VDC Research: Embedded Microprocessor, Board & Systems Market Blog

Alcatel Lucent and Radisys New Product Strategies to Drive Embedded Networking Shares

Yesterday’s  news of Alcatel-Lucent attempting to gain share of the lucrative Core Router market with the introduction of the 7950 routing system is making things interesting.  This new 7950 product line would be leveraging their market share in the edge routing market in order to compete with Cisco and Juniper for a share of the core market. The new 7950 system is claimed to have a 400 Gbps processor capable of handling 70,000 high definition video streams. While this capability is impressive it is also worth noting that it achieves this at a much lower rate of electrical power usage.

The question is whether this huge leap in capability and efficiency is enough to have the major telecoms consider a heterogeneous architecture with the new products coexisting with the incumbents or make the leap of faith to committing to the new Alcatel Lucent product line. No doubt Cisco and Juniper will have products in the pipeline as an answer but the timeline for these being released is uncertain.

One way that Cisco and Juniper can defend their shares is by developing the new products as backwards compatible with the installed base or, at a minimum to the system/backplane units being sold today. That is to say that the new blades/modules could be inserted in equipment/racks that their customers already own or are available today. Otherwise, a complete platform/architecture shift removes a barrier to entry for other companies like Alcate-Lucent. As an example,  we recently observed a new T-Series Radisys 40G ATCA platform introduction where they had employed a flexible compatibility strategy. From what I understood, their customers could introduce the new blades while not having to mothball the older ones until all the slots were filled.Until the new Radisys products shipped, their customers could continue to expand their systems without worry that they would be rapidly obsoleted.

As VDC begins its exciting new research project looking at the Rich Media & Big Data markets we expect that there will be many interesting findings and these recent and anticipated new product offerings certainly are evidence of that.

New VDC Research Program Will Provide Valuable Insights into Rich Media & Big Data in Embedded Systems

We wanted to let you know about an important new annual research program we are launching called The Voice of the Customer Series: Rich Media & Big Data in Embedded Systems. The series, which is based on extensive primary research of embedded vendors and intelligent system OEMs, will provide you with the information you need to formulate and implement a best-in-class strategy for addressing the issues around and opportunities arising from rich media content and big data.

We’ve designed the program to help engineering managers at large OEMs and the embedded technology vendors who provide them with critical products and services.   Engineering managers will get expert guidance and insight into best practices and trends in the development of embedded systems that create and manage rich media and big data, and the business opportunities these new systems are creating for them and their customers.  Technology vendors – including processor, board and software vendors – will get deep insight into the rapidly evolving needs, requirements, and selection criteria of their OEM customers who are developing systems that leverage rich media and big data.  Some of the issues we’ll be looking at during the next 12 months include:

• What underlying factors are driving rich media and big data in embedded systems, and how do OEM’s approaches vary?

• How are cloud services and analytics changing OEM business models and infrastructure investments?

• Which technology vendors are best positioned to support OEM’s rich media and big data projects and programs?

• How OEMs are enabling new functionality through embedded hardware?

Want to learn more? Click here to download the Research Outline.

Curtiss-Wright Controls Sharpens Focus

Curtiss-Wright Controls, parent company of Curtiss-Wright Controls Embedded Computing (CWCEC), announced on January 9 the formation of a new business unit, Curtiss-Wright Controls Defense Solutions (CWCDS). The new unit will incorporate both CWCEC and the firm’s former Electronic Systems unit. Ref. http://www.cwcdefense.com/media-center/press-release/50.htm

The ultimate parent company, Curtiss-Wright Corporation, was formed in 1929 through the union of fifteen companies affiliated with aviation pioneers Glenn Curtiss and Wilbur and Orville Wright. Today the firm, with annual sales exceeding US$ 2 billion, operates in three primary market segments: Flow Control, Motion Control and Metal Treatment. Defense-related products and services comprised approximately 40% of overall income, covered under the Motion Control segment.

Curtiss-Wright Controls, headquartered in Charlotte, NC, is the Motion Control segment of the overall company. Both the former Embedded Computing and Electronic Systems units were part of this group.

