I got offers from Nvidia, Qualcomm, Intel, and a few hardware companies for ASIC design positions after my Bachelors. I was the top of my class in a very good school. They all had shitty pay (TC <= 100k in Bay Area, no refreshers). I joined one of the companies and quit after 8 months because the pay was so shitty that I couldn’t even afford the rent, while my friends in FAANG worked less, had free food, and got paid over 200% than I did. I went to Stanford for MS in CS, and I was frankly shocked to find out that my summer internship pay (extrapolated to 12 months) was higher than my TC when I was doing ASIC design. Now I’ve gotten a few offers from tier 1 and tier 2 software companies. Even the lowest offer is over 2X what I got previously, not counting refreshers and bonuses which were non-existent in hardware. My figures were higher than what people in my previous hardware company with 10 years pf exp were getting. While I’m happy that I’ve made the transition, I still love hardware and find it super interesting. I just can’t find an explanation for such huge pay differences. Honestly I feel that the skill set required for hardware was way more rigorous than software, and it was much harder to get a job in hardware. So why in the end does hardware pay so poorly?
Because software scales. Special hardware isn't require most of the time. Just need a general processor and let software do everything else.
Simple economics. Software makes more money for companies than hardware does. Unfortunate for you, but especially at FAANG they’re quite good at turning software into revenue, and software costs very little aside from the development. Hardware has production costs and you have to sell a physical product to make money on it.
This will turn around, probably when current execs retire and stop influencing. I'm not holding my breath for it.
If this is the case, then why would anyone work in hardware? Especially given that it’s not that hard to switch from EE to CS. Also why would anyone major in EE in college in the first place?
Passion. Some people care less about the money.
Some folks don’t like or are not good at coding. Others love something else. If money exclusively drove decisions then people wouldnt focus on arts,philosophy,basic research. Everybody would code, there would be a surplus of software talent and TC would fall 😂
'Cos ever Tom, Daisy, and Hari CxO decided that cheap hardware made at Foxconn running free Linux was better than high-end, proprietary platforms. It'll all come a full circle, and maybe your kids' CxOs will rediscover Mainframes and pay 3x for hardware skills!
Demand and supply. Hardware is increasingly commodified, while software remains specialized. Phones are cheap, service+apps make more $$. It’s all a cycle until AI can code and software developers are less in demand, then there may be parity, esp. as hardware gets in to robotics and software becomes commodified.
True. Software makes money even while it is crappy, which is through half it's total life!
1. It's a question of supply and demand. The low margins lower demands, and the high rate of hardware graduates over extend supply. Right now there is just a lot of high end software demand. 2. Software systems can get complicated in an organic way much more quickly, and can be leveraged to a much greater degree. Similar to investment banking, this justifies paying for even small increases in talent skill level. Most hardware roles do not have this leverage and thus engineers are often replaceable.
Ther could be many theories why. But it's definitely not because sw is technically more sophisticated than hw.
Actually, because software is so abstract, it is very easy to make it more complex than hardware. Bad design is a great source if complexity too. Also, it's a lot easier and more necessary for one software engineer to understand and touch much larger pieces than in hardware. Hence the premium on better talent. Hardware is just less able to deliver value from better talent in general.
The quality you described is way above average performance. It could be a possible justification to comare top sw vs hw pay, which would be still a different discussion. But OP's story is about avg. sw vs hw.
Related question: at what point did SW overtake HW in TC? Or it was always better paid?
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Cost of producing software is much cheaper than hardware. Raw material cost is non-existent so your gross profit margin is better which leaves over more room for salaries. Also single piece of software can be resold to more folks whereas you have to make unique hardware pieces for multiple customers