What is NRE Cost?

May peace and blessings of the Almighty be upon you all..

One of the most important parameters in VLSI world is Non-Recurring Engineering cost. Every company want their NRE cost to be lower. What is it? Why it is very important?

In simple terms, NRE cost is the cost invested on a particular project that cannot be recovered back. 

To explain this, let us see a case where you are developing an ASIC for a company. You spend quite a good amount of money on manpower, design, fabrication etc. What will happen if the resulting product does not meet up to your client’s expectations? Money spent on them cannot be recovered and adding to that you need to design the product again with another NRE cost set. As you see, the money invested on this project is gone and you cannot recover it. 

This is why ASICs have high NRE costs associated with them. Since there is no fabrication involved with Programmable devices (PLDs / FPGAs), they preferably have less NRE cost spent on them due to reprogrammable ability. 

Thanks and lets meet in an another blog post (Insha Allah)

Your brother,
Aashiq Ahamed A


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