Bronco Webinar 800x100 1
Semiconductor Expert Forum

Posted on

FREE Fabless: The Transformation of the Semiconductor Industry!

FREE Fabless: The Transformation of the Semiconductor Industry!
by Daniel Nenni on 09-19-2016 at 12:00 pm
Categories: EDA, Foundries, IP

As most of you know SemiWiki published a book which is a really nice history of the fabless semiconductor ecosystem. Thousands of people have copies, we have received many compliments on it, and we are very proud. As a thank you to all SemiWiki members I would like to offer a free electronic version of the book (PDF). You can access it via the attachment at the bottom of this wiki:

Fabless: The Transformation of the Semiconductor Industry

Only registered SemiWiki members can access this wiki so if you are not already a member please join as my guest: https://www.legacy.semiwiki.com/forum/register.php

For those of you who are “seasoned” semiconductor professionals this book will be a nice walk down memory lane. If you are less seasoned it will be a great read to get you up to speed on how we got to where we are today and where we are going tomorrow, absolutely.

Preface
The purpose of this book is to illustrate the magnificence of the fabless semiconductor ecosystem, and to give credit where credit is due. We trace the history of the semiconductor industry from both a technical and business perspective. We argue that the development of the fabless business model was a key enabler of the growth in semiconductors since the mid-1980s. Because business models, as much as the technology, are what keep us thrilled with new gadgets year after year, we focus on the evolution of the electronics business. We also invited key players in the industry to contribute chapters. These “In Their Own Words” chapters allow the heavyweights of the industry to tell their corporate history for themselves, focusing on the industry developments (both in technology and business models) that made them successful, and how they in turn drive the further evolution of the semiconductor industry.

The economics of designing a chip and getting it manufactured is similar to how the pharmaceutical industry gets a new drug to market. Getting to the stage that a drug can be shipped to your local pharmacy is enormously expensive. But once it’s done, you have something that can be manufactured for a few cents and sold for, perhaps, ten dollars. ICs are like that, although for different reasons. Getting an IC designed and manufactured is incredibly expensive, but then you have something that can be manufactured for a few dollars, and put into products that can be sold for hundreds of dollars. One way to look at it is that the first IC costs many millions of dollars—you only make a lot of money
if you sell a lot of them.

What we hope you learn from this book is that even though IC-based electronics are cheap and ubiquitous, they are not cheap or easy to make. It takes teams of hundreds of design engineers to design an IC, and a complex ecosystem of software, components, and services to make it happen. The fabs that physically manufacture the ICs cost more to build than a nuclear power plant. Yet year after year, for 40 years, the cost per transistor has decreased in a steady and predictable curve. There are many reasons for this cost reduction, and we argue that the fabless semiconductor business model is among the most important of those reasons over the past three decades. The next chapter is an introduction to the history of the semiconductor industry, including the invention of the basic building block of all modern digital devices, the transistor, the invention of the integrated circuit, and the businesses that developed around them.

Table of Contents
Chapter 1: The Semiconductor Century
Chapter 2: The ASIC Business
In Their Own Words: VLSI Technology
In Their Own Words: eSilicon Corporation
Chapter 3: The FPGA
In Their Own Words: Xilinx
Chapter 4: Moving To The Fabless Model
In Their Own Words: Chips And Technologies
Chapter 5: The Rise Of The Foundry
In Their Own Words: TSMC And Open Innovation Platform
In Their Own Words: GLOBALFOUNDRIES
Chapter 6: Electronic Design Automation
In Their Own Words: Mentor Graphics
In Their Own Words: Cadence Design Systems
In Their Own Words: Synopsys
Chapter 7: Intellectual Property
In Their Own Words: ARM
In Their Own Words: Imagination
Chapter 8: What’s Next For The Semiconductor Industry

Also Download a Free Copy of EDAgraffiti!

