Insights

The Limitless Future of Custom ASIC Design

UST Product Engineering Team

For much of its history, the semiconductor or integrated circuits (IC) was a standardized chip that powered multiple types of devices. However, exponential technological advancements, such as automation and the Internet of Things (IoT), have accelerated the use of customized devices with specific hardware requirements. In addition, these devices produce gigabytes of meaningful data daily, creating a great strain on the one-size-fits-all semiconductor.

A custom ASIC design is the process of designing a tailor-made, unique, and fully customized integrated chip circuit, specifically for a particular application or product. It eliminates the need for a pre-designed chip, enabling optimal performance and efficiency using a tailored design. Integrating a custom ASIC design offers several benefits, including optimized performance, substantial power consumption reduction, enhanced security and resilience, and greater cost-effectiveness.

As technology companies continue to explore ways to harness personal data and create a universe of interconnected devices, the chip will remain the backbone of modern computing. However, the industry is evolving, and the types of chips companies seek are also changing.

As we discussed in our previous blog, large technology companies have begun creating specialized chips to own more intellectual property, avoid supply chain delays, and drive deeper enhancements and customizations. Companies like Apple and Google (along with other competitors) are developing chips that incorporate end-to-end backward integration from their design agreements.

Semiconductor companies, facing threats from multiple corners, can still compete with internally made chips by manufacturing application-specific integrated circuits (ASICs) design (i.e., customized chips made for specific devices).

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Key Takeaways

• Increased device specialization requires custom-built semiconductors, called application-specific integrated circuit (ASIC) chips
• ASIC helps keep energy low while aiding the transmission of data through interconnected devices
• Bitcoin mining is one trend that is driving significant investment in ASICs
• Other industries, such as automotive, are also driving interest

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What is an ASIC chip?

ASICs are chips designed for a client’s specific hardware or software solution instead of standard-purpose ICs, which work with multiple types of devices.

Custom ASIC design can cost between $200 million and $300 million, depending on the size and complexity, according to ISG. While that is a significant expenditure, companies can amortize that cost over time, making it more palatable to build internally than purchase from external vendors. So, traditional semiconductor companies must demonstrate the value they provide their customers to dissuade them from creating their own chips.

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The move to ASICS

As a dominant semiconductor manufacturer, Intel has invested heavily in ASIC “purpose-built processors.” This way, it has a product offering for every type of client. It can compete against other semiconductor manufacturers and offer a valuable alternative to companies looking to build their own.

All large semiconductor manufacturers are now producing ASIC chips, including Intel, AMD, Samsung, Nvidia, Texas Instruments, and others. KBV Research predicts that the global ASIC Chip Market size will reach $24.7 billion by 2025, driven by several key trends

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Custom ASIC vs alternatives

Custom ASIC

Custom ASICs are tailor-made and specialized for a particular task to optimize performance.

• The efficient design and small size of the ASIC enable lower power consumption and reduce the product footprint.
• The customizable feature of ASICs allows improvement of security functions, protecting against reverse engineering. It also safeguards the company's intellectual property.
• Although the custom chips come with obsolescence assurance, they also face the risk of the chip designs becoming obsolete.
• ASICs are inflexible in nature, as a design cannot be modified once it is fabricated, and it also experiences a longer time to market.

Alternatives to custom ASIC design

1. FPGAs (Field Programmable Gate Arrays)

• FPGAs offer lower levels of performance and higher consumption of power when compared to ASICs.
• The per-unit cost of an FPGA is significantly greater than that of ASICs.
• FPGAs are reprogrammable and can consolidate design changes, increasing their flexibility.
• FPGAs also have lower upfront costs and quicker time to market when compared to ASICs.

2. Off-the-shelf components

• The performance optimization level is lower than that of custom ASICs.
• They may not meet the specific needs as they are not custom or tailored.
• Off-the shelf components are extremely cost-effective and easy to implement.

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Why are they in demand?

The ‘ Internet of Things' future:

Custom ASIC design has become essential to IoT due to its ability to optimize performance , deliver tailored functionality, and offer design flexibility. It enhances device adaptability, improves cost-efficiency, supports scalability, and addresses unique IoT challenges—making it a critical asset in network optimization.

