POA Costs and Benefits
With the passing of more than two dozen generations of Moore's Law, the cost of a single logic transistor is now approaching zero. With very low unit costs for manufacturing highly complex system chips, the risk of a new design is increasingly tied to non-recurring expenses (NREs) incurred during the design, prototyping, and verification phases of bringing a new chip design to market.

For modestly more NREs and unit cost, a single POA chip may replace what traditionally would have required a chipset design program with multiple chip designs. While modestly more expensive to design and manufacture, the savings per year far outweigh the additional costs (Figure 2 below).

Figure 2. POA Verses Chipset Savings

Due to the sensitivity of price erosion as electronic component inventory ages, the capability to reduce inventory and forecast error results in large savings for manufacturing. The savings increases as volume production ramps. Additional considerations are the development costs of debugging and verifying three chips rather than a single POA device.

With regards for forecasting a single POA chip across three device configurations as opposed to forecasting a product mix for a chipset with three different die, end customers will also be much happier since allocations due to forecast error will be substantially reduced. Reducing the risk of stocking out will also result in increased revenue and market share.

Each design start has a different set of requirements both functionally and economically depending on the targeted application and market forecast. For cost sensitive and high volume consumer electronic chip designs, the ability to cover a product segment with a single chip provides a number of competitive advantages. These advantages are not only economic.

As illustrated above, a POA approach will produce development and operational cost savings, but will also create new ways of attracting increased market share (Table 1 below).

Table 1. POA Pro's and Con's

The manufacturing owner will be able to better optimize inventory by selling all configurations from a single Stock Keeping Unit (SKU) that is configured and marked just prior to shipping. Likewise, the owner of marketing responsibilities will be able to price products with restricted features low and still have the opportunity to sell these customers premium feature at a later date.

Before POA, if a customer purchased a slower computer chip, she may experience buyer's remorse for not having spent the extra money to get a faster machine. With a POA device, that same customer would have the option to "activate" higher performance, as well as other premium features at a later date if she chooses.