An FPGA conversion consists of implementing an FPGA based design in an ASIC. There can be multiple reasons for doing this, such as reliability, power dissipation, or obsolescence. But the main reason is cost. ASICs will typically cost much less than an FPGA.
ASICs also have a NRE associated with them. So to realize any cost savings, the ASIC volume must be high enough so that the cumulative unit cost savings exceeds the NRE charges.
There is a time value of money. In order to justify an FPGA conversion, the volume should be high enough so that the breakeven point occurs within 6 to 9 months. Here is an example. Assume that the FPGA costs $40 each, and the ASIC costs $5 each. That is a savings of $35 per part. A typical FPGA to ASIC NRE will be on the order of $49,000. That puts the breakeven point at 1400 units. The conversion is economically justified with a 2,000 unit annual volume. The breakeven volume changes with the technology used in the ASIC, the cost of the FPGA, and the package type.
The breakeven point has also changed with time. Back in the mid-90s, the breakeven point was frequently below 1000 units. At the time, there were a number of companies providing FPGA conversion services. Companies such as AMIS, Chip Express, and Orbit Semiconductor. Many of the Japanese companies also offered the service, including NEC, Toshiba, KLSI, and Fujitsu. The FPGA companies successfully fought back by a combination of using more advanced technology nodes, and including large amounts of RAM. The presence of the RAM prevented the ASIC companies from offering the same circuit while using an older technology. The increased use of lower supply voltages also worked against the ASIC companies, since their older technologies did not operate as well when using reduced supplies. By 2005, the FPGA conversion business was gone, along with most of the ASIC suppliers.
Semiconductors are a highly dynamic business, and by 2012, the economics of FPGA conversion had changed again. The mask costs have dropped, and those fabs that allow Multi-Level Masks (MLMs) have seen the mask cost drop by another 75%. The power supplies have stabilized between 1 and 1.2 volts. And while the FPGA technologies can provide more RAM, many applications do not need the extra RAM. As a result, FPGA conversion breakeven points have dropped to the point where conversions are again economical at the 1000 to 2000 unit range.