Our smart devices communicate with each other through the Internet of Things, providing greater value to customers. So, you not only need to be able to control your smart thermometer from a mobile device, but that thermometer also needs to directly tap into a weather API to make decisions on whether to heat (or cool) the house depending on external temperatures. It can also detect the external temperature of the house to alert the fire department in the event of a fire in the kitchen. These new functionalities require custom chips to remain effective in their core functionality while performing these other functions.

Power management: The customized and tailor-made nature of custom ASIC design enables the optimization of power management by efficiently minimizing power consumption, enhancing performance, and allowing smaller form factors. Traditional chips that powered computers and other devices, which users manually booted up and shut down, could run at full power because the user controlled when the device was on or off. The IoT devices mentioned above are effectively always on (to produce maximum value), so they need intelligent and customized chips that know when to power up and down depending on usage.

Size: ASIC chips are usually smaller than standard chips, which will always be an important factor as devices are ever decreasing in size (for portability's sake). The custom ASIC chip integrates multiple components onto a single chip, without the need for numerous separate components. They are in high demand due to their compact nature, which offers several advantages, including power efficiency and specialized functionality.

Data: Today’s devices are generating valuable data that can be studied and utilized to enhance their performance and provide us with more information about our health (wearables), energy usage (smart thermometers and refrigerators), quality of life (smartphones), and more. According to semiconductor manufacturer Intel, “half of the world’s data was generated in the past two years, and only 2% of that data has been analyzed.” The world is creating many different use cases for intelligent devices, all of which require small but powerful chips to power data intake and transmission to other devices. With the growing volume and variety of data, coupled with the advent of AI and networking, custom ASIC design has become an integral component in addressing the challenges of data-centric systems. Custom ASIC design increases the efficiency of AI applications, enables high-speed networking, and provides unique functionality and power efficiency.

The Crypto future: Intel has made waves recently in the bitcoin space, 2018. This innovation reduced the energy consumption of Bitcoin mining while increasing output. It requires incredible processing power and energy to mine Bitcoins, and Intel could easily become a major player in providing ASIC chips specifically designed for this purpose.

As bitcoin and other cryptocurrencies grow in importance, users will win and lose based on the power of their mining equipment. To successfully mine, they must make many calculations to embed transactions on the blockchain. Custom ASIC design enables high-speed mining and energy efficiency while ensuring network security and cost-effectiveness. ASIC chips are the driving force behind the long-term health and sustainability of the crypto future.

The automotive space: As we discussed in a previous blog, automotive companies are increasingly developing smart cars and electric vehicles, all of which require highly specialized chips to power new functionalities. The promise of self-driving cars requires incredibly powerful and intelligent ASICs to enable the array of sensors necessary to avoid humans, roadblocks, and other elements that the car's computer must sense to prevent collisions. Custom ASICs are a crucial component of the critical functions of cutting-edge technologies such as ADAs and EVs. Automotive ASICs are also designed to overcome harsh environmental conditions and ensure fail-safe mechanisms. The creation of customized chips becomes that much more critical when lives are on the line.

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UST’s customized approach

As ISG described in its recent paper highlighting UST as a leader in the hi-tech engineering industry, manufacturers increasingly need to create reusable framework structures. Our approach is a collaborative journey where we co-create with our clients, realizing a joint vision for their future. We utilize a custom framework that leverages our expertise, enabling most of the world’s top 35 semiconductor companies and our innovation ecosystem to deliver the best results for our clients.

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UST: a hi-tech engineering leader

ISG ranks companies into four buckets: Leader (comprehensive product and service offering and advanced market presence), Challenger (excellent service and technology stacks and a willingness to improve their market presence and competitive strengths), Market Challenger (burgeoning presence and established and well-known vendors in their chosen industries), and Contender (demonstrating evidence of investments in the field and goal of becoming a Product or Market Challenger within 12 to 18 months). ISG believes that UST is in a competitive position thanks to its comprehensive product and service offering and strong market presence.

The growing demand for ASICs among enterprises has created a significant opportunity for UST, according to ISG, as it is one of a few consultancies with a global footprint and end-to-end engineering capabilities. UST has strengthened its leadership position in the semiconductor space and is leading the path toward the digital chip revolution.

In addition to working on custom ASICs, ISG cited UST’s engineering and R&D service expertise in semiconductor R&D, outsourcing, ODCs, and derivative design as key differentiators.

Custom ASIC design provides performance, efficiency, and flexibility for applications in AI, 5G, IoT, and other fields. To explore how UST’s ASIC and FPGA design services can support your goals, visit UST Pre-silicon engineering.