasons for such lazy pricing have more to do with the
bean-counters, and wanting to have a certain % margin on stock.
Which is OK if the disti's actually HAVE stock...

Solution would be to have a WEB page sales system, that has a
relatively high ($20-$30-?) line item processing charge, and a
more sensible true device cost on the silicon itself.
Still makes a nominal profit, but accelerates the design-wins,
and ramp-ups of the devices...

-jg

 

[rickman]

Steve wrote:

Peter Alfke <peter@xilinx.com> wrote in message news:<4029259F.1BC8DDF6@xilinx.com>...
This is really simple, Capitalism 101:

Manufacturer invents and makes part.
Uses seval competing distributors to sell the part to the public.
Manufacturer optimizes his profit by charging distributor a certain
price, and also publishes a pricebook with "Manufacturer Recommended
Resale Price" MSRP.
Distributor can sell in any quantity and for any price he wants, high or
low, but he will try to optimize his profit.
Customer will buy at the lowest possible price consistent with the
desired level of service and support.
This is true for food, shirts, cars, and ICs. For Tiffany's, Nordstrom,
Safeway and CostCo.

This is really simple; Oligopoly 101:

Oligopolists value high order quantities highly and small order
quantities as not being worth the hassle.
Oligopolists watch competitors and are happy if all oligopolists in
the market view small order quantities as not being worth the hassle.
Certain oligopolists have a high vested interest in having smooth and
monotonic price vs size curves, which can be maintained by having few
distributors, and *possibly* a say on the prices they charge to
buyers, and *possibly* exert pressure on distributors to toe the line.
Oligopolists are happy.
Those wanting to buy small order quantities are screwed.

But rest assured that we are seriously looking at ways to improve the
plight of the low-volume customer. Some of your complaints did not fall
on deaf ears.

I'll quote the British phrase "the proof of the pudding is in the
eating", or in other words I'll believe that when small quantity
prices come down...

--
Steve

Hey Steve, why don't you get off the soapbox. What you are doing is not
getting you anywhere and is starting to tick me off. Until you give a
call to your distributor and *ask* what price you can get, I don't want
to listen to your rants.

Don't make me come over there...


--

Rick "rickman" Collins

rick.collins@XYarius.com
Ignore the reply address. To email me use the above address with the XY
removed.

Arius - A Signal Processing Solutions Company
Specializing in DSP and FPGA design URL http://www.arius.com
4 King Ave 301-682-7772 Voice
Frederick, MD 21701-3110 301-682-7666 FAX

 

[Steve]

Peter Alfke <peter@xilinx.com> wrote in message news:<402AA3E9.E5A27166@xilinx.com>...

The Columbia Encyclopedia describes oligopoly as:
...the control of supply by a few producers...or by agreements among
members of an industry to restrain price competition...

Does that describe your impression of the relationship between X and A ?
Wow !

I prefer the majority of the definitions on here:

http://www.onelook.com/?w=oligopoly&ls=a

The quick definition on that page sums up my understanding:

"noun: (economics) a market in which control over the supply of a
commodity is in the hands of a small number of producers and each one
can influence prices and affect competitors"

You don't describe the relationship between X and A like the above
definition? Wow!


--
Steve

 

[Steve]

rickman <spamgoeshere4@yahoo.com> wrote in message news:<402ABE46.861C779A@yahoo.com>...

Hey Steve, why don't you get off the soapbox. What you are doing is not
getting you anywhere and is starting to tick me off. Until you give a
call to your distributor and *ask* what price you can get, I don't want
to listen to your rants.

So far in this thread I've been accused of not understanding
economics, pricing or capitalism; seemingly just because I've had the
audacity to question Xilinx's low quantity prices. Basically, if
they're going to patronise me then I'm not going to just sit here
quietly and take it.


--
Steve

 

[Austin Lesea]

Steve,

Question away. I think the thread has allowed folks to vent a little,
and to learn why selling FPGAs is not as simple as they may have
thought. Those that are paranoid, I am afraid we can not help.
Regardless, others benefit from an open and frank discussion. I quite
often take a mildly extreme position to help focus the discussion and to
entertain (after all, why would anyone read this stuff if it wasn't
somewhat entertaining?). Anything I have said is not to be taken as an
accusation, but rather as a challenge to explain your views (which you did).

