Four semiconductor CEOs took to a stage in the middle of the show floor on the opening day of this year's Electronica exhibition and proceeded to try and drum up enthusiasm for the Internet of Things – as if the topic needed it.
The traditional semiconductor CEO roundtable discussion held every two years at Electronica focused this time on a discussion around the IoT topic but it was a somewhat pale and choreographed event with only time for three questions from the audience.
The four CEOs – Carlo Bozotti, CEO of STMicroelectronics; Rick Clemmer, CEO of NXP Semiconductors; Gregg Lowe, CEO of Freescale Semiconductors and Reinhard Ploss, CEO of Infineon Technologies – were given plenty of opportunities to say what a great opportunity the development represented and how this was something that played to their companies' and European strengths.
However, some differences were teased out as the conversation progressed. While all four CEOs agreed that security was likely to be an essential ingredient in persuading users to entrust their personal data to IoT systems, it was Infineon's Ploss who said that there is a definite opportunity for hardware companies, and particularly semiconductor companies to define security standards.
"I think we need an orchestrated approach to [IoT] security," he said. In response to the question from moderator Killian Reichert as to whether the advent of IoT represents another industrial revolution, Ploss said: "Look at the use cases; autonomous driving, industry 4.0, the home, support of elderly people. It requires microcontrollers, charging, sensors. It is not one thing but many, but across it all, the number one requirement is security. There is an opportunity to supplement the Internet with safe channel. In Europe we are not in a bad position to build out from our strength in security, industry and automotive."
If the other CEOs heard the call to band together with Infineon, they chose not to shoot from the hip and respond in such a public forum. It is not the first time that the Infineon CEO has sought to mobilize European chip companies to work together (see Infineon CEO Calls for Pan-European Cooperation)
ST's Bozotti acknowledged that his company has just completed a painful exit from the digital sector of the smartphone space – the winding down of the ST-Ericsson joint venture – but said that nonetheless IoT divides into two sectors, of which the first is focused on the smartphone and satellite equipment that connects to the smartphone.
It includes smartwatches, smart bracelets, smart glasses and is a market today, said Bozotti. Although ST is no longer offering the digital SoC or application processor at the core of the smartphone, there are still high volumes for analog chips, microcontrollers and sensors, he said. The second block is everything else; from smart cities to smart cars and on to smart homes, which may comprise many markets but which are yet to take off.
Freescale's Gregg Lowe made the point that while enthusiasm for various IoT applications may vary over time often deployment will come in different ways to the popular view. He discussed the example of autonomous driving assistance systems (ADAS). "ADAS is not about sitting in the back seat and saying 'Take me to Electronica" but it is about a car that is aware of its surroundings; and that can't get in to an accident." Lowe went on to predict that could be a reality within 10 years.
Better than seasonal Q4
In response to a question from the floor about the general market conditions NXP's Rick Clemmer said that the general mood amongst NXPs' customers was that the fourth quarter would be better than the usual sequential quarterly downturn and that the forecast for 2015 was for moderate growth of about mid-single digit percentage. Bozotti, who has only just pulled ST back into profit after disentangling his company from its ST-Ericsson joint venture, was more bearish. "We see market growth, at least for the markets we serve, of about 4 to 5 percent for the next few years."
Taking a longer-term view, Freescale's Lowe was more bullish saying that the Internet of Things as a defining wave of development on a par with the personal computer and the mobile phone and that this made him optimistic about market growth.
A second question from the floor about the European Commission's Airbus of Chips initiative gave the CEOs the chance to more or less proclaim any project that focused on European chip manufacturing was dead. Three of the four CEOs have served in an Electronic Leaders Group that was charged with drawing up a plan to strengthen chip manufacturing in Europe.
NXP's Clemmer said that the semiconductor business is a global industry and that the location of IC manufacturing is not necessarily critical to success. Ploss repeated the line he took earlier this year (see Infineon Rejects Europe's Chip Manufacturing Plan) saying that IC manufacturing alone is not significant but that it is necessary to take a system-level view and create intellectual property and capture value at the top of the design process. After that the choice of where to manufacture ICs, boards and systems should be made on competitive economic grounds.
Ploss made it clear that work with the European Commission to invigorate the semiconductor sector continues but that "to cut it down to manufacturing only is short-sighted."
ST's Bozotti agreed with his two peers pointing out that currency differences in an industry where pricing is effectively done in US dollars has made paying for manufacturing in euros difficult for many years.
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