It’s generally observed that HW TC is about 50% of SW, but what are the reasons? It doesn’t make much sense to me as most of HW companies are in the Bay Area just like the SW ones, so location is not a reason. Also, HW requires more education than SW, in which a Bachelor’s is enough for most positions. In terms of company finances, almost all HW companies are making tons of profits while many SW companies are operating at a loss (e.g. Uber) or a very thin profit (e.g. Salesforce), so it doesn’t make sense that HW jobs pay way less than SW... Any ideas/thoughts?
HW costs more $$ to develop so companies reduce TC for HW engineers to offset total cost of product.
The answer is always supply and demand. Demand may be overrated, self-induced or have a big bias but that is a different story
It’s all in the head. Challenge this idea often and people will start seeing why good hardware is more important.
Because hardware engineers don't negotiate as well. software engineers know they can go back and ask for more and ask for more and ask for more and ask for more just like they can change the code change it more change it more.
Hw engineers get paid less because operating cost. It takes lot of money for tapeout if issues are found. Fixes post tapeout are very hard and expensive. Another reason is it takes lot of investment for design and planning the chip before making single dollar of investment. Usually single chip design runs for 3-4 years. Experience in HW is very difficult to gain and they need to retain existing engineers and invest money on engineers. So because of business complexity and investment proposition HW engineers get paid less. On the other hand investors are willing to invest in SW companies based on future growth so stock price keep going up. HW is older technology and investors invest based on current profits and growth is limited whereas competition from low cost companies is fierce. Another reason is, sw companies are selling HW at cheap cost eg. google cromecast, fire phone were sold at lesser cost than manufacturing. SW companies make revenues from ad business on lost margins in selling HW. Whereas they pay HW companies based on selling cost of device. They take advantage of competition in HW industry to reduce price down. In other words SW companies are leader in technology space and they squeeze HW companies. Overall i think HW is real engineering long term sustainable whereas SW will sprint for few decades and later situation is not that rosy. Anyways it’s better to ride current wave and make money where there is opportunity.
Supply and demand curves. Simple as that.
Supply and demand, too few Cs grads. Not tapeout costs. Also poor profit margins in hardware due to non American competition .
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Scale. Software engineers write code for any industry, and that code tends to scale in major ways - automating jobs, saving companies from all industries big bucks. So there's big demand for software engineers across all industries. Hardware engineers, on the other hand, are really only needed for hardware design. Their skillset isn't demanded by as many companies or industries. The pay is set more by industry demand than by difficulty of hardware vs software college coursework.