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How can one chip be so fast?
The predictions for computing power for one cell chip is in the range of 1 trillion floating point operations per second. That could be achieved by 256 simple processors all running at around 4 GHz. Intel is now talking about 1.75 billion transistors on one Itanium chip. A really good simple processor can be done with about 1 million transistors. The whole concept boils down to make alot of simple processors rather than a few complicated ones.

These numbers assume chips built at 90nm in early 2006. The cell will tranistion to 65nm in 2007. Probably allow 1000 processors at 6 Ghz = 6 TFOP's. By 2009 we will be at 45 nm - 2000 processors at 8 GHz = 16 TFLOP's.

Since the cell will be the heart of the the playstation, they are immediately in largest volume production so each chip will always cost the the range of $100

Moores law does a step change then accelerates.

The step change is based one just one cell chip, but the cell is designed to be paralleled both internally and with multiple chips. So by 2009 $25,000 will buy you 2 PetaFlops