VDC Research: Embedded Microprocessor, Board & Systems Market Blog

5 Keys to Winning and Holding Embedded Computer Share in the Semiconductor Test Market

With respect to Embedded Integrated Computer Systems (EICSs) the semiconductor test market has some unique attributes that may not be immediately obvious or logical to outsiders. The recent VDC report on EICSs used in the industrial automation market estimated 2010 revenues of ~$210 Million for semiconductor processing making it an attractive market to enter. Embedded computing suppliers that thrive here are likely to follow these 5 key rules.

Make it small: Floor space is at a premium in wafer fabrication/semiconductor test facilities. These facilities are often very carefully controlled for dust, static, electrical interference, vibration, temperature, and humidity and therefore represent some of the most expensive square footage in the industrial automation market with respect to operating costs. Computers that can be embedded inside or flexibly mounted to take advantage of available niches in test cells and or test equipment are well received.

Make it Fast: Reducing test times for a given device by even a few milliseconds or having the ability to test many devices in parallel are keys to winning the tester sale. EICSs in addition to deeply embedded Digital Signal Processing (DSP), Field Programmable Gate Arrays (FPGAs) and Application Specific Integrated Circuits (ASICs) are often used in high quantity to achieve this goal. It is important to remember that a semiconductor tester has to be faster than the state of the art devices it is testing. In this blog, I am focusing on EICSs but many of the 5 keys are applicable to deeply embedded computing components as well.

Make it easy/fast to service: Semiconductor testers are extremely expensive with it being quite easy for a well configured unit to cost several million dollars. Even so, the return on investment can be made in only a few weeks to the owner. Therefore, any downtime is very visible and Mean Time to Repair (MTTR) is expected to be in minutes, not hours. Suppliers should design EICSs to have very high reliability but also with easy to access mounts, enclosures, and internal components that allow them to be serviced while wearing a clean room suit and gloves.

Make a flexible configuration: The EICS that is required for a semiconductor tester varies depending on the role it is asked to perform. A production tester needs only a simple Human Machine Interface (HMI) but one that is used for test program development and debugging will need more memory depth and graphics capability to allow the engineer to see and manipulate test patterns as well as analyze the data that is captured while tests are run.

Make it exactly the same – for a long time: A semiconductor test platform will usually be actively sold for at least 5 years but often needs to be supported for at least 10 years and sometimes even longer. Once a tester platform is discontinued a market can develop for the used ones and, in some cases for them can be equal to or even exceeding their original factory price. This can happen when the demand for some legacy semiconductor devices becomes higher than expected. Once a test program has been written and specialized probe cards for wafers and/or interface boards for packaged device handlers have been designed it is extremely expensive process to move them to another tester platform.

Throughout the entire tester platform lifecycle, any changes in embedded computers can require that thousands of hours be spent to re-certify test programs and debug them if problems are seen. Faster computers will often be problematic if, for example, the programmer did not have enough settling time after an instrument was set up before making the measurement.
Changes to an EICS can also lead to increased inventory costs. Because of the MTTR concerns discussed earlier, caches of spare parts are stocked in globally dispersed warehouses and even right at customer sites to allow instant or very quick availability should a failure occur. Changes to an EICS can require multiple sets of slightly different inventory to be stocked.

In summary, a key to winning an embedded hardware product sale to a semiconductor tester company is being active in the design phase and then executing a commitment to provide a stable product through the entire tester product lifecycle. The surprise can be that a newer, faster, or cheaper EICS product will typically not unseat the incumbent unless the original supplier falters in one of the 5 key areas.

Channels of Distribution Expand as Computers-on-Modules Market Grows

Our Embedded Hardware and Systems research team recently published critical global findings of the rapidly expanding Computers-on-Modules (COMs) market.  Based on our analysis, COMs dollar volume shipments over the 2009 - 2014 forecast period are projected to grow at a rate faster than nearly all embedded hardware technologies which VDC analyzes.  In fact, based on extensive supply-side and demand-side primary research, we are forecasting the total global COMs market size will reach just over $910 million by 2014, and display a compound annual growth rate (CAGR) exceeding 23%.  

Among the clear drivers of COM shipment growth are (1) the system expansion and application-specific customization capabilities of the technology, and (2) the relatively low power consumption and small form-factor dimensions the technology possesses.

Another influential factor is time-to-market advantages OEMs, SIs, and independent hardware designers gain, as this audience continues to seek significant reduction in development time of embedded systems in industrial and commercial applications when utilizing COMs.                                    

From the channels of distribution perspective, our research suggests the marketing and sales of COMS will begin to fragment somewhat, as suppliers look to add more third-party distributors, VARs, and other resellers in an effort to capitalize on the expanding COMs market. 

In summary, VDC believes as the complexity of embedded hardware design and implementation accelerates, an ever increasing number of vendors - third-party distributors, and VARs, etc. - will continue migrating into the embedded space, with COMs and COMs-based solutions.  In fact, many large distributors have already begun offering development kits online, as well as offering other support services, that will help enable a more rapid solution development cycle.

