ASIC Development Costs are Lower Than You Think

The minimal development costs for an ASIC are much lower than people think. These costs go toward:

1. Designing the ASIC; the output is typically a GDSII file (a one-time cost: engineers salary + software licenses).
2. Producing the mask set at the foundry (a one-time cost).
3. Producing the wafers at the foundry (typically a fixed wafer lot cost + a cost per wafer).
4. Slicing the wafer, and packaging the chips (fixed cost per wafer or per chip).

The cost of #1, designing the ASIC, is the most variable. It can be literally a few thousand dollars for a simple ASIC (eg. a Bitcoin mining ASIC with simple repetitive SHA-256 units), up to billions of USD (eg. the Cell processor development which cost 2 billion USD). In the case of a simple ASIC, the cost of #2, the mask set, is the biggest. #1 and #2 are usually refered to as NRE (non-recurring engineering) cost.

So what is the total cost for designing and producing a small initial batch of ASIC (sum of costs #1 through #4)? Let's hear from real-world sources who did produce Bitcoin mining ASICs:

• The Bitfountain company said: in China, the cost is ~150k USD for 130nm, and ~500k USD for 65nm. They ended up developing a 130nm ASIC.
• The BitSyncom company, also in China, posted enough information to reveal that their cost at the TSMC foundry were 200-300k USD for their 110nm ASIC. This matches the amount they raised via crowd funding (300 units * $1200 each = $360k).

So, there you have it, from two horses' mouths: ~150k USD for 130nm, 200-300k USD for 110nm, and ~500k USD for 65nm, as of 2013.