[jpark]

Actually, at very high volumes (where the non-recurring engineering cost is sufficiently amortized), the larger equivalent component is more expensive, since you are using more material to manufacture the component.

Obviously, other factors, like process yield can be a factor here as well, since a lower process yield for the smaller component would increase its price.

[hartror]

Other factors include things like larger components might use cheaper materials and factories need to be tooled up to produce newer components.