Posted on

GLOBALFOUNDRIES Extends the FDSOI Roadmap

GLOBALFOUNDRIES Extends the FDSOI Roadmap
by Scotten Jones on 09-19-2016 at 12:00 pm
Categories: Foundries, GlobalFoundries

On September 8, 2016 GLOBALFOUNDRIES (GF) announced their 12nm FDSOI technology node. On September 12th I had a chance to interview Greg Bartlett, GF Senior Vice President for the CMOS Business Unit (as a side note, GF has: RF SOI, ASIC and CMOS business units).
Continue reading “GLOBALFOUNDRIES Extends the FDSOI Roadmap”

Posted on

CEO Interview: Xerxes Wania of Sidense

CEO Interview: Xerxes Wania of Sidense
by Daniel Nenni on 09-19-2016 at 7:00 am
Categories: Automotive, CEO Interviews, IoT, IP, Mobile, Security, Sidense

This is the first in a series of CEO interviews and I thought semiconductor IP would be a great place to start. Xerxes Wania is the President and CEO of Sidense, a leading developer of Non-Volatile Memory (NVM) One-Time Programmable (OTP) IP cores. Sidense has been a part of SemiWiki since 2013 so we know them quite well. I hope the rest of the CEO interviews are as engaging as this one:

What are the challenges facing IP providers today?
A big challenge for any IP provider is understanding a particular customer’s requirements and providing the product and service to meet those requirements. Every IP implementation is in a different system environment, in other words, on a different chip. This means that we need to have a good system-level understanding of the customer’s design along with good communication with the customer to assist in their use of our IP.

This brings up a second problem – lack of an industry-wide quality standard for IP user acceptance of a piece of IP. Customers each have their own quality acceptance criteria, so at Sidense we have a good understanding of what this criteria is and work with the customer, as needed, to meet their requirements.

A specific issue facing providers of hardened IP (like OTP) is having qualified / proven IP available at the time the customer wants to tape out their design. This is compounded since customers want flexibility to move between foundries and fabs for price and or capacity reasons. Sidense addresses this issue by anticipating the intersection between its own roadmaps and that of the customer and by fostering close relationships with the foundries so it gets early access to Spice and PDK information.

What is driving the accelerating growth in OTP adoption?
Several factors; namely the continued growth of electronic-based products (and at only 2% world-wide GDP, there is still a lot of room for further growth) and increasing use of ICs in newer applications such as the Internet of Things and automotive. The latter brings its own challenges like compliance with new safety standards and higher temperature of operation. Chip designers are also realizing that there is not a “one size fits all” in memory. Embedded memory has many uses – code and key storage, analog and sensor calibration and trimming, device configuration, secure key storage and device identification. Our 1T-OTP memory has many benefits when compared to alternative NVM technologies – these include high security, high reliability, low implementation cost, low power and field programmability. Customers are recognizing the advantages of using our OTP in their chip designs in accelerated time to market and increased end-customer satisfaction.

2015 was a record year for M&A activity and it appears that 2016 has been picking up recently. How do all these Mergers and Acquisitions affect small IP providers like Sidense?
2015 was remarkable, not in the number of mergers and acquisitions – 30 – but in the total dollar amount – $102B. 2016 started more slowly, but the M&A pace has definitely picked up over the past few months. M&A activity is driven by several factors – economies of scale, access to new markets and technologies, financial advantages (i.e., cheap money for borrowing) and government regulations. When these factors are favorable, as is the case in 2015 and so far in 2016, M&A activity increases.

However, M&As are a mixed bag for the small IP company. If one of the M&A companies is a currently a customer, you might end up licensing the other company by default. Another scenario is that a company already has the technology you offer, or a strong bond with an alternative supplier, in this case you lose out.

Which markets do you feel offer the most and best opportunities for your NVM products over the next few years and why? Is there a killer app somewhere in these markets?
At Sidense, we see great potential in the mobile and automotive markets in both the near and long term. While cell phone sales have plateaued, they still represent very large markets, particularly in the APAC region and specifically in China, and India. Much of the expected growth in IoT depends on a mobile communication device to control and read IoT edge devices. As is the case with most Smart Connected devices security, high reliability and low power are important 1T-OTP attributes valued by our customers.

