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Comment by xondono | Hacker News Reader

The original margin for overclocking was in fact a result of being efficient.

Let’s say you build 1000 chips and bin them in two categories 900 came out near peak performance. Then you get orders for 200 of the top performance item, and 700 of the low tier. What are you supposed to do? Build another 7k chips and store the high performing ones?

The obvious solution, pick 600 top performing chips, relabel them as low tier, sell them at lower margin, and if needed you can start the next batch.

From computer accesories to top tier processors, the problem is not in profit margins, is in cashflows.

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I feel the obvious solution wouldn't be to handicap your own product, but simply sell the same processors cheaper when they stop selling.

I've never heard of farmers who intentionally make their produce worse before selling it, they simply sell it cheaper if there isn't enough demand. If you make a lot of houses that don't end up popular, do you go and smash the roof and take away the plumbing, or sell the same house at a lower price?

Actually some farmers do the exact same thing.

Some farm products get sorted too, mostly because produce for human consumption needs to be eye catching (people don’t buy ugly food). Industrial clients don’t really care (who cares if the apples are uggly if I’m making juice anyway). This means good looking fruit sells at a premium.

If this year is particularly benevolent with your crops, but no one will buy your pretty apples, what are you supposed to do? Just let them rot? You ship it to the juice producer and call it a day.

This sounds like a company that is very bad at predicting demand. Presumably in 2021, Intel can predict relative demand between its product bins quite accurately?

The fact is that the demand for the high end is always much lower than successful chips and they need to have a sizeable gap to justify those chips.

Also yields and bins improve significantly over a product cycle so it's not set in stone.

Predicting demand is only really useful if you can tailor your yield function and doing so provides savings.

Intel doesn’t choose to make X number of top bin and Y number of the next bin, they try to optimize for as much of the top bin as they can manage.

A lot of 6 core processors have actually 8 cores, but two of them had flaws so they got disabled. The conclusion of this has been AMDs strategy, where everything from low tier CPUs to server grade use the same design, and products are built after binning the chiplets.

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