If I offended, I apologize, as that was never my intent.

Austin

 

[rickman]

Steve wrote:

rickman <spamgoeshere4@yahoo.com> wrote in message news:<402ABE46.861C779A@yahoo.com>...

Hey Steve, why don't you get off the soapbox. What you are doing is not
getting you anywhere and is starting to tick me off. Until you give a
call to your distributor and *ask* what price you can get, I don't want
to listen to your rants.

So far in this thread I've been accused of not understanding
economics, pricing or capitalism; seemingly just because I've had the
audacity to question Xilinx's low quantity prices. Basically, if
they're going to patronise me then I'm not going to just sit here
quietly and take it.

You are not making any sense. By definition X and A have an oligopoly.
So what is your point? Your questions have no point. Your statments
are about the obvious. You are not telling anyone here anything they
don't already know. You are just acting like a spoiled brat throwing a
tantrum because he can't have dessert.

Are you just trolling or do you have a point?

--

Rick "rickman" Collins

rick.collins@XYarius.com
Ignore the reply address. To email me use the above address with the XY
removed.

Arius - A Signal Processing Solutions Company
Specializing in DSP and FPGA design URL http://www.arius.com
4 King Ave 301-682-7772 Voice
Frederick, MD 21701-3110 301-682-7666 FAX

 

[Steve]

rickman <spamgoeshere4@yahoo.com> wrote in message news:<402C6ABD.2A9E6871@yahoo.com>...

Steve wrote:

rickman <spamgoeshere4@yahoo.com> wrote in message news:<402ABE46.861C779A@yahoo.com>...

Hey Steve, why don't you get off the soapbox. What you are doing is not
getting you anywhere and is starting to tick me off. Until you give a
call to your distributor and *ask* what price you can get, I don't want
to listen to your rants.

So far in this thread I've been accused of not understanding
economics, pricing or capitalism; seemingly just because I've had the
audacity to question Xilinx's low quantity prices. Basically, if
they're going to patronise me then I'm not going to just sit here
quietly and take it.

You are not making any sense. By definition X and A have an oligopoly.
So what is your point?

I was responding to Peter Alfke's comments about X and A not being an
oligopoly:

"The Columbia Encyclopedia describes oligopoly as:
....the control of supply by a few producers...or by agreements among
members of an industry to restrain price competition...

Does that describe your impression of the relationship between X and A
?
Wow !"

Your questions have no point. Your statments
are about the obvious.

From:

http://www.xilinx.com/prs_rls/silicon_spart/03142s3_pricing.htm

"The 3S50, 3S200, and 3S400 Spartan-3 devices with 50,000, 200,000,
and 400,000 system gates respectively, are available for less than
$6.50*. The 3S1000 Spartan-3 device with 1 million system gates is
also available for under $12.00*."

The cheapest XC3S400 (400k gates) in small quantities here:

http://www.plis.ru/price.html?ID=126

is $28.90, that's 4.45 times as expensive. The difference will narrow
when production is ramped up to maximum, but how much will it narrow
to? Three times the price, twice the price?

You are not telling anyone here anything they
don't already know.

Oh, so you don't mind paying highly inflated prices? Fair enough.

You are just acting like a spoiled brat throwing a
tantrum because he can't have dessert.

To be perfectly honest the only person ranting round here is yourself.

Are you just trolling or do you have a point?

I've made my point and I can't be bothered to make it again.


--
Steve

 

[Steve]

Austin Lesea <austin@xilinx.com> wrote in message news:<c0g97i$f971@cliff.xsj.xilinx.com>...

Steve,

Question away. I think the thread has allowed folks to vent a little,
and to learn why selling FPGAs is not as simple as they may have
thought.

I've still not read a good reason why your highest volume products are
so expensive in small quantities.