As for the automotive market, automotive electrification and autonomous vehicles are leading analysts to project a CAGR over the next 5-6 years of around 6%. PMICs for power controllers, displays and other automotive systems provide a huge opportunity for OTP, as does the ramping up of more complex infotainment and more rigorous safety standards. At Sidense, we have developed 1T-OTP macros for implementation in high voltage and BCD process nodes, as well as qualifying products up to the AEC-Q100 Grade 0 operating temperature specification of 150°C for “under the hood” and transmission systems. We are also working on meeting ISO-9001, ISO 26262 Functional Safety and other automotive requirements and standards for our OTP macros.

As for a “killer app,” I don’t think there is consensus on one or two in the foreseeable future. Some to keep an eye on, however, include Augmented Reality displays, Healthcare monitoring wearables, Smart Home controllers and Smart City management.

As IoT development continues to accelerate, security for IoT devices is lagging. What is Sidense doing to help enhance security for the ICs in which your 1T-OTP macros are embedded?
We are addressing IoT and other Smart Connected market-segment concerns in several ways. Within Sidense, along with the intrinsic highly secure properties of the 1T-OTP bit cell, which does not use charge storage to determine a bit-cell state and whose programming is irreversible, we have several ways of implementing anti-hacking mechanisms in our OTP macros to provide a secure NVM system architecture. These include de-layering protection, redundant and differential read modes, program locks, hidden address sectors and temperature compensation, just to name a few. We are also partnering with companies whose core competencies include securing silicon assets and have had our 1T-OTP security confirmed by multiple independent laboratories.

Autonomous cars are a hot topic. What do you see as the major challenges in bring a fully autonomous car to the market place and how can Sidense OTP help meet these challenges?
Autonomous vehicles are indeed a hot topic, but there are several obstacles to overcome. These include government compliance and automotive industry requirements (which are still in flux), various technical issues and driver attitudes (do I want to give up control of my car?). Even more than now security will be a concern as cars become more connected, car-to-car, car-to-person and car-to-cloud, as they become autonomous driving machines.

Sidense 1T-OTP will be used in many applications to store secure code and update it when necessary, store secure encryption keys, and trim and calibrate analog circuitry and the many sensors the vehicle will employ. As the number of sensors in a car continues to increase, and we feel that the move to autonomous vehicles will sharply increase the number of sensors per car, the need for secure, low power and reliable Sidense 1T-OTP will rise as well

What innovations are Sidense working on that you would like to share with SemiWiki subscribers?
It’s a great time to be at Sidense, there is a lot going on. And it is not just limited to new technology developments, but to the many changes related to being a successful and growing company. Recruitment, staff development, infrastructure, processes, and facilities all need careful consideration and deployment.

In response to some of your prior questions I hinted at some of the exciting developments underway here at Sidense: Developments that include low voltage operation, products capable of providing high reliability over elevated temperature and enabling advanced security features. But we should also not forget development at advanced nodes such as 16, 10 and 7nms. I could go on but will finish by saying the future looks bright and exciting for Sidense and our customers.

http://www.sidense.com/

Also Read:

A Candid Conversation with the GlobalFoundries CEO!

CTO Interview with Dr. Wim Schoenmaker of Magwel

IROC Technologies CEO on Semiconductor Reliability

Posted on

Emulation as a Multi-User Shareable Resource

Emulation as a Multi-User Shareable Resource
by Bernard Murphy on 09-19-2016 at 7:00 am
Categories: Cadence, EDA

One of the great advantages of emulation is that runtimes are much faster than for simulation – sufficiently fast that you can really debug hardware together with software for comprehensive use-case testing. A not so great aspect is that emulators are expensive and, until relatively recently, not particularly easy to share across concurrent projects. That tended to focus emulation use only on the biggest, baddest, highest-revenue project you had in the shop at any given time. Which wasn’t great for optimizing return on that sizeable investment (the emulator sits idle during test development and debug, before verification starts and after tapeout), or for justifying capacity increases for the next even bigger project.

In fairness, vendors have offered forms of multi-user support for many years, but not really what we have come to expect for general-purpose systems where we don’t really care who else is using the system, or how many people are using it or what kinds of jobs they are running. We expect the OS to manage loads and maximize utilization while providing a fair balance in prioritization. Of course emulators aren’t general-purpose computers, so advancing the technology to provide this level of support wasn’t trivial. But true support for multi-user concurrent job support on emulators is now available with sufficient capability that you can now think of emulation as a multi-tasking datacenter resource, right alongside the servers you use for more conventional software tasks.

