So your 12.5mm wafer can have a 8.8 x 8.8 mm square inside of it, or 78.125 mm^2. If I did the math right that is on the order of 156M transistors given a 4t ram cell that is about 39 million bits of RAM. So basically a pretty useful amount of space for "jelly bean" type applications. A synchronized fab line with a median processing time of 1 minute can produce 60 dice per hour. Assuming a physical plant cost of $8M US (that is "several million Euros + the office space to hold it) and a depreciation cycle of 12 years that is about $500 / day for the machinery we can add another $500 / day for staff + electricity, figuring 8 hour days, that's $125/hour to operate for 60 chips is a bit more than $2/dice.
Well the pencil math works (with all of those assumptions) but even assuming its off by an order of magnitude, $20/dice isn't a deal breaker for your own custom chip that does your special thing. You'll also notice that the 50 weeks a year 40 hours a week assumption. I'm guessing you can get better utilization than that which would offset your depreciation costs.