Viva the New Industrial Revolution! What Etsy, 3D Printing, and Kickstarter Means to Semiconductor Companies?

The world is changing and IC companies need to adapt to this to stay competitive — moving to systems (hardware and software) vs. just product (hardware). Three key trends that are underway that change the way IC vendors need to think about their customer and the customer’s customer:

• Markets are Fragmenting: We are moving away from the homogenous baby boomer generation to a heterogeneous world of multiple generational, multicultural wants and needs. These new consumer’s are seeking products that are uniquely crafted and of high quality — think Etsy. Design becomes as important as functionality. Young consumers want something that is unique to their interests — not volume, but high value.

• Means and Barriers to Manufacturing are Declining:3D printing and cloud fabs or prototype manufacturing are changing the way things are made. Design software like Autodesk 360 is becoming virtually free. In the near future, you will be able to make parts or who products right at your home. Mass Customization will be the rule not the exception. Even electronic circuits are readily modularized for makers in things like LittleBits or Tiny Circuits.

• Crowd-funding for New Products:Kickstarter and other sites provide early funding to new products of all types. Even venture capital firms are asking start-ups to first seek crowd-funding and if the product gets funding then they look to follow-on investments.

The Da Vinci 3D All-In-One Scanner/Printer

The above trends will cause IC companies to act faster with respect to IC design and manufacturing. Also, the idea behind Moore’s Law — the learning curve and reducing costs in conjunction with greater volumes doesn’t work in a world of Mass Customization and 3D Printing. Which brings me to this observation — 3D printing is changing the way we look at product development. Now the newDa Vinci All-In-One 3D Scanner/Printeris on the scene at a price point of $799 a significant price below the Stratasys Makerbot Replicator 3D printer. Now makers/designers have the capability to scan (copy) objects and then print them in one machine. This further reduces the barriers to manufacturing in a very important way.

Why Etsy, 3D Printing and Kickstarter are Important to IC Vendors?

IC vendors — don’t think volume, think systems. More integration requested by the customer seems logical, but can you get paid for it and how long will it take to develop the IC? Think programmability like microcontrollers like Arduino (Atmel) mbed (ARM), or PIC (Microchip). Programmability gives you the IC vendor ability to modify IC functionality using software and increase time to market and not be dependent solely on volume.

Second, how can you improve or enhance your offering using software? Can you make your IC offering more flexible, responsive and easy to use with software? Think of National Semiconductor’s Simple Switcher that allowed the engineer to develop a power management solution with simple inputs, but at a much, higher level. See the links to Littlebits or TinyCircuits above.

Third, IC vendors need to think look to new markets and don’t depend solely on existing markets. Leaders in one platform say PC’s (Intel/Microsoft) don’t necessarily lead in the new platform Smartphones (Qualcomm, Apple, Android). If Mass Customization though the Internet of Things (IoT) becomes a new platform, new leaders will likely emerge. Will or can you become a leader?

Therefore, IC vendors need to seek new potential product areas — I suggest that you attend some IoT Meet-up groups like PnP Thursdays or IoT Business Meetup SV. If you don’t know what a Meet-up group is you are already behind. Get Peter Thiel’s book “Zero to One”. One of Peter’s thoughts: “Figure out something that nobody else is doing and look to create a monopoly in some area that’s been underdeveloped.”