But it still requires a bit more thought to effectively load datacenter emulation than it takes for those servers. Frank Schirrmeister (Mr. Emulation, among other things, at Cadence) has written a white-paper on what you need to think about to optimize workload mixes in a virtualized emulation environment. Frank breaks it down into four pieces: Build, Allocate, Run and Debug.

The tradeoff between build-time and run-time is a good test of how a given emulation solution will fit with your job mix. Some platforms emulate quickly but build takes a long time. These systems would work well in mixes where runs dominate compiles – where each design is setup once for many long regression tests before cycling to the next round of design fixes. That profile would not work as well in mixes where you have a more heterogeneous range of objectives and where you might cycle more frequently to design fixes.


When you want to emulate 😎 general-purpose load-sharing as closely as possible, allocation is an important consideration. Jobs don’t come in fixed sized at fixed times, they end at different times and they may have different priorities. A big part of effective utilization is managing these varying parameters effectively, for maximum utilization and maximum throughput. Doing that requires an OS which can manage queuing, prioritization, task swapping and all the other features you take for granted in a multi-tasking OS.

There’s another factor too – one you probably don’t even think about – the granularity of emulation resources. Emulation task sizes can’t drop to the low levels possible in a general-purpose system – these are specialized resources after all. But the smaller the minimum size that can be supported, the more completely you can pack the space on average, so the more jobs you can service (for a distributed set of tasks) per unit time. It’s a basic tiling problem – if you have a mix of job sizes, a finer granularity gives you better utilization.

Another consideration is how effectively you can debug. Debug in the emulation world is necessarily in batch – you couldn’t afford to have an emulator occupied but idling while you’re scratching your head over a bug. So you have to decide before you start a run what signals you want to probe and over what time windows. This being hardware, there will be some constraints on these factors, and a poorly-chosen debug list may mean you have to rerun after you figure out what signals you missed, possibly more than once if a bug is far-removed from the root-cause. Also important to consider is whether updating the debug list also requires a recompile, which will further increase turnaround time on a rerun. Yet another factor is whether increasing the size of debug lists may slow emulation. These factors together require a careful balance and planning of debug strategy to ensure overall effectiveness of emulation in your shop. In general, support for big debug lists and trace windows will reduce the need for overthinking emulation runs.

Finally, give a thought to how ROI can be further improved by strong interoperability between verification methods. These often require transitions between simulation, emulation and prototyping. For instance, there is growing interest in using emulation as a way to accelerate or more accurately model components in a simulation. Here the emulator, operating in slave mode to a master simulation, models a device in an ICE environment or in a virtual equivalent. Similarly, easy transitions between FPGA prototyping and emulation, and between emulation and simulation help you get the best out of both platforms by letting the verification team get quickly to a starting point where they can then switch to a platform which allows for more detailed debug. Again this interoperability is especially important when the fix cycle is relatively short so restarting from a checkpoint won’t often help.

To read Frank’s more detailed analysis, click HERE.

More articles by Bernard…

Posted on

Digital – what is different about it?

Digital – what is different about it?
by Sudeep Kanjilal on 09-18-2016 at 4:00 pm
Categories: General

A very basic question, surely, but something that has been surprisingly difficult for many to answer coherently! There is no universally acceptable description or definition out there. Many use digital and mobile interchangeably, some more technology-minded define Digital by use of APIs (and differentiate it from ecommerce with an app-vs-browser distinction), and some define Digital based on operating system/runtime – digital is iOS and Android based ecosystem.

In my humble opinion, to get a proper definition, one needs a proper perspective. So, allow me to ‘zoom out’ and talk not in terms of decades, but millennia!
There have been, roughly speaking, 4 main revolutions that has driven human civilization forward from the stone-age to the current age:

  • Agriculture Revolution – lasted about 6 millennium. Powered primarily by human power, massive increases in calories-yield-per-acre (as compared to hunting), resulting in settlement and specialization of labor (productivity improvement).
  • Metallurgy Revolution – lasted about 3.5 millennium. Powered primarily by animal power and far better tools, significant increases in productivity, resulting in large empires
  • Industrial Revolution – lasted about 3.5 centuries. Powered by engines, another significant jump in productivity, resulting in global-spanning empires
  • Information Revolution – currently underway for the past 50 years.

