Contributed by Dick James and Jim Morrison
Every year before the press day, and two days before the actual show itself, International CES holds their “CES Unveiled” event for media and analysts. It’s basically a mini-trade show that (presumably) the exhibitors have to pay extra, to get increased exposure for their products.
It’s always a surprise to me to see how many of us there are covering the show, and there must have been at least 1500 – 2000 swarming through a relatively small set of merged conference rooms. And therein lies the problem – too many people in a small space, a lot of them with media-size cameras on tripods – a bit like being on a crowded bus at a back-packers’ convention. So it was difficult to get a look at a lot of the booths when the crowd was three deep, although there were definitely trends that will likely be continued in the main show. Add to that the fact that most exhibitors failed the five-second test (if you don’t know what they are selling after looking at the display for five seconds, move on), and there was not any specific product that grabbed me by the throat and demanded attention.
Buzz-words of the year?
“Wearables” and “IoT” are definitely the buzz-words of the year for the chip industry, and CES, and there were quite few examples at the Unveiled event. I must admit some of them were singularly underwhelming for me, but then I’m an old f**t who doesn’t have an overwhelming urge to share everything I think and do.
Having said that, there were an increasing number of fitness and medical-related products that I could see a market for – everything from the latest FitBit and Withings products to sleep monitors and diabetic sensors. And, being a dog owner, pet tracking tags caught my eye too. One of the objects I couldn’t get close to was a smart bicycle pedal by Connected Cycle, I’m still trying to work out the need for that one; I guess if you’re a keen cyclist you could get some performance metrics out of it, and I gather it’s GPS-equipped, so you can use it to track your bike if it is stolen.
Which points up a feature of a lot of these products – they are essentially aimed at niche markets, but thanks to the massive growth of smartphone ownership, each of these markets by themselves is now large enough to make product development worthwhile.
The fitness toys are one thing, but the medical devices are another; they are all at the consumer end of the scale, I didn’t see a single one that had FDA or some governmental certification. So they may be useful in the sense that you can get a blood pressure reading or whatever, but we won’t see them in hospital use for a while.
Older process technology
From our point of view, interested in the chips inside these things, they have a lot of commonality despite the differing applications. They all use a variety of sensors, coupled with power management and a low-power processor, and some wifi or Bluetooth and associated RF components, none of which will be leading edge silicon.
The reason we’re seeing this flood of devices is the relatively recent availability of cheap small sensors, moderately priced support chips, and the software to interpret the data. Innovation will come as the separate chips get integrated onto fewer pieces of silicon, which presumably will push the costs down.
The use of older process technologies is one reason why we see many of the older 200-mm fabs still shipping silicon, and why foundry management is emphasising them – they are fully depreciated so costs are lower, and the market is expected to take off, at least if we believe all this IoT hype.
Five clear themes emerging from press events held Monday at CES 2015, but the overarching theme for the semi industry is more semiconductor device shipments into applications that have the potential to grow the semi industry as did the smart phone.
1. The Smartphone market still growing. It is estimated 2 billion units a year will ship from 2015 to 2018. Most of the demand is from emerging regions of the world. China is leading that figure.
2. Wearables making a lot of noise, but analysts are talking about abandonment rates of wearables in the 3 to 6 month range. Which leaves the future of things like Nike Fuel band, FitBit and others in question. Will it ever take off where annual volumes and revenue are measured in $B? Time will tell.
3. Medical wearables and connected medical is another topic. Today, companies like Honeywell, Freescale and Qualcomm revealed their roadmaps and investment strategy
4. Intelligent, safe and connected automobiles. Volkswagen, Mercedes, Toyota and Bosch to name a few unveiled the future of smart safe cars for our future.
5. The connected, intelligent home. Bosch and Qualcomm spoke enthusiastically about their offerings to make our homes more efficient and connected.
So what does this all mean to the semi industry?
- All five of these applications mean more semiconductor devices will be shipped every year and obviously this is very good for the semiconductor industry. Most of the devices required to meet the demands in the big five applications are devices that were designed years ago and are currently being fabricated on older process lines. These new and incremental semiconductor shipments will generate revenue that has much lower design and manufacturing costs.
- The semiconductor solutions required for our connected world can be served first by discrete chip sets that already exist and at lower costs to the OEMs making the end user solution more affordable, which will further allow for greater penetration into the global consumer market.
- As these markets grow in volumes, competition will intensify for these sockets and that competition will spur innovation. This innovation will most likely manifest itself as single chip solutions or SoC’s where multiple functions are integrated into a single chip providing the OEM with a reduction in components for the bill of materials and a reduction of space required to implement the solution.
- The innovation also opens up the door for the fabless companies of the world to study the discrete solutions and design new SoC solutions for these emerging markets and possibly offer more cost effective solutions than the IEDM’s as their overheads are lower and they can leverage strong relationships with foundries not otherwise occupied with advanced sub 28 nm chip-sets for smartphones.
So far CES2015 has nothing but good news for the semi industry. As the week goes on and we learn more about what is new for consumers, we will keep you up to date.
On that note... Viva Las Vegas.