Economics of ASICs

In this section we shall discuss the economics of using ASICs in a product and compare the most popular types of ASICs: an FPGA, an MGA, and a CBIC. To make an economic comparison between these alternatives, we consider the ASIC itself as a product and examine the components of product cost: fixed costs and variable costs. Making cost comparisons is dangerous—costs change rapidly and the semiconductor industry is notorious for keeping its costs, prices, and pricing strategy closely guarded secrets. The figures in the following sections are approximate and used to illustrate the different components of cost.

1.4.1 Comparison Between ASIC Technologies

The most obvious economic factor in making a choice between the different ASIC types is the part cost . Part costs vary enormously—you can pay anywhere from a few dollars to several hundreds of dollars for an ASIC. In general, however, FPGAs are more expensive per gate than MGAs, which are, in turn, more expensive than CBICs. For example, a 0.5 m m, 20 k-gate array might cost 0.01–0.02 cents/gate (for more than 10,000 parts) or $2–$4 per part, but an equivalent FPGA might be $20. The price per gate for an FPGA to implement the same function is typically 2–5 times the cost of an MGA or CBIC.

Given that an FPGA is more expensive than an MGA, which is more expensive than a CBIC, when and why does it make sense to choose a more expensive part? Is the increased flexibility of an FPGA worth the extra cost per part? Given that an MGA or CBIC is specially tailored for each customer, there are extra hidden costs associated with this step that we should consider. To make a true comparison between the different ASIC technologies, we shall quantify some of these costs...............