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I had read that the fabricate a custom IC is very expensive (>10000$) but why?

For example an 555 timer cost <1$.
If I design and 555 timer with an inverter at the output in some program (don't include that the license is also expensive) and then I want to fabricate that why will cost so much? What the 555 timer don't have but my IC have which makes the price >10000 times more expensive?

EDIT: I am asking the reason that the price is different between the two ICs!

Tom Carpenter
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ARISTOS
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    It's the other way around - what does your IC not have that the 555 has? **Quantity**. – Chris Stratton Nov 19 '17 at 08:43
  • Supply and demand... there's no demand. – Harry Svensson Nov 19 '17 at 08:47
  • @ChrisStratton: let's say that I will order 1 million ICs do the price per IC will be <1$ – ARISTOS Nov 19 '17 at 08:51
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    Related: https://electronics.stackexchange.com/questions/67598/how-are-integrated-circuits-fabricated – MarkU Nov 19 '17 at 08:59
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    @LorenzoDonati well, it **is** underresearched, as any research in how ICs are made would have shown that you need an expensive fab to produce a wafer based on a much more expensive mask – and masks and setup cost money. So, my downvote is "lack-of-research" based. – Marcus Müller Nov 19 '17 at 09:17
  • @MarcusMüller I researched it! My question was why 555 timers wafers isn't so expensive! – ARISTOS Nov 19 '17 at 09:21
  • @MarcusMüller Fair point, but I think it is not so clear cut. If you are a newbie, or an enthusiast youngster, it could be very difficult to understand the economics behind the description of IC fabrication you can find online. Until we split this site into a "professionals only" site and a "beginner site" (not advocating that, though), I'll give the benefit of the doubt and assume the OP is not a lazy postgraduate student, but an EE enthusiast (or a beginner student). – LorenzoDonati4Ukraine-OnStrike Nov 19 '17 at 09:23
  • @ARISTOS You already have your answer in the post I linked to. In short: the cost of a single wafer depends on how many you make and how much does it cost to setup the process (e.g., photolitographic masks). – LorenzoDonati4Ukraine-OnStrike Nov 19 '17 at 09:25
  • Older processes, such as 2-layer metal and just implants for Nch and Pch and isolation wells, produce silicon for 1 penny per square millimeter, or less. I worked at one chip company where the PROFITS, on one of the legacy products I monitored, paid for all the inhouse engineering and CAD salaries. Why were the profits so high? the silicon costs were very low, the necessary resolution was 0.5U or larger, yields were 100% in most cases (on most wafers), and the high intellectual property (design skills) needed to avoid the many ways the design and the layout could produce field failures. – analogsystemsrf Nov 19 '17 at 22:00

1 Answers1

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The simple story

Producing a batch of ICs involves one-time cost in the order of 1 million USD. So if you produce 10 millions chips, it only adds about $0.10 to each chip. If you produce 10,000 chips, it add $100 to each chip. The NE555 chip is so inexpensive because it is produced in huge quantities.

The detailed story

See the detailed answers to How much does it cost to have a custom ASIC made?

Codo
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