Will companies call a quits?
Once the difficulty gets high enough and say a 20GH/s chip (22nm or some shit) costs 30 cents a chip, but will only make 10 cents in its lifetime, no one will buy and it'll be a stand still because of the saturation of the mining network.
Thoughts?
Yes, at some point mining profitability will be below production cost of these asics. Although its more likely the electricity cost that determines this than the chip production cost. Miners with the cheapest electricity will be mining at most at a marginal profit and most asic vendors will close shop; difficulty with taper off, and D will be influenced solely by BTC price variance and perhaps mining fees if that becomes a real factor.
No one knows how long it will take to get there, several years most likely, but you can estimate at what network hashrate this will happen. By my math, somewhere between 80 and 800PH at the current BTC exchange rate and using 28nm asics:
https://bitcointalk.org/index.php?topic=295270.0I dont think we will see <28nm asics any time soon, if ever.