New Market Expectations For 2015

While everyone expects IoT to continue growing, many are also looking in other directions for new opportunities in 2015.

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This year more than 26 people provided predictions for 2015. Most of these came from the EDA industry, so the results may be rather biased. However, ecosystems are coming closer together in many parts of the semiconductor food chain, meaning that the EDA companies often can see what is happening in dependent industries and in the system design houses. Thus their predictions may have already resulted in their investment in tool development.

The predictions are segregated into four areas: Markets, Design, Semiconductors, and Tools and Flows. In this segment predictions related to markets are explored.

There is a general buzz of excitement about 2015 as stated by Lauro Rizzatti, a verification consultant. He says “the buzz about the Internet of Things (IoT), automobile electronics and wearables will continue into 2015 and keep the semiconductor industry buoyed with optimism. In the New Year, we’ll see more creative thinking about new chip applications.” That last sentiment is one that is overdue for a change. The industry has taken the easy road for some time, and there is an opportunity for many new products, ideas and innovations.

Internet of Things
It seems as if the IoT means different things to different people, and so far there are few good definitions that can be applied to the industry. Taqi Mohiuddin, senior director of marketing for Evans Analytical Group, defines it as “connecting everything and everyone and pushing the limits to smaller devices, with lower power and lower cost.” For most people, the IoT implies edge devices, although there are other components, such as hubs, networking, and the cloud, which are necessary to make complete applications.

Aveek Sarkar, vice president of product engineering and support at Ansys, adds to the definition, “small devices with sensors, some processing and an antenna that will drive new applications.

So how big are the numbers for everything and everyone? Marco Casale-Rossi, product marketing manager within the Design Group of Synopsys, paints a picture for us. “Once upon a time there were computers — millions of them — followed by phones — billions of them. Today, there are an estimated 1.5 trillion ‘things’ out there. Most of these ‘things’ are connectable and eventually will be connected. Smartphones are getting smarter and smarter, and are morphing into IoT as they become the hub for many applications. In fact, IoT has quietly taken off already, as the number of connected devices exceeded that of human beings on planet Earth sometime between 2008 and 2009, and will reach 25 billion in 2015.”

That’s a very attractive number for marketers.

“The Internet of Things keeps marketing happy,” exclaims David Kelf, vice president of marketing for OneSpin Solutions. “One prediction I have for the coming year is that the IoT nomenclature will start to die out with the actual names of the various applications taking over!” We have seen this happen before with Formal Verification where they stop being called formal when they perform functions such as equivalence checking, or Clock Domain Crossing.

Ken Karnofsky, senior strategist for signal processing applications at The Mathworks is more cautious saying “before the IoT really takes off, there needs to be better standardization, especially for wireless device connectivity. That isn’t happening in 2015. There will continue to be an investment in IoT but it won’t be as pervasive until the standards are better established.”

Another constraint to the IoT is expressed by Paul Pickle, president and chief operating officer for Microsemi. “In the IoT market, security is an increasing concern for remote, increasingly compact and power-conscious advanced systems that offer an ideal gateway for malevolent hackers.”

It is easy to forget that while consumer devices in this area get most of the attention, it is not the largest IoT market. Ron Lowman, strategic marketing manager for IoT within Synopsys, reminds us about the larger market: “The second camp is the connecting of industrial applications (IIoT) that have traditionally long life expectations, up to 20+ years is some cases, and much higher reliability requirements than the consumer market. For these applications to move into the ‘connected world’ there are barriers that increase the development time such as, average cost of the final product, the expected life of the product once it is commissioned into the field, and the reliability of the product compared to consumer applications. Returning an entire building security system is not the same issue as a phone, TV, or cable box.”

As noted in the design segment of the predictions, these IoT devices are significant to the EDA industry. “The focus on IoT will be a primary driver in the evolution of the semiconductor industry in 2015,” notes Rich Goldman, vice president of corporate marketing for Synopsys. “These types of devices don’t require leading-edge processing capability, but they do offer unique challenges in Power-Aware Design, cost and extreme integration of sensors, RF, processing, memory, MEMS, etc.”

