The megatrends facing the semiconductor industry are driving Freescale Semiconductor back into the consumer sector, an area where the former Motorola semiconductor products division has long had a love/hate relationship.
Sumit Sadana, vice president of strategy and business development at Freescale, said going forward the semiconductor industry will enjoy only half its historical growth rate. Consumers are accounting for much of the growth. Last year, for the first time, consumers accounted for more semiconductor consumption than corporate purchases.
“Consumers, for the first time ever, overtook the purchases by corporations, and the consumer purchases intersected at a pretty steep angle. And consumer ICs are fastest to revenue. We have had good success in autos, but while it might take six to nine months to revenues in the consumer space it can take three years in automotive,” Sadana said Monday (March 5) at a gathering of reporters and industry analysts.
While people think of semiconductors as a hardware business, software is now the differentiator. “To succeed in consumer and multimedia, we have to go a lot deeper into vertical markets, which is more costly than just a component play. We need systems expertise, with more involvement in the software, and at a higher level. That requires deeper engagements with the customers.”
Freescale has been talking about consumer for several years now, leveraging its expertise in networking, for example, to create reference designs for home media gateways. Going forward, the company’s SmartMOS 10 process for mixed-signal ICs will give it performance and power consumption advantages in consumer designs, he said. And wireless is entering the home in a big way, giving Freescale another means of creating consumer chips that are “adjacent to our core competencies.” IPTV is another opportunity.
After a decade of market share losses to companies such as Broadcom, Freescale enjoyed 9 percent top-line growth last year – 12 percent if the withdrawal from Apple is taken into account.
For a company accustomed to longer design cycles in telecom and automotive, the challenge is to move faster while developing a full hardware/software offering.
To succeed in consumer, Freescale must adapt to “shorter design cycles and an ecosystem of third-party design partners,” Sadana said.
About weQuest: weQuest's are written by G Dan Hutcheson, his career spans more than thirty years, in which he became a well-known as a visionary for helping companies make businesses out of technology. This includes hundreds of successful programs involving product development, positioning, and launch in Semiconductor, Technology, Medicine, Energy, Business, High Tech, Enviorntment, Electronics, healthcare and Business devisions.