"SO, HOW MUCH DOES a Cell cost? Other than the fact that you can't buy one right now, and the Playstation 3 is about a year out, it does cost money to make. From what we understand, each wafer run through the fab costs $9-10K, and IBM gets about 65 good chips per wafer. A quick look at the wafer shown at MPF shows that if these numbers are true, yields are not all that hot.

This would put each raw Cell on sale at a price tag of almost $150 give or take a bit. Toss in $25-30 for the packaging, and you are at a non-trivial number for a console. Assuming $175 for a 'solder to the board' working Cell, and you are at about half the cost of the console with just the CPU. Add in the GPU, RAM and a HD, and you are in loss-leader territory.

Hopefully yields will go up before the PS3 launches, there are about 200 good sites on the wafer, 2 per 'square', so there is room for IBM to knock $100 or so off the cost. Either way, it looks like IBM and Sony have a long uphill climb for the next console." [link]