The reasons that have been given up to now have been that small
companies should pay the same for support costs as large customers
whether or not they use the support. The simple solution to that would
be to charge small companies 75 cents per minute when they ring up for
support, and let the larger companies have their support unchanged.

The other reason that has been given is that distributors have to earn
a living. My heart bleeds for the poor loves...

I believe there are ways that Xilinx could improve their service to
smaller companies such as significantly increasing the number of
distributors to increase competition. Peter Alfke said:

"But rest assured that we are seriously looking at ways to improve the
plight of the low-volume customer. Some of your complaints did not
fall
on deaf ears."

so only time will tell, and it'll be interesting to watch the price of
Spartan 3's over the next year or so...

Those that are paranoid, I am afraid we can not help.
Regardless, others benefit from an open and frank discussion. I quite
often take a mildly extreme position to help focus the discussion and to
entertain (after all, why would anyone read this stuff if it wasn't
somewhat entertaining?). Anything I have said is not to be taken as an
accusation, but rather as a challenge to explain your views (which you did).

I admit accusation was too strong a word.

If I offended, I apologize, as that was never my intent.

No offence taken.


--
Steve

 

[Steve]

steve41@totalise.co.uk (Steve) wrote in message news:<4d3ee211.0402130309.4e48eeec@posting.google.com>...

Austin Lesea <austin@xilinx.com> wrote in message

<big snip>


Anyway, I suggest we leave this thread here so we can let you Xilinx
guys get on with "seriously looking at ways to improve the plight of
the low-volume customer", and of course to avoid rickman doing
something his therapist has told him not to...

Then later in the year when the best-selling Spartan 3 chips are being
shipped in their millions we can all compare the high and low volume
prices again....


--
Steve

 

[rickman]

Steve wrote:

rickman <spamgoeshere4@yahoo.com> wrote in message news:<402C6ABD.2A9E6871@yahoo.com>...
Steve wrote:

rickman <spamgoeshere4@yahoo.com> wrote in message news:<402ABE46.861C779A@yahoo.com>...

Hey Steve, why don't you get off the soapbox. What you are doing is not
getting you anywhere and is starting to tick me off. Until you give a
call to your distributor and *ask* what price you can get, I don't want
to listen to your rants.

So far in this thread I've been accused of not understanding
economics, pricing or capitalism; seemingly just because I've had the
audacity to question Xilinx's low quantity prices. Basically, if
they're going to patronise me then I'm not going to just sit here
quietly and take it.

You are not making any sense. By definition X and A have an oligopoly.
So what is your point?

I was responding to Peter Alfke's comments about X and A not being an
oligopoly:

"The Columbia Encyclopedia describes oligopoly as:
...the control of supply by a few producers...or by agreements among
members of an industry to restrain price competition...

Does that describe your impression of the relationship between X and A
?
Wow !"

Your questions have no point. Your statments
are about the obvious.

From:

http://www.xilinx.com/prs_rls/silicon_spart/03142s3_pricing.htm

"The 3S50, 3S200, and 3S400 Spartan-3 devices with 50,000, 200,000,
and 400,000 system gates respectively, are available for less than
$6.50*. The 3S1000 Spartan-3 device with 1 million system gates is
also available for under $12.00*."

The cheapest XC3S400 (400k gates) in small quantities here:

http://www.plis.ru/price.html?ID=126

is $28.90, that's 4.45 times as expensive. The difference will narrow
when production is ramped up to maximum, but how much will it narrow
to? Three times the price, twice the price?

I think everyone who is interested in using these parts, know the
prices. That has been discussed here before. Your posts shed no new
light on the matter. Also, as I and others have mentioned before, if
you pay list price it is your own fault. Like when you buy a new car,
anyone can get a price cut just by asking. But instead of asking, you
start spewing here.

You are not telling anyone here anything they
don't already know.

Oh, so you don't mind paying highly inflated prices? Fair enough.

Actually, if I am only building 10 boards, no I don't mind paying more
for the parts because my time and expense far over shadow the cost of
the chips. As others have pointed out, this is not a factor of there
being an oligopoly. This is a simple fact of volume production. But
then that has been explained to you before.

