 part of the industrial cost is constituted by the depreciation of the technological facility that is divided among the number of produced pieces. 2. Bill of Material of the Final Component. This is the cost of all the elements used for building the PIC, except the active chip. The package, the fiber V groove, the align- ment optics, the thermistor (if present), and SO on are all accounted for here. The value of this bill of material (BOM) out of the global industrial cost of the compo- nent can be around 40% too. The BOM decreases if volume increases, but not SO rapidly as the chip cost. A decreasing law, much slower than linear is reasonable, at least up to the moment in which the volume is huge, in the order of several mil- lions. Since we are dealing with highly specialized chips for DWDM applications, a volume of ten million pieces does not exist in the market. In case this architec- ture becomes successful, typical volumes for one chip producer would be on the order of 300,000 (one chip realizes the interface for 10 wavelengths). 3. Work Cost. Since a set of operations have to be carried out piece by piece, for exam- ple, fiber active coupling, the contribution of the work to the cost is not negligible, and SO we will assume it to be about 15% of the total. If we accept the rough assumptions given earlier, we obtain a simple cost model of a DWDMI PIC that produces the behavior of Figure 10.4. In this figure, the behavior of a similar Normalized industrial cost (admin) DWDM PIC FIGURE 10.4 Estimated cost trend of DWDM PICs compared with Volumes produced in 1 year (log10 (N)) the cost trend of high-performance FPGAs. Telecommunication Networks model applied to a high-performance field programmable gate array (FPGA) is also reported for comparison. The result is that the FPGA cost goes down much faster than the PIC cost and reaches an asymptote beyond one million pieces as low as 0.8% of the initial preproduction pieces. As far as the PIC is concerned, the slope is smaller and the asymptote is reached at about