Curtiss-Wright Controls Embedded Computing (CWCEC) was formed in 2002 through the acquisition of certain assets of Lau Defense Systems. Over the next several years, CWCEC grew to be a powerhouse in the military/aerospace segment of embedded computing, particularly on the merchant boards side. Growth was both organic and via acquisition. Succeeding acquisitions included Collins Technologies, Peritek, Systran, Novatronics, Dy 4, Prima Graphics, Synergy Microsystems, Indal Technologies, Pentland and Vmetro asa.

Military, Aerospace and Defense has, historically, been not only a primary market for CWCEC but also one of the fastest growing and most stable segments for merchant computer boards, in particular. In 2010, this market segment accounted for US$ 694 Million in shipments; this is projected to increase to US$ 912 Million in 2013. CWCEC was the number one supplier of boards to this market segment, with a market share of substantially greater than 17%. GE Intelligent Platforms was number two, with a market share slightly above 14%.

However, the projected 131% 2010-2013 increase in Mil Aero board shipments is actually less than the projected shipment growth for boards in general – 153%. Even this may prove to be optimistic, if certain massive cuts proposed for the military budget are implemented. Therefore, suppliers to this segment should be pursuing aggressive marketing and customer service policies in order to grow not only market share but actual shipments as well.

The establishment of the new Defense Solutions business unit within Curtiss-Wright Controls will not only address these issues, but will also produce a larger, yet more nimble, operation. It will also provide a sharper focus to Curtiss-Wright’s embedded efforts, targeting bread-and-butter elements of the business and reducing distractions from less critical aspects of the business.

Design West / ESC Show Highlights - Part 2

In this blog I will continue to explore some of the VDC Embedded Hardware team experience at the Design West ESC show. We saw a lot of great product demonstrations along with some excellent detailed briefings and meetings so it’s difficult to boil it all down to a reasonable size blog but here we go:

AMD: We saw a number of embedded computer products from multiple manufactures that featured AMD processors. Many of these would be great for scalable edge node applications. Heard a bit more about the latest Opteron 3200 series of processors which will likely find many cloud based applications. While at AMD we visited partner Xi3 they have some really nifty looking cube type computers that can be deployed in array like structures. The concept they were showing was a datacenter on wheels.

Atmel: Was showing some new products that seemed really great for embedded M2M type connectivity but, according to the press material I received, the details are embargoed for another week or two.

Digi-International: Digi was a company we covered in the Migrating to the Embedded Cloud report that published this week so we really wanted to stop by and see if there was anything new going on.  What we saw didn’t disappoint as there was a lot of evidence about the partnerships we talk about in the report. Digi and Wind River were announcing a collaboration to deliver M2M wireless connectivity solutions using Intel processors. This is on the heels of a similar partnership that Digi has with Freescale. We saw that Digi was using another company’s embedded computer hardware products as part of the cloud connectivity demonstration but, as that partnership is not announced; I can’t write more about that now.

Integrated Device Technology (IDT): In this booth there was a very impressive demonstration of  serial RapidIO technology being deployed in a number of different companies’ products. This is very important in cellular 3G and 4G deployments. Despite being handled by different protocols, hardware and connection methods the data travelled end-to-end efficiently and, most importantly without being corrupted.

Imagination Technologies:  We saw some really great examples of their IP used in mobile devices and applications. As people become more ingrained with mobile devices, high resolution videos, and larger screen sizes, it takes some pretty complex systems on chip to make it work. The difficult thing is getting the needed performance while not sucking the mobile equipments battery dry.

Inside Secure: As the market for M2M is growing there needs to be ways to ensure of the identity of the machines and people being connected. Inside Secure gave us a briefing on several of their security technologies that can be embedded into products to address these issues.

Lantronix: As an OEM is making design decisions on new products or looking to update older ones adding wired and/or wireless connectivity can be a problem. Lantronix briefed us on several of their products where the connective capability can be added to new designs or even old ones on an as needed basis. Almost as a proof of concept, Lantronix produced xPrintServer using technology they usually sell to OEMs to allow Apple devices to directly connect to existing legacy printers using a downloadable app.

Microchip: The VDC Embedded SW and HW teams had several meetings with Microchip and we were particularly happy to have an opportunity for a great discussion their President and CEO Steve Sanghi. As this blog looks to be running a little long, I will give the special focus to topics we covered with Mr. Sanghi in a blog next week. The hardware team learned a lot about some of the new Microchip MCUs that are adding analog circuitry such as ADCs, DACs, Op-Amps, and Comparators.  This puts more functionality into a single package while, at the same time often reduces device pin count.