You are just acting like a spoiled brat throwing a
tantrum because he can't have dessert.

To be perfectly honest the only person ranting round here is yourself.

Are you just trolling or do you have a point?

I've made my point and I can't be bothered to make it again.

Good, you have already said it more than enough times.

Why is this such an issue with you? You have never explained how this
pricing affects you. Is there a board you want to sell that is priced
too high because the qty 10 prices on FPGAs are too high?

--

Rick "rickman" Collins

rick.collins@XYarius.com
Ignore the reply address. To email me use the above address with the XY
removed.

Arius - A Signal Processing Solutions Company
Specializing in DSP and FPGA design URL http://www.arius.com
4 King Ave 301-682-7772 Voice
Frederick, MD 21701-3110 301-682-7666 FAX

 

[Ray Andraka]

He's always got the option of not using FPGAs if he feels there is a better or cheaper approach.
If he cannot find a cheaper alternative, then there should be no reason to complain, right? If he
can, then he should use that cheaper alternative, and again, there is no reason to complain.
Obviously, the price point for FPGAs is not so far off the mark since people do use them.

--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759

 

[Jim Granville]

Steve wrote:
<snip>

I believe there are ways that Xilinx could improve their service to
smaller companies such as significantly increasing the number of
distributors to increase competition.

That sounds good comming off the tongue, but could actually be
counter-productive to the problem, which is high low volume prices.
Much of that business hits MOQs from vendors, and also the
'can't be bothered' threshold in Distis.
Adding MORE distis is less efficent, as now their chance of selling
stocked devices is less, since the number of customers has not increased.
Most would respond by saying - "Sure, we can get that in for you - MOQ
is xxx pcs, leadtime is yy weeks"

That's why a web/transaction based model would work better. You
focus one stock point for the low volume orders, and rationalize it
further by stocking only best spec region devices, with maybe
a sprinking of 'absolute cheapest' (slowest, worst temp range).
Semiconductor Companies are _already_ doing this - just not yet the
big FPGA ones.

-jg

 

[Martin Euredjian]

"Ray Andraka" wrote:

Obviously, the price point for FPGAs is not so far off the mark since
people do use them.

Ray, I think Steve is screaming at the delta between low and high quantity
pricing, not necessarily at any specific price. In other words, if the high
volume guys paid 50% less than low volume buyers he might not object. He is
seeing a 400% differential and that bothers him.

The rationalization might be that there are no real differences in the cost
of manufacture for the chips that the small guy is buying (vs. the large
buyer). Or the production of tools, documentation, etc. And, armed with
that, I think he's saying that he can't see what in the process of getting
chips to a small operator can justify a factor of 4x or more.

I can't say that I am in complete disagreement with the idea of questioning
pricing practices. However, I have yet to decide not to do a product based
on the price of small quantities of FPGA's. Today, thanks to FPGA's, we can
design systems that were impossible to realize not too long ago. On a
price-per-FF basis you can't beat them. And, to repeat what I said in an
earlier post, communication with the chip manufacturer is very important.
They are sensitive to your needs and I've found Xilinx (through Austin and
others) to be genuinely interested in helping the little guys.


--
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Martin Euredjian

To send private email:
0_0_0_0_@pacbell.net
where
"0_0_0_0_" = "martineu"

 

[Magnus Homann]

steve41@totalise.co.uk (Steve) writes:

The other reason that has been given is that distributors have to earn
a living. My heart bleeds for the poor loves...

Well, their hearts aren't bleeding for yours either.

They spend 90% of their time going for 10% customers. Or the one
customer having 50% of their business...

I believe there are ways that Xilinx could improve their service to
smaller companies such as significantly increasing the number of
distributors to increase competition. Peter Alfke said:

So that no disti would make any effort at all except maybe send an
invoice. Not so good.

Homann
--
Magnus Homann

 

[Tim]

Given the calamitous drop in the dollar recently, find
a distributor who quotes in dollars and accepts payment
in Euros...