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What's the point of having a 7-core GPU model? Are these otherwise unsaleable 8-core chips? Does it make production that much cheaper?
Yeah, it does. There is a probability of defects anywhere on the wafer. If 100% of the circuitry on a die is essential, then you have to throw away the dice where the defects occur. If you have redundant circuitry, then you can keep the dice with the defect by disabling the affected circuits.

If you look at the floorplan for the M1, the GPU region takes up a significant portion of the die. If a defect occurs just about anywhere in that region, it really only affects one GPU core. By disabling that one core, the die is still viable.

There are different ways of thinking about the economics, but one way would be to essentially think of Apple getting the 7 core dice for free. If they held to the 8 core spec, those would be lost yield. They still need to be packaged and tested, so the final SoC isn’t free, obviously.
 
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What's the point of having a 7-core GPU model? Are these otherwise unsaleable 8-core chips? Does it make production that much cheaper?
These are just CPUs that have one unusable core due to manufacturing defects. Instead of throwing a perfectly functional 7-core CPU in the bin Apple is using them for a bit less powerful version of the iMac. It helps reducing waste and saves money.

It is basically the same thing Intel and AMD do with their processors and this is the reason why they have so many different variant with different clock speed and core number. In most cases it is the same CPU. From a single wafer for i7 family processor, you can get a dozen i5 and a few i3 depending on the number of defects of the lithographic process.
 
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