Two years ago, Shanghai-based Espressif Systems was a struggling Chinese fabless semiconductor company best known for designing chips for other clients. Its first two attempts to develop and sell its own products – Android tablet wireless networking chips – ended up as commercial failures.
Espressif’s fortunes improved significantly however, after the August, 2014 launch of its ESP8266 system-on-a-chip (SOC). Since then, the company has sold millions of these low-cost wi-fi networking chips, while attracting a devoted following among hobbyists and hackers. Adafruit, Arduino.org, SparkFun Electronics and other third-party suppliers have introduced dozens of ESP8266 circuit-board modules and development kits. Meantime, Espressif’s workforce has expanded from 20 to about 100, and it's engineers are putting the finishing touches on another, more powerful, wireless SOC – the ESP32 – to be launched in August.
Espressif’s popular ESP8266 chips add inexpensive Wi-Fi connections to a wide variety of products. Source: Espressif Systems
The ESP8266 is essentially a low-power microcontroller that allows users to add 802.11B, G and N wi-fi Internet connections to a wide array of electronic devices – from coffee makers and lamps to home thermostats. It combines a 32-bit Tensilica processor with antenna switches, power amplifier and other components onto a thumbnail-size chip, which has won praise for its performance and easy programming.
But what really caught users’ attention was the chip’s price-- as low as $1 each in moderate quantities. That has allowed circuit board makers to build and sell ready-to-use ESP8266-based wi-fi modules for as little as $5 – far less than the $10, $20 and even higher prices of modules from competitors such as Broadcom, Particle, Qualcomm and Texas Instruments.
“Nothing else comes even close to this pricing,” said Christian Kim, IHS Technology’s senior analyst for Internet of Things (IoT), connectivity and telecom electronics. “The $1 price point is really attractive for people to try a lot of different things,” he says, adding that low-cost Wi-Fi could turn out to be “the greatest thing that’s happened to the Internet of Things.”
Open-source supporters
Espressive Systems at a Glance
Company: Espressif Systems (Shanghai) Pte. Ltd.
Headquarters: Shanghai, China
Founded: 2008
CEO: Teo Swee Ann
URL: https://www.espressif.com/
Employees: 100+
Business: Develops low-power wi-fi and Bluetooth chips and wireless solutions for the Internet of Things (IoT).
Espressif owes much of the ESP8266’s success to the support of open-source technology enthusiasts, who quickly discovered the low-cost chips and started developing and sharing tools to put them to use.
Within weeks of the chips’ launch, volunteers pitched in to translate the company’s Chinese-only documentation and datasheets into English, and organized the www.esp8266.com community forum to exchange user suggestions and advice. Soon, hackers managed to adapt the popular Arduino integrated development environment (IDE) for the ESP8266, making it much simpler to create new applications.
David Goins, a former NASA chip designer whose Holiday, Fla., Windfreak Technologies develops and sells open-source radio-frequency products, just bought his first ESP8266 chip to experiment with. He was attracted largely by the chip’s easy-to-program Arduino compatibility.
“The ESP8266 has gotten quite a big following in the Arduino world,” Goins said. “It doesn’t take an EE degree anymore to do this stuff. Really, a teenage kid that’s a bit nerdy could do it.”
Measuring success
Privately held Espressif does not release sales figures for its chips, but one measure of their popularity can be seen on YouTube, where a search for “ESP8266” returns about 70,000 results, with links to hundreds of “how-to” instructional videos-- including several with more than 300,000 views.
ESPert, a Singapore-based maker of ESP8266 circuit board modules, published an infographic last year claiming that Espressif sold more than 20 million ESP8266 chips in 2014, and was expected to sell more than 50 million in 2015. Espressif declined to comment on ESPert’s data.
Even if those sales totals are correct, Espressif’s shipments would account for only a tiny fraction of the worldwide wireless networking chip market, which IHS Research estimates was worth $7.7 billion in 2015. Even if only wi-fi enabled IoT devices are considered, and Espressif sold 50 million chips to just that market, its shipments would have been less than 2 percent of the 3.04 billion IoT wi-fi chips that IHS says were shipped in 2015.
Few commercial products
Thus far, few commercial products have been identified as using Espressif’s chips, although Wal-Mart and Home Depot offer ESP8266-based power outlets that let users remotely switch lights or other products on or off using PCs or smartphones.
Teo Swee Ann, Espressif’s 40-year-old CEO and founder, said that many of his company’s chips are sold to Chinese commercial product makers, although “it’s a very fragmented market” and buyers often don’t reveal what their end products are.
Starting in August, Espressif’s new ESP32 chips will offer both Wi-Fi and Bluetooth connections. Source: Espressif Systems
Teo, a Singaporean engineer who worked for Transilica, Marvell Semiconductor and for China’s Montage Technology before starting Espressif in 2008, admits that after several “really tough” early years, the ESP8266 “grew beyond our expectations.” But he won’t be surprised if the company’s next-generation ESP32 chip is even more successful.
Besides faster wi-fi, he said it will offer two varieties of Bluetooth, dual processors, more memory and hundreds of other improvements.
“I really love this chip,” he said. “It’s a much better chip than the 8266.”