Micron: I saw a detailed briefing on the latest about the Micron memory cube product. The through hole vias on the semiconductor dies that make this design possible are interesting in themselves.

National Instruments: This was another company that is covered in the Embedded Cloud report and, we saw that the Compact Rio product has some new, even more compact, product lines extensions. In the booth there was also a mock-up of a Siemens smart grid transmission line breaker module. The N/I Compact Rio was part of the design in that it could capture and transmit events that happened on the transmission lines. One of the neat things is Siemens/NI project is that the breaker can be reset remotely.

Netronome: If you ever want to see a place where powerful embedded processors are used in large quantities in high volume applications, a network flow processor is a good place to look. These impressive units we saw inspect packets and move internet traffic at extremely high rates.

Power.org: An interesting talk with one of the Directors at the IBM booth to learn more about this organization that unifies standards among its members around the Power Architecture technology with a goal of making sure that processors and communications products work efficiently as the scale of connectivity grow ever increasingly higher.

Silex: We saw some product briefings on their connectivity modules. With respect to M2M connectivity this is pretty interesting if for example you are a product designer supporting a legacy product that you want to add M2M services to or, in other cases, you are worried that a particular standard fall out of favor, and you want the product you are designing to be future proof.

SuperMicro: They have a very large line of products and the MicroCloud product was particularly interesting to us because of the embedded cloud report where we had profiled SuperMicro.  The MicroCloud product impressed us with its ability to scale up as a cloud service and/or the amount of machines being supported in an edge node application grows.

Texas Instruments: TI had a lot to show us with all types of embedded hardware products adding GPS and motion sensing as well as Wi-Fi and other connectivity. Anyone that has taken a portable device with GPS applications into a building, large city, or tunnel will realize that these types of products have a waiting market.  We also got briefings on some new process intensive DSP products that are becoming increasingly important to many markets. This is one of the topics I will expand on in the next installment of this blog series.

Next week, I’ll give a few last high level takeaways about things we saw and discussed at the show.

ADLINK TECHNOLOGY ACHIEVES NUMBER TWO PC/104 MARKET SHARE THROUGH ACQUISITION

Approximately six weeks ago, ADLINK Technology, Inc. (New Taipei City, Taiwan) announced the 100% acquisition of LiPPERT Embedded Computers GmbH (Mannheim, Germany), providing a major increase in market share for modular computing products. (http://www.lippertembedded.de/en/information/news/312-adlink-acquires-lippert.html )

 ADLINK’s first major push into the modular computing segment was the firm’s 2008 acquisition of AMPRO Computers, Inc. (San Jose, CA), now doing business as AMPRO by ADLINK. AMPRO, historically, was the inventor and a leading supplier of PC/104 family modules, as well as a pioneer in the field of Computers-on-Modules (COMs). Indeed, AMPRO’s Encore COMs had won several awards, including the EDN Innovation of the Year in 2001, and Electronique’s Electron d’Or in 2002.

Since the 2008 acquisition, the combined firm’s market shares have been quite healthy. VDC estimates that, in 2011, ADLINK held a 6.25% market share in PC/104 Family modules (the number 5 position), a  3.01% share in COMs (the number 8 position), and a 13.69% share in “other stackable” CPU modules (EBX, EPIC), yielding the number three position.

LiPPERT is also a major player in the modular field, particularly in the area of PC/104 Family modules. The firm had an estimated 2011 market share of 3.41%, occupying the number 13 slot. The combined shares of ADLINK and LiPPERT (9.67%) would have given ADLINK the number two slot, second only to the Eurotech Group.

Although LiPPERT has also been active in both the COMs and “other stackables” arenas, the firm’s market shares are substantially smaller; the addition of LiPPERT’s shares to those of ADLINK would not have been sufficient to move the firm higher in rank.

However, both firms bring considerable across-the-board expertise to the table. VDC expects this combination to be quite formidable, particularly in the PC/104 Family field.    

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.

