The Ridiculously Smart Guide to Developing your own ASIC

Facebook is doing it, Google is doing it, even Amazon and Bosch are doing it. They have started designing ASICs (Application Specific Integrated Circuit, aka SoCs, ICs, chips). In fact, system companies are becoming the new ASIC designers and manufacturers. If you are a non-silicon company, this paper will help you understand what is an ASIC and how you can benefit from ASICs in your business.



More startup companies are placing ASIC as a central component of their product — allowing them to differentiate from day one. These are not just Facebook, Google or Cisco, but rather emerging businesses that are creating robots, coffee machines, vacuum cleaners, sensors and other type of products.


If you are here, you’re clearly willing to learn about ASICs and this paper can radically improve your odds of success.


But first thing first, why do you think that Facebook, Google and Amazon are using ASICs in their products?


Businesses are typically thinking in two directions: either reducing expenses (cost) or improving revenue (sales). Using this logic, one can guess that Facebook could reduce its server farm power consumption (cost) with a custom ASIC, or help run servers even faster and thereby provide better customer experience (value).


The popularity of ASICs is increasing. Surprised? Then consider (1) all the hardware products around you use chips and (2) yes, software may be conquering the world but all the software in the world is running on chips. Just have a look at the numbers yourself. The semiconductor industry is booming and set to increase. Companies are producing more silicon and more ASICs will be rolling out to the market every year.



So yes, you are not alone. Many are mistakenly thinking that ASICs are an ideal solution for tech companies.  This is incorrect. In fact, today, any non-tech product can be “smart” if it has a small brain and wireless connectivity.




It’s exciting to see how creative companies can be, when they understand how to add more value to customers with a small chip.


What is an ASIC

ASIC is an Application Specific Integrated Circuit. it’s essentially an electronic chip that is designed specifically for your needs. Almost every electronic product today has at least one ASIC internally that is designed and produced for this purpose only.


An ASIC can consist of a CPU, sensors, input and output interfaces, memory, wireless interface and much more. Some of those blocks are already available in the market and can be used in your ASIC immediately and some may require development (they are called IP cores).


Your ASIC will be realized on a piece of silicon (e.g. die) and put into a plastic package for protection. The silicon is manufactured in a silicon foundry and the packaging is done in a packaging house.


Here is a picture a standard Bluetooth chip:



ASIC benefits

ASIC offers multiple benefits:


  • Reduced size – if you take the functionality of many off-the-shelf individual chips and put them into a single chip you’ve obviously cut the product size to the smallest possible size.
  • Reduced power consumption – see above
  • Reduced bill of material cost – see above
  • Greater value – will integrating different blocks into a single chip create added value to your customer (better image resolution, faster network speed, better wireless performance, etc)?
  • Copy protection – although it is possible to copy an ASIC, it’s much more difficult and time consuming than copying a PCB with off-the-shelf chips.



You should take the ASIC avenue only if you cannot meet your goals using standard off-the-shelf chips. ASIC development cost can be high and will require you to make an upfront payment for the engineering and production tooling cost (in addition to the unit cost).


ASIC design cost varies from vendor to vendor but consists usually of the following items:


  • ASIC development cost – this item will cover the engineering hours required to design your ASIC. Hint: ASIC design companies that have done similar ASICs in the past will most likely be cheaper as the can utilize their past experience.
  • ASIC development software – ASIC engineers are using software tools to design and simulate the ASIC before they go to production. These tools are called EDA tools. This cost will probably be included in the ASIC development cost (above).
  • IP cores – these are ASIC blocks or sub-blocks that have been already designed by IP core companies and can be acquired per project. The cost of the IP block is lower than designing the IP block from scratch, so it’s a clever idea to use them.
  • Prototype cost – this item will cover the cost of the 50-100 first porotypes that can be used for product testing and validation.
  • ASIC production tooling – these are the tools that will be used in production to manufacture your ASIC. Usually consisting of: maskset, package tools and a test solution.
  • ASIC qualification – in this phase, you’ll need to perform several reliability test to ensure your ASIC manufacturing process is robust and generates quality products.


How to start?

There are two major items you need to clear in order to make a great start with your new ASIC project.


Do you really need an ASIC? If you believe that an ASIC will benefit both your company and your customers, you should do an ROI exercise to check whether the investment and the risk will pay off.


For instance: if you have a PCB with off-the-shelf chips that costs 50USD and an ASIC will cost 5USD (45USD saving on BOM alone), and your ASIC NRE cost is 1MUSD (covering ASIC development cost and production tooling etc), then you reach breakeven at 22K units. If you exceed this volume – you are about to make a great deal.


Is an ASIC feasible? You might have some great ideas about the ASIC functionality and performance but are those ideas feasible?


Some ASIC vendors offer a service called Feasibly Study whereas they look closely at your “wish list” to evaluate whether an ASIC can satisfy all the reequipments. Some general topics can be discussed over the phone, but some details issues may need actual design work or similar.


Having an ASIC specifications document is the first step in receiving price estimates from ASIC design companies. Without proper ASIC specifications, vendors will not be able to asses and scope the project. If you do not have ASIC specifications document, you can contact us for guidance.

Learn More

ASIC design flow

ASIC packaging

ASIC testing

Die per wafer calculator


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