Sonics’ CEO talks about consolidation, what will change with the IoT, and how to be effective in the Chinese market.
Grant Pierce, president and CEO of Sonics, sat down with Semiconductor Engineering to talk about the effects of industry consolidation, China’s impact, and the unfolding security threat with the IoT. What follows are excerpts of that interview.
SE: Consolidation is one of the big stories right now. What does that mean for your company and the industry as a whole?
Pierce: It’s a very interesting time. It’s a consolidation of our customers. But it looks as if a lot of these companies are scaling up to be more competitive and more complete with products across multiple markets. So this is an opportunity to span more applications. That’s good.
SE: And these companies have never been involved in this space before, right?
Pierce: That’s correct. They’re trying to look at the problem as a system-level problem. Companies want to spec at a high level and plug and play these solutions together. That’s all good. The challenge is that it puts them in a situation where they have to re-do their architecture. That’s an opportunity for us to get in, but we also have to be able to support a customer who is transitioning from true system level and software down deeper into the hardware.
SE: To some extent this is re-aggregation of the industry. Does it make sense?
Pierce: One model doesn’t fit the whole market. China is in the position where they’re trying to assemble the supply chain for their SoC market, and in that process they are aggregating. But the reason they’re aggregating is very different from the reasons that other companies are aggregating. Some of the recent acquisitions of big companies are partly defensive. With China, it’s an opportunity for them to aggregate suppliers for their market, but in this process they are trying to get a footprint outside the Chinese market. They’re interested in acquiring publicly traded companies in the United States with strong roots in Asia. That helps their domestic market and gives them access to a foreign market. They’re also trying to buy IP. There are benefits that will accrue to companies with unique IP positions. At the same time, these are mega deals. In the case of China, they’re moving billions of dollars of investment. They’re going to go after deals that are close to $1 billion all the way up to multi-billions.
SE: How does that affect Sonics?
Pierce: It requires that we have a unique strategy for each of these geographies.
SE: How about the geographic mix of your customer base? Has it changed?
Pierce: We’ve always been strongest in the United States. Our second level of concentration is in Japan. The United States has been pretty steady. Japan has aggregated and re-aggregated. And then Korea has remained pretty steady. But China is still the place for big growth. It requires developing our abilities to support new channels. We’re looking at all our options there. The status quo is the only unacceptable one.
SE: What impact will the IoT have on you?
Pierce: The market is huge, no matter whose report you use. We believe it represents is a shift away from a standard product play. Though there are some very large aggregated volumes, we think it’s going to be served up by a bunch of smaller-volume, rapidly moving underlying product designs. In those products, we’ll end up with large companies coming into a market where it’s completely uncertain what the architecture is for the underlying system. They’re going to need a true agility for hardware design and software design in order to jump into a market, test it, refine the product, go back in and keep churning on that product as it goes forward.
SE: That also makes the market rather unstable, too, doesn’t it?
Pierce: Yes. I was talking to a company in China about their entry into the tablet market. They have a good SoC and a good architecture. They enjoyed a lot of business around where the tablets are being made, but they saw the effect of another big company coming into the market and subsidizing the chip sales. As soon as that happened, they were priced out of the market. That’s a Chinese company being priced out of the market.
SE: How exactly do you play in the IoT world?
Pierce: What you really need is a way of defining the architecture above the sum of the individual functions. Our front architecture is built to support hardware-software co-design. And we have all of the agility built into the design methods around our technology to give the right analysis for performance, the ability to verify the design functionally, as well as all the manufacturing-related verification. We’ve done a significant amount of work on how we fit into the design flow. So we’re going to have a lot of players coming in who want to relate to the chip the same way they relate the hardware at the system level. We have to get through that process rapidly. They’re all going to be addressing markets that move fast. This even applies on the industrial side. The industrial IoT is interesting, but it’s going to need consistency and a platform. What really starts to come out with IoT is the need for a different set of functions that need to be ubiquitous, but up to now they have been far more isolated in how they come to market. So the first one I can think of is that we’re going to have power sensitivity across the market. IoT is going to focus more and more on battery power. Power is a big deal. IoT is going to need power control everywhere.
SE: How about security?
Pierce: It’s not just security as we might think of it from outside a system. You also need security within a system from where the attack is going to take place.
SE: That’s definitely missing. Every piece needs to be secure.
Pierce: Yes, you need to make everything secure everywhere, not a way to add security everywhere. The network may be secure. The nodes that tie into the Internet have to be controlled. And each individual packet, as it moves from processor to memory on a device, has to be secure with each other because the attack is going to take place at the point where the information is being gathered, which is likely very close to the sensor. Plus, it’s likely we’ll have multiple processors on the die. The attack will take place by trying to co-opt one or more of those processors and steal the information right there.
SE: How does this work with ARM’s TrustZone approach?
Pierce: That’s a memory area in the device that’s trusted to be accessed under certain conditions by trusted elements in the design. That’s different from the individual transactions that move data across the chip, between processors and memory locations and I/Os. We provide on-chip firewalls that assure the security of a particular device or processor, which may be allowed under certain conditions to have access to this memory. As a result, if a processor introduces a request for a memory location that is not allowed for that transaction, then it’s rejected. It’s guaranteed in hardware and is not programmable through the ports associated with the transactions on the device. This is a great way of extending roots of trust to the actual transactions on the chip.
SE: With enough resources anything can be hacked or broken, though.
Pierce: Yes, and then the question is what do you do when it’s broken. One possibility is to deal with it as an exception, which is made visible in the system. The system can then analyze it and decide the source of this exception. Is it a rogue transaction? You also have the ability to monitor when your firewall scenario was last reset. What were the conditions under which it was reset? And if it was reset, what was its source? And then you can analyze it to determine what you can do to prevent it and reset the chip and eliminate it.
SE: Does this become a new driver for your business?
Pierce: Yes. We’ve dealt with many different applications and market requirements, so as the overlap increases between devices that are more secure than others and there is a need for more security everywhere, we’ve already been there.
SE: Such as cars?
Pierce: Yes, but we’re not about defining the security. We’re about enforcing it. Several companies are being purchased by larger companies with assets in this field. We have an asset in the RTL, as well as a patent position in on-chip firewalls. The explosion in this market will happen when people start thinking about the problem for end-to-end requirements. The idea that you have a radio interface to your pacemaker because it allows a doctor to get information about your heartbeat is very useful, but you don’t want to broadcast that information out and you don’t want someone to have the ability to reset it.