Mike Gianfagna, vice president of marketing at eSilicon agrees saying “IoT will create new silicon business in 2015. Some of the winners will be familiar names, but some will be new entrants.”

New entrants are likely given that design skills may change. Sarkar sees that “design teams that can combine electronic design skills with industrial design expertise and keep an eye on cost reduction and fast time to market will benefit most. The extent of low power focus will determine success or failure in this market.”

Wearables
As positive as most people are about IoT, the opposite is true for wearables. “Wearables have some interesting applications like health monitoring, but don’t yet have the killer application to really take off in mass market,” says Mohiuddin.

This sentiment is echoed by Karnofsky: “Within wearables, health and fitness will drive the end use for those devices for the near term. How fast it grows depends on whether a killer app emerges to drive this wave.”

Casale-Rossi is not ready to give up on the segment, though. “The jury is still out whether or not wearable applications are a must-have or just another nice-to-have, with the exception of health care, where technology brings medicine to a higher level such as in artificial cochlea, pancreas and retina, implantable/injectable bio-sensors and actuators.”

Swinging toward the more positive, Lowman believes that “2015 will bring a lot of new wearables. This will start with the watch and the market’s drive to catch Apple or improve on the Samsung offerings. With the introduction of the watch we will also likely see other applications and different types of wearables to differentiate from the market leaders and find specific niches. The major improvement will be around power consumption because IoT will move away from reusing mobile and automotive solutions.”

Cost is always an issue. “China is making a big move into manufacturing for wearables, which should help keep the cost of these devices down, though their small size is pushing more robotic and clean-room assembly, which may partially offset Chinese cost advantages,” said Bernard Murphy, chief technology officer at Atrenta. “In the same vein, expect also to see increased availability of digital tattoos and transdermal patches for health monitoring. These new form factors should also drive innovations in packaging.”

Big Data and Infrastructure
At the other end of the spectrum, those IoT edge devices are creating huge amounts of data that could be mined. “The data from sensors needs to be transported and processed,” Mohiuddin says. “This is pushing the envelope on large processing devices, requiring more power, and more capability.”

Karnofsky cites one usage of this data “For auto manufacturers, the proliferation of sensors and connectivity is generating mountains of data that can be mined for information about reliability, safety, and more. This will drive the need for more sophisticated fleet data analytics applications to turn this data into useful information.”

And lest we think that low power is confined to battery-operated devices, Murphy sees that “the cloud will continue to push low-power architectures in servers and in connectivity. Both are interesting because the low-power techniques that evolved for mobile devices do not seem as directly applicable in these architectures and may, perhaps, drive new approaches to design for power. They will certainly push power-awareness more actively in OSes and hypervisors, and that may drive more active subsystem power monitoring and metering in chip architectures in support of these software-level controls.”

As with other segments, security is pervasive and the weakest link will bring the entire system down. “Communications infrastructures are being impacted by growing security requirements associated with a host of critical applications in the power grid, avionics, mobile networks, medical telemetry, IoT, transportation, and space systems, among others,” says Pickle. “The common denominator for these infrastructure segments — and the heart of today’s design challenge in an increasingly connected world — is time and how to harness it in order to synchronize secure communications systems, protocols and applications so they all work together.”

Pickle explains that in the power grid, the world is moving to a two-way system in which homes can generate their own electricity with solar energy, requiring secure and precise bidirectional communications between utilities and customers for more efficient power production and use. “In today’s enterprise, telecom and mobile network infrastructures — including the emerging IoT — a host of requirements are pushing semiconductor solutions to help implement, secure and synchronize everything from X-band weather/radar systems to GPS solutions to medical telemetry to mobile backhaul equipment.”

Automotive
There is definitely more excitement about automotive this year. Brian Derrick, vice president of corporate marketing for Mentor Graphics, says this is because “the automotive industry is transitioning from a mechanical to an electrical differentiation of their products and thus the need for electronic design automation accelerates.”

