Key Takeaways

  • The cost of a custom IC can vary greatly depending on complexity, size, and process technology.

  • Estimated costs for a simple custom IC range from $10k to $50k.

  • Complex designs with advanced process technology can cost upwards of $100k to develop.

  • NRE (non-recurring engineering) costs account for a significant portion of custom IC expenses.

  • Partnering with experienced foundries and chip designers can optimize costs and ensure project success.

Understanding the Factors Influencing Cost

Complexity and Functionality

The complexity of the IC design directly impacts its cost. A basic design with limited functionality is less expensive to develop compared to complex designs with multiple functions and high-performance requirements.


The size of the die, measured in millimeters, affects the cost of fabrication. Larger dies require more silicon wafer area, leading to higher production costs.

Process Technology

The latest process technologies, such as advanced FinFET or GAAFET, offer improved performance and reduced power consumption, but they come at a higher cost due to the complexity of manufacturing.

Non-Recurring Engineering (NRE) Costs

NRE costs cover the upfront expenses associated with developing a custom IC, including design, simulation, layout, verification, and testing. These costs typically range from $10k to $50k and can vary depending on the complexity of the design.

Volume and Yield

The number of units required and the expected yield rate of the fabrication process also impact the cost. Higher volumes and higher yields can lower the overall unit cost.

Estimating the Cost of a Custom IC

Determine Design Complexity

Estimate the complexity of the design by considering the number of gates, memory elements, and I/O ports required. Also, consider the level of performance and reliability needed.

Research Process Technology

Investigate the process technology options available from different foundries. Consider the trade-offs between cost, performance, and power consumption.

Calculate NRE Costs

Estimate the NRE costs based on the complexity of the design and the services required from the foundry and design team.

Factor in Volume and Yield

Estimate the volume of units required and research the expected yield rates for the chosen fabrication process. This will provide an approximate cost per unit.

Optimizing Costs for Custom IC Development

Partner with Experienced Foundries

Foundries with expertise in custom IC fabrication can offer cost-effective solutions and guidance throughout the development process.

Utilize Design Automation Tools

Design automation tools can streamline the design process, reducing the time and effort required, and thus lowering costs.

Optimize Design for Testability

Designing the IC for testability reduces the cost of testing and debugging during production.

Consider Design Reuse

Reusing existing design blocks or IP cores can significantly reduce NRE costs and accelerate development time.

Collaborate with Chip Designers

Experienced chip designers can provide valuable insights and design strategies to optimize cost while meeting performance requirements.


The cost of a custom IC can vary significantly based on several factors. By understanding the key cost drivers and implementing optimization techniques, businesses can develop custom ICs that meet their performance and budget requirements.

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