Chips Down in Mobile, Intel Ups the Ante in 2012 with its Medfield Platform

A stamp of approval from MIT’s Technology Review, the world’s oldest technology magazine, suggests smartphones based on Intel’s Medfield CPU may give us even more to celebrate in early 2012.  Having struggled for years to enter a mobile space dominated by ARM-based CPUs, Intel’s recent release of prototype reference designs, for Medfield-based smartphones and tablets, may lift the hopes of a market previously skeptical of x86-based smartphones / tablets.  According to Technology Review, Intel’s system-on-a-chip (SoC) Medfield CPU has enabled “a chip that can match and even surpass established mobile chips.”  

Intel’s Strong Push in Mobile 

Strategic investments by Intel in research, development, and production technologies have enabled Intel to achieve significant power savings with Medfield CPU – a relative weak point for Intel’s x86 CPUs – while preserving the strong processing capabilities upon which Intel has built a name.  The smartphone reference design demonstrates the effectiveness of Intel’s combination of the Medfield CPU with a PowerVR GPU (GMA 3600), with an eight megapixel camera able to capture 10 full-size images at a rate of 15 per second in “burst mode.”  The imaging and image processing capabilities enabled by the CPU are a big step ahead for Intel, which has struggled to match the advanced graphics of competitors NVIDIA and AMD. 

However, beyond competing with the power-efficiency and cost-savings enabled by ARM-based CPUs, Intel must also assure that its x86-based devices are supported by a strong software ecosystem.  A mobile device with an Intel CPU would be useless without a range of operating systems designed to take advantage of the unique strengths of Intel’s x86 hardware, and the support of developers ready to create software for these products.   Through acquisitions, partnerships and investments, Intel has developed a more robust software ecosystem to compete in the mobile environment – most notably through its 2009 acquisition of Wind River and its recent partnership with Google to optimize Android for x86 devices.

2012: Intel versus ARM

While Intel’s circulation of these prototype designs represents a significant milestone for a company that has struggled to prove its potential in mobile, Intel has a long road ahead before companies such as Qualcomm, Marvell, and Samsung will see it as a threat.  The companies’ substantial infrastructure, including strong supplier relationships, worldwide distribution networks, advanced manufacturing facilities, and financial capital comprise a solid base for this multi-billion dollar company.  Initial reports regarding Intel’s Medfield prototype alleviate many concerns VDC has expressed regarding Intel’s success in mobile markets.

However, even Intel’s substantial base of resources cannot compensate for the significant advantage ARM maintains with a more highly-developed mobile software ecosystem.  OEMs and developers have invested significant time and money into these ARM-based devices, and may thus prove reluctant to abandon this architecture.  Intel’s work with Google to optimize Android for x86 and investment in programs such as AppUp (a fund financing applications and content development) cannot completely compensate for the porting challenges developers may face in switching to any new system architecture. 

More than anything, this news regarding Intel’s Medfield prototype represents a strong signal to mobile contenders of Intel’s determination to compete in mobile markets.  VDC believes we will see a rocky and drawn-out adoption process for Medfield phones, but these advances by Intel will serve as a strong fuel for competition amongst mobile processor manufacturers.  Competition in any market is generally good for consumers, as it attracts either innovation or pressure to lower prices.  We see this as a long-term play for Intel, building the foundation for further growth in mobile markets and setting the stage for Intel’s future.

 

Will AMD's New Strategy Shake up the Semiconductor Market?

Likely fueled by a combination of the company’s recent manufacturing challenges, struggling profitability, shrinking market share, and the recent lay off of nearly 12% of the company’s workforce, AMD’s new CEO Rory Read appears intent to forge a more decisive, independent future for AMD. Although we will have to wait until February for AMD to publicly unveil the company’s new strategic direction, recent actions and announcements illuminate the depth of change we can expect to see from AMD in coming months. In a recent interview with Mercury News, company spokesman Mike Silverman explained: “we’re at an inflection point...We will all need to let go of the old ‘AMD versus Intel’ mind-set, because it won’t be about that anymore.” 

So, if AMD intends to divert attention away from competition with its archenemy in the x86 architecture space, we are left wondering what the future will hold for this multinational semiconductor player. While AMD’s core competencies and strong presence in x86 will likely preclude drastic measures such as adoption of the ARM architecture, VDC anticipates significant changes from AMD in coming years, such as: 

• Stronger investment in research and development of power-efficient CPUs to compete with ARM in the tablet, smartphone and other high-volume mobile device markets.
• Growing focus on the company’s higher-margin server business, which saw double-digit revenue growth in the past year.
• Potential exploration of the microserver market, optimizing its low-power CPUs to meet the needs of cloud-based companies such as Amazon or Twitter.
• Continued efforts to transition chip manufacturing from Global Foundries, a 2009 spin-off of AMD, to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest dedicated independent semiconductor foundry.  