Automobiles are some of the most complex electronics systems containing up to:

  • 150 electronic networks
  • 200 microprocessors
  • 100 electronic motors
  • Hundreds of LEDs
  • Nearly 3 miles of wiring
  • More than 65 million lines of embedded software

“The automotive industry is in the middle of exciting changes that will shape the industry for the next 15 years,” notes Marc Serughetti, director of product development for the solutions group within Synopsys. “These changes are driven by the regulations to lower emissions, the need to increase safety and the demand for a connected vehicle. Advancements in the areas of electric vehicles, autonomous driving, V2V (vehicle-to-vehicle) and V2X (vehicle-to-infrastructure) communications are examples pointing to these developments. Electronics, including hardware and software, are at the core of these changes and affects the automotive supply chain from semiconductor companies to Tier 1 and OEMs.”

All of these electronic changes are expensive, too. “Electronics now account for 35% to 40% of a car’s cost, and that number is expected to increase to 50% in the future,” says Derrick. “It’s not surprising that automotive ICs are the fastest growing segment in semiconductors, approaching $20 billion annually, according to IC Insights.”

And this area has lots of potential for expansion. “There will be more focus on sensors and software for driver assistance in the near term, while vehicle-to-vehicle communication and smart roads will continue to attract attention but the concepts will remain in the research phase,” Karnofsky says.

Safety in connected cars, while enhancing the driver experience, will garner more focus. “This increased awareness will grow more rapidly than IoT because the technology is already available and we are already starting to see it in some mid-range cars,” says Karnofsky. “Radar will take its place alongside vision-based techniques for adaptive driver assistance (ADAS) systems. Integration of LTE for high-speed Internet access in cars will add a new level of testing complexity for OEM designers of infotainment systems.

Olivier Ribet, vice president of high tech at Dassault Systemes, notes that over time, the automobile will follow a similar path as the smart phone. “The proliferation of electronics systems will enable compelling new applications and will have a dramatic impact on the consumer experience. As consumers become more data dependent, there will be a rise in how sensors are used in every day devices. Automobiles become more and more connected, from sharing data to smart devices to ultimately becoming its own smart device.”

This is good news for EDA because the automotive companies are looking at improving development processes, reducing development costs, increasing product quality and reliability, and accelerating time to market, meaning that this is essentially a new market for them.

Other markets
While we have talked about the major new markets, there are always secondary areas in which new technology is required. One of the areas is in smart cards. “October 2015 should be when the United States moves to large-scale adoption of smart cards (replacing conventional credit cards),” points out Murphy. “That should drive a boom for the makers of the chips embedded in the cards and the makers of readers. But plans are still quite uncertain, thanks to the cost of adoption and the fact that smart cards fix just 60% of the security problem, leaving security holes in verifying account holder data beyond the point-of-sale (POS) readers. Upgrading that infrastructure will also drive a boom in new equipment needs for retailers and banks, but not in 2015.”

Ribet sees another trend developing, as well. “For 2015 we will begin to see a new age of consumer devices that revolve around shared use.” He says the latest generation of consumers don’t necessarily want to own objects. Instead, they will borrow, rent or share them when needed. “This will spark the demand for more modular products. Designers and developers will need to deliver high-tech products that are flexible and customizable based on the consumer’s wants and needs.”

Developments in one area also can lead to opportunities in closely related areas. Derrick sees spillover from automotive technologies. “Electronic systems interconnect tools, developed for automotive, also are being adopted in aerospace, defense, heavy equipment, off-road, agriculture, and other transportation-related markets,” he says. “As the automotive industry develops and deploys driver convenience and information systems, it will make them affordable for many of these adjacent markets.”

Finally, a word of caution from Jin Zhang, senior director of marketing for Oski Technology. “With all the exciting and almost fashionable talk about IoT, wearables and 3D printing, it’s easy to ignore or forget the EDA tools that are at the bottom of the pyramid enabling the availability and maturity of these technologies,” she says. “However, it is easy to find comments from users about 3D printers not working well, or wearable devices not reporting accurate data. With the proliferation of electronics devices in every corner of the globe in the IoT era, information security and device quality needs to be at the forefront of everyone’s concerns.”

[Last year, Semiconductor Engineering reviewed the 2014 predictions to see how close to the mark they came. You can see those in part one and part two of the retrospective. We will do the same with their predictions this year.]