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Author Topic: New chip maker - caution suggested  (Read 8148 times)

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Offline sprogman

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Re: New chip maker - caution suggested
« Reply #30 on: February 27, 2015, 02:39:57 pm »
I find it amazing that decoders haven't got cheaper. Electronics have plummeted in price over the last 10 years,
Not the sort of components used in decoders and not for the production volumes of decoders.

Andrew

Offline njee20

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Re: New chip maker - caution suggested
« Reply #31 on: February 27, 2015, 02:44:45 pm »
But the quantities being produced must have increased a vast amount in the same time period. DCC (particularly in n) was firmly in it's infancy 10 years ago, I've no idea what the split is these days, but the share of folk going DCC isn't shrinking I'll wager...

I agree that Bachmann aren't producing as many 6-pin decoders as Sony are televisions (for example), but still, surprises me.

Offline Nigel Cliffe

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Re: New chip maker - caution suggested
« Reply #32 on: February 27, 2015, 05:26:54 pm »
I think you (njee20) are going to be very surprised as to how small the DCC business is.

- Nigel

Offline MikeDunn

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Re: New chip maker - caution suggested
« Reply #33 on: February 27, 2015, 05:45:02 pm »
Well ... think about all the components (electrical only) that go into such a TV ... there are hundreds of them.  Look at a DCC chip - a handful of items go on that ...

It's not the individual items making up the end component (be it a Sony TV or a Bachmann 6-pin chip), it's the making of the end item ...  The components on DCC chips likely are cheap as chips (sorry  :D) - you just need to look at a site such as RS or Farnell to see that  (ththough you'd be forgiven if you looked at Mouser to base your comments on !  :worried:  Talk about rip-off ...  :thumbsdown: ). 

There just aren't that many DCC chips made up in the whole scale of things ...  We may think we're a large market, especially when you add in the OO/HO and larger aspects of the hobby - but we aren't ...  That's not to say someone coming in & making a new (small !!!) chip can't do it cheaper - they could.  But the whole DCC market is measured in tens of thousands - the Sony TV market in millions, and that's before you add in the other TV manufacturers ... ...

Offline njee20

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Re: New chip maker - caution suggested
« Reply #34 on: February 27, 2015, 06:04:30 pm »
I think the market is tiny, I've said as much, but that's not my point.

I'm saying that the market has grown and prices have increased. I've no idea on the numbers, but I wouldn't be at all surprised if the market has grown 5 fold in the last ten years. I'm not talking numbers, because they're still very small, but compared to the same market 10 years ago it has grown, and yet prices have risen.

There are few areas of manufacturing whereby a product gets more expensive if you increase the volume of production by a factor of 5! It doesn't matter if you're going from 5 units to 25, or from 10 million to 50 million. Just surprises me, that's all.

Perhaps all we need is for the Chinese to jump in on it, as is clearly happenning. If they can nail a smaller 6 pin decoder I'll buy a job lot! A 6 decoder going bang within 10 seconds of use is rather easier to swallow than a 40 one doing it...

Offline MikeDunn

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Re: New chip maker - caution suggested
« Reply #35 on: February 27, 2015, 06:28:21 pm »
I see what you mean, but I still think the prices are about right (sadly) ... As to the Chinese coming aboard - who do you think really makes these things  :D

Volume has increased, yes, compared with 5 years ago - but so have manufacturing costs (Chinese factory raises 20% year on year, remember), including raw material and power costs.  Add on the massive increase in the number (and quantity of) gadgets now made, and DCC manufacturing slots are constantly being squeezed ...  It's far more profitable to make a few hundred thousand of an item than a few thousand, especially when you need to re-jig the production lines more often between the small quantity groups ...

If I knew what the logics needed were within the programming - I'd see about trying to make my own (large scale first of course) !  It's probably not that difficult ... and once you have the logic & know what component needs to be where, the board layout is easy, as is finding a producer making it (I have a design for something I plan to get made in China at some point - maybe next year).  But I don't have the time to investigate :(

Offline njee20

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Re: New chip maker - caution suggested
« Reply #36 on: February 27, 2015, 07:41:56 pm »
You know what I mean about the Chinese - if you start being able to buy direct, or without the 'shop front' of a brand then it'll get cheaper. It's not like you get any after sales care, if they go pop the manufacturer shrugs and says 'yeah, that'll happen!'.

Interesting thought about making one yourself.

Offline sprogman

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Re: New chip maker - caution suggested
« Reply #37 on: February 27, 2015, 08:20:42 pm »
DCC decoders use mature components based on mature technology sold at commodity prices whereas smart phones, tablets and other tech are always at the bleeding edge using the latest generation of components and can, initially at least, command a premium.

Andrew

Offline njee20

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Re: New chip maker - caution suggested
« Reply #38 on: February 27, 2015, 08:53:05 pm »
So isn't that another reason decoders should be cheaper by now...?  :-\
« Last Edit: February 27, 2015, 09:20:58 pm by njee20 »

Offline MikeDunn

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Re: New chip maker - caution suggested
« Reply #39 on: February 27, 2015, 10:34:16 pm »
You're still not seeing the manufacturing issues for niche items ...

