Exploring the Unknown - NASA's History Office

506
Total Semiconductor Sales—$B
30
20
10
Figure 1. Project world semiconductor market
SPACE AS AN INVESTMENT IN ECONOMIC GROWTH
Large Scale
Integrated
Circuits (LSI)
0
0
1975 1980 1985 1990
[8] 5.0 FINANCIAL ANALYSIS
The ten plant economic analysis baseline was selected on the basis of satisfying 10%
of the 1985 LSI silicon substrate market. The estimated 1985 Earth manufactured silicon
sales for LSI of $0.64B shown in Figure 1 would correspond to an annual production of
0.47M kg of wafers at $1360 per kg, equivalent in kg to the output of 200 space manufacturing
plants. Because of increased processing yield, however, only 110 plants would be
required for the same number of integrated circuits with each plant satisfying about 1%
of the 1985 LSI material market.
To illustrate the potential economic feasibility of the space manufacture of silicon ribbon,
the allowable cost of $7560/kg is compared with the manufacturing cost of
$2930/kg. This comparison results in a positive economic benefit of $4630/kg. In Figure
11 all the costs and sales for the three years of design, development, test, engineering, and
fabrication, the five years of production, and one year of run out are included over the
five year production period for a ten plant operation.
Figure 11 illustrates the distribution of all the cal-
$900M Sales 118,000kg at $7560/kg
$460M Pretax Earnings
(51% of Sales)
$180M Launch and Depreciation
$140M Selling and Administrative
(15% of Sales)
$120M Revisit and Raw Materials
Total
Semiconductor Sales
Integrated
Circuit Sales
LSI Sales
Figure 11. Pretax earnings (10 plants, 5 years)
culated cost elements for space manufacturing and
the resultant earnings. The pretax earnings are 51%
of sales. The costs include launch (Shuttle user
charge $21M/launch), depreciation, selling and
administrative cost at 15% of sales, the shared-launch
revisit charge of $840/kg, and raw material cost of
$70/kg. If production continues after the fifth year
when all the launch and depreciation costs are
expensed, the pre-tax earnings for subsequent years
would be 71% of sales.
While it is important that the potential value of
silicon ribbon manufactured in space is about two
and one half (2-1/2) times the space manufacturing
cost for a ten plant operation, space [original placement
of Figure 11] manufacturing must also be evaluated
in terms of the capital investment and risks
involved. Capital investment decisions must take into
account the time value of money; that is, a dollar
spent on plant today is worth more than the promise
2
1
Material Sales—$B