For a company that has thus far appeared complacent playing second fiddle in markets dominated by Intel, developments such as these could truly represent the “inflection point” this Sunnyvale-based semiconductor company needs. VDC believes that while the degree of risk inherent in changes of this magnitude is indisputably high, these bold alterations to AMD strategy may finally set the company on a path to develop a strong and independent presence in the semiconductor market.  

Natural Disaster in Thailand Floods HDD Market with Disruptions in Both Supply and Demand

Severe flooding in Thailand has left players in the semiconductor market reeling as companies struggle to assess the full damages and impact of this natural disaster.   Thailand has developed into a strong base for hard disk drive (HDD) manufacturing companies.  Companies such as Western Digital, the leading player in the HDD market, lost significant inventory and supplies in plants affected by the floods.  These companies will also see significant long-term effects of the flooding, as factories and infrastructure may take years to fully rebuild.  Even companies not directly affected by the flooding, such as Seagate – the number two player behind Western Digital – project difficulty meeting increased demand levels due to disruptions across the HDD supply chain.  We will not have a clear understanding of these repercussions until the floodwaters begin to clear.

We also see the effects of this flooding reverberate across the market, affecting both suppliers and buyers of these IT peripheral manufacturing companies.  Suppliers are seeing reduced demand for their products and rising inventory levels.  Customers of these peripheral companies, such as Dell, Apple and Hewlett-Packard, have seen significant shortages in supplies and thus rising prices for these components.  

VDC expects the effects of this crisis to continue through the first half of 2012 before we see HDD manufacturers recover to pre-flood levels.  Until this time, we can expect to see shortages in the HDD market cause delays for companies producing devices that use this component.  Semiconductor companies outside of Taiwan – particularly in India and China – may see rising demand in coming months, as companies work to offset the limited supply available from Taiwan – these companies will likely increase production for the first half of 2012 to satisfy this demand.  

As with the tsunami in Japan, the local effects of the flooding have strongly impacted individuals and companies native to these areas.  These companies’ customers have been monitoring the flooding situation and continue to implement significant efforts to adapt business operations and financial projections.  However, even as we expect HDD manufacturers and affected markets to rebound more effectively in mid to late 2012, the lingering impact of the recession will likely suppress overall market growth in 2012 as affected regions gradually return to normal supply and demand run rates.  

Intel Joins I3A in Effort to Capitalize on Mobile Imaging Applications

Earlier this week, the International Imaging Industry Association (I3A), a not-for-profit organization composed of various industry participants committed to the imaging industry, announced that Intel will join the association at the highest level of membership.  As a “Strategic member,” Intel can obtain a wide range of membership benefits offered by I3A, as well as influence the organization’s Mobile Imaging Interest Group and its Camera Phone Image Quality Initiative.  Interest Groups such as these follow markets and technologies of interest to their members, enabling development of industry standards and the cooperation necessary to solve challenges that may arise around imaging.  The Mobile Imaging Interest Group focuses efforts on promotion and enablement of mobile imaging innovations.  

Although other embedded processor suppliers, such as AMD and NVIDIA, have gained a competitive marketplace advantage in developing and commercializing CPU graphics capabilities, VDC believes Intel’s decision to join this association highlights the company’s interests in the rapidly-growing graphics and mobile imaging arena.  Additionally, although Intel’s initial mobile strategy seemed to be centered on the netbook market opportunity, VDC sees the company’s leadership in I3A’s Mobile Imaging Interest Group as a sign of Intel’s strategic expansion into the tablet and smartphone spaces.  I3A President Lisa Walker’s description of Intel as “an innovator in the semiconductor industry,” underscores a valid global perception of Intel given the company’s strong position in embedded silicon technology, its long-standing interest in wireless networking and mobility, and its significant resources worldwide.  So, while Intel may not currently have a significantly large presence in graphics processing, the company’s determination to more creatively target the graphics space through I3A membership should not be underestimated.