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. But 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.

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. But the industry is changing, and the types of chips companies want are also changing.

As we discussed in our previous blog, large technology companies have begun creating specialized chips so they can own more intellectual property, avoid supply chain delays, and drive deeper enhancements and customizations. Companies like Apple and Google (among other competitors) are building chips that feature 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 (ASIC) design (i.e., customized chips made for specific devices).

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 ASIC
• Other industries, such as automotive, are also driving interest

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 from $200 million to $300 million based 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 building their own chips.

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 and 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, due to several trends driving adoption.

WHY THEY’RE IN DEMAND

The Internet of Things' Future: Our smart devices ambiently communicate with each other through the Internet of Things to provide 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 also can sense the external temperature of the house to alert the fire department if there is a fire in the kitchen. These new functionalities require custom chips to remain effective in their core functionality while doing these other functions.

Power Management: Traditional chips that powered computers and other devices that users manually booted up and shut down could run at full power because the user controlled when the device was on or not. 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 get smaller and smaller (for portability's sake).

Data: Today’s devices are creating important data that can be studied and utilized to improve their performance and provide us with more information about our health (wearables), our energy usage (smart thermometers and refrigerators), our 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 need small but powerful chips to power data intake and its transmission to be collected by other devices.

The Crypto Future: Intel has made waves recently in the bitcoin space, on the heels of acquiring a patent for a bitcoin mining hardware accelerator in 2018 that 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 geared toward this space.

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.

The Automotive Space: As we discussed in a previous blog, automotive companies are increasingly building smart cars and electric vehicles, all of which require hyper-specialized chips to power new functionality. The promise of self-driving cars requires incredibly powerful and intelligent ASICs to enable the array of sensors required to avoid humans, roadblocks, and other elements that the car’s computer must sense to avoid. The creation of customized chips becomes that much more important when lives are on the line.

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 use a custom framework that taps into our expertise, helping most of the world’s top 35 semiconductor companies and our innovation ecosystem to produce the best results for our clients.

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 enterprise demand for ASICs has created a huge opportunity for UST, according to ISG, as it is one of a few consultancies with a global footprint and end-to-end engineering capabilities.

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

To learn more about what makes us different, read the ISG report here.