Let us know your thoughts about global COMs market opportunities and how the channel will impact pricing, availability, and hardware and software integration.

An xITX Standards Question Answered

An important question with any standard computer architecture is what comes next? Any standard or family of standards that hopes to remain relevant must continually reinvent itself through new iterations. This can happen in various forms - reducing the board size, adding higher speed interconnects/switch fabrics, reducing power, etc. At the same time some standard families offer multiple paths forward in the form of multiple new standards and not all of these are always well adopted. In these instances where there are multiple iterations there are always question marks about whether all of them will gain enough market traction to be relevant and which ones will be the successful ones.

In the case of Mini-ITX, the extremely successful embedded motherboard form factor first created by VIA Technologies, VIA has done a very good job of providing a future road map for the standard and keeping it relevant by turning out a family of xITX standards. Since Mini-ITX VIA has added Nano-ITX, Pico-ITX, and Mobile-ITX - all smaller versions of Mini-ITX to address the constant need for ever smaller form factors in embedded applications.

However, a big question mark around these smaller xITX form factors was which would become the most successful? Our latest research on the embedded motherboards market seems to provide some insight.

Our numbers indicate that Pico-ITX is gaining the most traction throughout the market and will likely become the next most successful member of the xITX family after Mini-ITX. By 2012 total market dollar volume shipments of Pico-ITX are projected to be nearly double those of the slightly older Nano-ITX standard.

It appears that both Pico-ITX and Nano-ITX will have a place in the embedded motherboards market and both are important in offering customers a range of choices through the xITX family of form factors, but Pico-ITX is becoming more widely adopted in both suppliers' product portfolios and by customers.

Mini-ITX Success a Metaphor for General Embedded Market Trends

Having just finished the 2010 edition of VDC's Embedded Motherboards research I have spent the last month analyzing the embedded motherboards market and with it the Mini-ITX segment of that market. The level of success that Mini-ITX has been able to achieve in such a fragmented market and in such a short period of time still amazes me every time I look at this market.

But really the success of Mini-ITX is a metaphor for the major trends of the overall embedded market. Mini-ITX was designed specifically to provide low power consumption in a small and compact form factor. And to do so cheaply by creating an active backplane standard that is able to take advantage of the latest x86 silicon solutions.

Mini-ITX not only had the largest sales figure of any single embedded motherboard form factor in 2009 (eclipsing ATX by a few million dollars in dollar shipment volume), but it is also the most diversified embedded motherboard form factor by vertical market segmentation.

The reason for Mini-ITX's rapid growth and success across most embedded verticals is that size, weight, and power (SWaP) reduction has become one of the most important requirements for embedded customers across segments, if not the most important, as it is for so many customers today. Customers have become borderline obsessive about SWaP reduction, which is the very value proposition that Mini-ITX was founded on. It has been the success of Mini-ITX in reducing SWaP cheaply for customers that has made it so successful, which is also the very same thing that will enable the success of the next iterations of the standard - Nano-ITX and Pico-ITX.

2010 VDC Slot SBC Research Released

We have just finished the Slot SBC report module of our annual Embedded Hardware Market Intelligence Service.

Some of the highlights from this report include:

• The latest data shows that the total global slot SBC market is poised to return to growth of  just over 6% in 2010, to follow what appears to have been a tumultuous 2009 for the slot SBC market.
• • Lower cost, legacy architectures such as PICMG 1.0, traditional PCI, and ISA appear to have been hit particularly hard with nearly $200 million of market value being wiped away from those segments combined when you compare the 2009 actuals with VDC's most previous forecast for 2009 (released in early 2008).
  • It is true that these architectures were already in decline before the recession, however, the industry downturn caused by the recession appears to have accelerated that decline.

• The growth of the slot SBC market rests squarely on three architectures: ATCA, VPX, and PICMG 1.3. These latest generation fabric-enabled, high bandwidth architectures are driving growth in their respective verticals - ATCA in communications, VPX in mil/aero, and PICMG 1.3 in most of the other commercial segments.

For more information on this research please visit our website or contact Cyril Bernard at cbernard@vdcresearch.com or (508) 653-9000 x142.

The Embedded Hardware Boards & Systems Market a Year Into the Recession: How Has the Market Shifted and What is the New Course?

VDC hosted a live webcast today which highlighted our market research on the embedded boards and systems market.   We not only covered the challenges facing embedded suppliers and how they will have to adjust given the current economic climate, but also answered questions like:

• In which vertical markets, applications, customer types, technical solutions is demand strongest?  Weakest?
• How will supplier consolidation affect the market overall?
• Who is the competition?
• What are the key product and vendor selection criteria driving OEM and integrator adoption of embedded boards?  
• What types of professional services are customers demanding from their board suppliers?

If you missed the webcast, you can scroll through the slides below, or register to view the recording at your leisure. 

View more documents from VDC Research Group.