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.
Everyone knows that major analog companies will usually pass when it comes to doing a custom IC for marginal or low quantities. This is partly because of NRE — which is certainly high and closer to $2 million, not $350,000 — but also the lost opportunities while scant resources are focused on one part for one customer. With a custom, you win or lose everything on one customer.
Before I break down the NRE elements, we have to agree on one point. A custom IC is almost always a complex system level part with many analog functions and some moderately complex digital. If this isn't true, and you could do the function with a $1 microcontroller and five $1 standard analog parts, you will be much better off just buying standard parts. Reid called this buying from Inertia Corporation.
When a brand-name analog IC company undertakes an IC development, they talk about teams, equipment resources, and materials other than the ICs. Lets talk about the team members first.
The team usually includes several people. In a small operation, the team's tasks might be divided between a small group or subcontracted out, but nevertheless, the job function/cost is still required. A typical team includes the following members:
- A Product Definition Engineer who writes the specification. They work closely with the customer.
- Analog Design Engineers who take the specification and design the analog portion of the IC and small digital sections. Generally, on a primarily analog part, an analog designer is the chip lead.
- A Digital Design Engineer who writes the register transfer logic (RTL) code for digital sections that are more than 100-1000 gates.
- A Place and Route (P&R) Engineer who takes the RTL code and generates a layout for just the digital logic gates.
- A Top Level System Simulation Engineer whose job it is to simulate the whole mixed mode IC, including building models for the analog pieces.
- A Layout Designer who handcrafts the IC schematic into a physical database, drops in the digital P&R, and routes up the pads and peripheral electronics. They also manage all of the design and electrical rule checks as well as comparing the schematic to the layout.
- A Test Engineer who designs the test hardware and writes the production test program.
- A Quality Engineer who manages the quality assurance testing of the new part such as ESD tolerance and high temperature operating life (HTOL).
- A Product Engineer who supports the part after release to production to ensure yields, and manages customer returns.
- An Application Engineer who is tasked with validating the part from the customer's perspective.
And finally, there is a Program Manager to oversee the IC development team, timely delivery of equipment, boards, parts, and scheduling of time on testers and burn-in ovens, etc.
While people are expensive, tools are not cheap, either. Each one of the above people use different software tools. The design tools are the most expensive, and are usually charged against a project on a time basis. Design tools, especially digital tools, can easily cost $1 million for one year.
Next in line is the hardware for evaluation, testing, and qualification. This list includes items such as applications boards, burn-in boards, ESD testing boards, and load boards for IC production testers. Burn-in boards are the most expensive, since they require one hundred or more HTOL sockets for roughly $100 a piece. Even with a metal-programmed part, you need to run full qualification just to make sure that a 2mA current is not routed with a 500μA-capable line.
And then finally there are the equipment resources, which include burn-in ovens and mixed mode IC testers. Mixed-mode testers can cost $1 million. Tester time and oven time are billed against the program.
Summarily, the team, supplies, and resources are not cheap. Mixed mode development NRE is typically measured in the millions, and consequently, the production volumes need to be in the tens of millions, otherwise the value proposition is not there. Perhaps it is possible to reduce two million to two hundred thousand, but I don't see how it can be much cheaper without taking dangerous short cuts.
If a company undertakes a custom IC development, it is an expensive endeavor fraught with lots of risk. And it is an all-or-nothing proposition. This in no way means that custom ICs make no sense. They do — but for limited purposes that need to be closely scrutinized. It's not just about what it costs to see a few parts.