What’s the fewest components you need to have a functional Arduino? Wolf Paulus gets it down to just an Atmega168 chip, power connector and LED for good measure. He describes, “This is probably the most minimal ATmega168-20PU based Arduino you can come up with. The ATmega168 (available for about $3) was the default Arduino chip for quite some time, before being replaced by the ATmega328, doubling the available memory. The chip is powered with +5V on Pin-7 and grounded via Pin-8; the LED is between Pins 19 and 22.” He suggests a minimalist Arduino could be useful when integrated with a Raspberry Pi to enhance the the R-Pi’s analog input capabilities.
This variation is minimal in both hardware and firmware as the chip functions without a bootloader. This requires the addition of a new hardware definition in your Arduino IDE, and programming via an Atmel or similar programmer instead of over serial.
You can find all the details and code on Wolf Paulus’ website.