There aren't many made at a time (let's say they want 10,000 for this year - that isn't really a lot ...), and you have the set-up and break-down of the manufacturing lines to add into the costs.  Do this for a lot of small runs, and each becomes expensive compared to a massive run such as the power boards of a TV shared across all models from that company (including monitors as well).  If it takes a day to setup & a day to break down, a short run may be half that period - you have to charge 3 days for 1 day's production.  A large run may last a week or more with the same 2 days overhead - the cost gets spread out more.

Factor in new tech that manufacturers want to push out rapidly, and are willing to pay extra for to jump to the head of the queue, and a DCC decoder gets pushed both backwards in the queue and attracts a higher premium to make.

If you were a PCB manufacturer, what would you want to make ?  10,000 of something you get a few bucks for apiece, or 250,000 of something you get ten times that for at about the same daily cost to you ?  It's basic economics.  We don't like it, but there's nothing we can do (except go into competition  :smiley-laughing:)

Offline njee20

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Re: New chip maker - caution suggested
« Reply #40 on: February 27, 2015, 10:50:11 pm »
Well I now get the point you were making about TVs, but that still ignores my point that scale has increased, and prices.

Using your numbers - say they want to sell 10,000 this year, totally get that it's not a priority for an electronics firm. But 10 years ago they probably didn't even sell 1,000, ergo they're even lower priority and yet they were cheaper...

I'm giving up anyway, my experience from electronics in other industries suggests this is a pretty unusual case, but is obviously accepted as the norm! I'll keep my eye on AliExpress for a decent 6 pin decoder at a sensible price, and I'll update on this one when I've had a play!

Offline MikeDunn

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Re: New chip maker - caution suggested
« Reply #41 on: February 28, 2015, 10:04:09 am »
10 years ago we didn't have tablets, smart phones, LED TVs, etc etc etc ad nauseum :)  Everything seems to be made with electrical components these days - and Supply & Demand rule.  The more you want to buy & have turned into something else, the cheaper those components become.  Contrariwise, if you're on the low end of the scale, you have to pay more as well as having to fight for assembly timeslots.  Yes, scale for DCC chips has increased - but the assembly market has effectively shrunk as a multitude of new items have come along, competing for components and assembly slots.  And no-one has even mentioned company overheads !  I am aware of at least one company that puts a 30% overhead onto everything before they work out the end prices to include their profit ...  Out of curiosity, is your experience within the industry or as a customer ?

Re cheaper a decade ago - diesel cars were nowhere near as numerous, yet the price of diesel was a lot cheaper than petrol (let alone against current prices) - by your reasoning, that's wrong in todays market where diesels are such a large player yet the cost to us seems to be always at least a 5ppl premium for a product in high demand ...  Anyway, as you say - enough of this; far too complicated & involved for hobby railroadists like us :)

Do let us know how you get on though with that decoder !

Offline njee20

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Re: New chip maker - caution suggested
« Reply #42 on: February 28, 2015, 10:20:04 am »
Quote
Out of curiosity, is your experience within the industry or as a customer ?

Both - in the context of bicycle lights. Technology has moved on hugely, prices have come down, production runs are small (probably smaller than decoders, as unit cost is significantly higher). You now get far more advanced electronics in a light, which is far brighter (admittedly basically due to LED manufacture) for comparable or less money. Thinking of a specific brand I've been involved with. Alongside that you can buy direct from China, it's vastly cheaper, but the reliability is questionable. As we're getting questionable reliability from the companies charging lots I struggle to see what we're losing...

The diesel argument is flawed, because its more expensive across the board. For that analogy to fly it would be that diesel has got far cheaper for mass produced cars, but more expensice if you're driving a car made in small production runs.

I really don't buy that 'we now have tablets and LED TVs' either. Do you think its the same number of factories as 10 years ago?!
« Last Edit: February 28, 2015, 10:21:10 am by njee20 »

Offline Railwaygun

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Re: New chip maker - caution suggested
« Reply #43 on: February 28, 2015, 11:05:15 am »
i think that the question is not one of manufacturing economics ( ably discussed above) but whether someone has got good NMRA -compatible s/w in a reliable chip package, at a reasonable cost.

it seems we have a cheap chip with possibly good s/w, but in an older size package.

Bleeding edge costs ( as any iPhone owner can attest)!

so lets await on-track testing and hope that they can do a smaller 2nd generation product.

Nick R
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Offline Only Me

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Re: New chip maker - caution suggested
« Reply #44 on: March 01, 2015, 12:00:59 pm »
Had two more delivered, both useless... One couldnt be read at all by the sprog, the second was placed into a 108 put on the programming track.  I clicked the identify loco button on the JMRI software and the chip caught fire!!!!

Never seen one burn up in such spectacular fashion... So i retract all my previous posts re these and go back to my tried and tested motto...

BUY CHEAP BUY TWICE!!

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« Last Edit: March 01, 2015, 12:02:39 pm by Only Me »



 

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