This method could be very price competitive.
Take BFL. 8 chips per board, and those chips are a few $$s each to produce, but the development costs have to be spread over the units only BFL sells.
Avalong uses ALOT of slightly less expensive chips, but their cost to produce all those chips and boards etc would likely actually cost them more than BFL. Not to mention their volumes will be smaller- they just aren't set up for really high volumes of assembly it seems, and the power consumption will cost them sales.
For these new chips they will cost more than BFL's-say 5 times more for the integrator once you have paid costs and share of dev. But *if* you only need 2 of them for the same performance you have a small on cost to the integrator compared to BFL-but BFL still have to pay their development costs.
Look at the cost of a motherboard. Most good boards cost $200-$300AUD, and the fancier ones cost up to $500. Now consider all the bridge chips, controllers, LAN chips, audio chips, capacitors etc etc, there is a lot that goes on them. Since there are so many board models the only thing really made in huge volumes are the chips themselves which are used by many different vendors, the cost to develop each board is spread over smaller numbers.
Could this result in a $500 low power high hash ASIC? Possibly if enough integrators come along and compete with each other. It may not be possible for BFL to compete at that price, and I'd say Avalon will be done by the time those prices come around.
Could BFL become the 2nd 28Nm ASIC chip supplier so we get an Intel/AMD battle? Intel still makes their own boards as well. If BFL goes this path for their 2nd gen ASIC then mining really will stay affordable.
Still looking forward to Q3/Q4 to see these new ASIC integrators show their stuff. I can wait til then to part with my $$.
I wonder whether BFL even considered this possibility in their risk management assessments. This might not even be the only company which has developed chips which are near ready for release to the B2B market. For all we know, there's another company out there we haven't yet heard of which has end user units almost ready for release, too.
This could force BFL to go to a smaller process sooner than they'd originally planned, or to drop the prices of their current units earlier than they'd hoped. It's definitely going to be interesting as more and more players enter the ASIC market.