By custom chips I mean Full Custom ASICs, that is what they are claiming they are making. That costs about 10M USD for starters.
There might be some way to get it cheaper if you have the ties but unless whoever behind BFL is some engineering wizard he doesn't even have the means to develop it.
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Could you please provide some sort of evidence that backs this statement? I'm not saying you're wrong, I have no idea what these kinds of chips cost, I'm just interested in some evidence.
What would comprise the 10M figure? How much of it would be development, and how much would be payment to the fab? It looks to me like they are developing the hardware design themselves. My knowledge of this process says it's a task of creating some HDL-code, and then having this code transformed into a chip by a fab. I've also heard that you can't write generic HDL code, ie. code that fits all production processes. So they have to decide on which process to use before writing their code.
My point is this: if 90% of the production costs are related to writing the HDL-code, then it might be feasible if they are able to write the code themselves, and only need to shell out the money for the actual production.
The equivalent situation in the world of software would be a claim that says that "it costs $100,000 to develop a professional website". That may be true if you hire a web design company, who write the entire thing from the ground up, but if you're able to write the code yourself, the costs mostly comprise hosting, and not much more.
In short: please educate me about hardware design
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