When comparing an ASIC vs a discrete solution, the initial development cost is often a key concern. Discrete solutions—off-the-shelf components assembled on a circuit board—may seem faster and cheaper to get started with. However, those investments are quickly outweighed by the long-term benefits of a custom ASIC, especially when looking at unit cost, reliability, supply chain simplicity, and long-term maintenance.

In complex systems, simplification is key—and combining all functionality in a single chip is the ultimate approach. Whether through monolithic integration (a single die) or System-in-Package (SiP) designs (multiple dies in a single package), ASICs drastically reduce the complexity of managing varied components. Instead of supporting multiple parts from various vendors, there is only one item to maintain in the bill of materials. This leads to fewer errors, simpler inventory management, and often significant cost savings across a product’s lifecycle.

ASIC Cost Benefits

Today, it's entirely feasible to bring a custom ASIC to market with an initial investment of less than $5 million. More importantly, the per-unit cost of an ASIC is often dramatically lower than that of a discrete solution, enabling rapid return on investment. Payback periods are often measured in months—not years—and after that, the cost savings go straight to your bottom line.

Take this example (figure 1): A discrete solution with negligible NRE (non-recurring engineering) costs might result in a $10 unit cost at a volume of 500,000 units per year. By contrast, an ASIC with a $4 million upfront cost and a $4 unit cost would save $6 per unit—totaling $3 million in savings annually.
In this scenario, the initial investment is paid back in just 18 months. From there, every unit sold improves the bottom line.

Obsolescence and Long-Term Reliability

One of the most overlooked advantages of an ASIC is obsolescence management. With discrete components, you're at the mercy of component suppliers—when they discontinue or revise a part, your entire design may need to be revalidated or redesigned. This can cause delays, increase costs, and even jeopardize product availability. In contrast, with a custom ASIC, you own the design and can manage the manufacturing lifecycle. Even if production needs to be transferred to another fab or packaging provider, the full IP and process control is retained. This ensures long-term availability, reduced requalification efforts, and peace of mind—particularly critical in regulated markets like medical devices, aerospace, and industrial applications.

ASIC Manufacturing Capacity: Leverage Legacy Fabs

Historically, the semiconductor industry focused its manufacturing on cutting-edge technology nodes for high-performance microprocessors. Each new node required new, expensive production lines—while older “legacy” fabs were left underutilized.

Product designers began leveraging these legacy nodes to create targeted circuits that didn't require the most advanced geometries. The result? High-performance, application-specific designs manufactured at a fraction of the cost of state-of-the-art silicon.

This opened the door for cost-efficient custom ASICs—not just for automotive giants, but for smaller players seeking performance, integration, and reliability in IoT, wearables, medical devices, and more.

Custom ASICs for Medical, IoT, Smart Devices, and Beyond

What started with automotive OEMs is now mainstream across industries. Today, custom ASICs are designed in unit volumes as low as a few tens of thousands for applications including:

• Medical wearables and diagnostics
• Internet of Things (IoT) sensors and smart devices
• Smart logistics and tracking (e.g. cold chain monitoring)
• Intelligent transportation systems
• Surveillance, access control, and smart buildings

This shift, powered by legacy manufacturing capacity and maturing design flows, makes custom silicon accessible, affordable, and extremely attractive for companies focused on differentiation and long-term sustainability.

Explore Our ASIC Design Expertise

Whether you're looking to reduce unit cost, control your supply chain, manage obsolescence, or bring differentiated features to your next product—a custom ASIC might be your most strategic move. At Presto Engineering, we guide customers from feasibility through to production and lifecycle support, leveraging decades of experience in medical, industrial, and high-reliability markets.

➡️ Discover our ASIC Design Solutions and see how we help you turn your idea into silicon.