The REAL Cost for a Custom IC

By _Planet Analog

May 15, 2013

There have been lots of blogs and messages lately about designing a proprietary analog IC. I wrote a blog about doing it on the cheap for $3,000. Reid Wender posted a message about prototyping 200 parts using a reconfigurable IC for $10,000.

Quite frankly, all of these cost comparisons are somewhat irrelevant. It is not about what prototyping costs -- unless you ignore the other non-recurring engineering (NRE) costs, and most people can't ignore NRE unless they are doing this in their garage for the purposes of learning or experimenting. If you spend $350,000 of NRE to design a custom IC where the lifetime buy is 100,000 pieces, it doesn't cost $3 per IC. It costs $3.50 more per unit ($350,000 amortized across 100,000 units) or $6.50. So, let's change the discussion from garages to real programs and talk about the elephant in the room called NRE.

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