The current Information Revolution, predicted to last at least another 100 years, has already proved immeasurably consequential for human civilization. It has established and powered an integrated global economy, reversed the power structure from strong unitary states (empires) to giving voice to billions of citizens, impacted and changed culture, turbo-charged innovations and enabled massive increase in human knowledge – 90% of all scientists that ever lived are alive today!
Digital is simply the next phase in this ongoing information revolution.

Its all about Information Asymmetry
So how does digital fit into the overall narrative of Information Revolution? How do we recognize it? What is the impact of this current ‘phase’? And how do we measure it?

Digital impacts our world, and especially culture and productivity, by correcting a very basic market failure – information asymmetry. Information asymmetry is a known case of failure in market economy, referring to situation where one of the party in a transaction has less information, and hence power, than the other party. As a result, the party with less information pays a penalty in terms of price, and as a result, market-clearing price is distorted.

At its core, Digitization generates data – the lifeblood of information revolution – but in a unique twist, spreads the data evenly.

Advances in computing accompanying (and driving) digitization spreads computing power evenly. This is, of course, a central trend across the entire information revolution cycle – advanced in underlying computing architecture and ecosystem from mainframe to client service to web ecosystem to distributed cloud-based on-demand handheld computing means computing power, resources and data is increasingly getting generated and consumed at the edge.

Advances in run-times – GUI to browser to api to bots – also empower the ‘edge of the network’. Trends in UI (man machine interaction) capabilities – from ‘text based command-line’ to ‘point-and-click GUI’ to ‘fat-client browsers’ to ‘multi-touch glass interface’ enabling a much deeper interaction to the coming ‘Augmented Reality’ based interface are all part of the overall digitization trend – of reducing information asymmetry.

This has profound implication on market efficiency, something that will play out over decades. Given that the world economy is about $80 trillion, a 10% improvement in price setting/market efficiency can release $8T each year into the economy – to drive further investments and growth.

We have already seen impact of this virtuous cycle in the past 2 decades – and as the new digital technologies permeates thru every sector of the economy over the next couple of decades, this cycle will kick in again.

New Business Models
Further, digital also fundamentally flips business models. For past several centuries (the industrial revolution), the core driver of productivity, profitability and business models was ‘economies of scale’. Basically, as firms gain scale, their cost-per-unit drops and thereby, gain a runaway effect of increasing scale thru reducing cost.

If one thinks carefully thru, there is however an element of information asymmetry that favors the larger firms viz-a-viz consumers. Larger firms leverage their scale to not only reduce cost, but also gain privileged access to resources and market data/prices.

Digitization not only reduces information asymmetry, it also enables new business models based on demand-size economies of scale – thru network effect. By generated and transmitting valuable commerce-intent data across network, digital savvy firms can leverage the same to create network economics, driven by Metcalf law (v = n^2) or even Reed’s law (v = 2^n) and can tip the market.
For example, in 2007, when iPhone was first introduced, 5 firms accounted for 95% of global phone market profits. Apple was just a new entrant, with no telecom related IP, no telecom supply chain, no core telecom technology, no carrier relationship (distribution network) and no experience of running a complex analog electronics based consumer devices (it is much harder than digital electronics devices). Yet, by 2015, itunes based network effect enabled Apple to ‘tip’ the market and garner 95% of global smart phone profit. Meanwhile, only one out of the previous 5 market leaders even survived!

Posted on

IOT and Assisted Living

IOT and Assisted Living
by Bill McCabe on 09-18-2016 at 12:00 pm
Categories: IoT

It is most likely the you have heard the term “internet of things”or IOT in regards to everyday things such as our televisions and phones. That is not however where this new innovation is going to end. There has been a lot of talk about the IOT stepping into the healthcare industry with things like connected healthcare.

Another area where we can expect to see the IOT playing a large role is in assisted living. It is no secret that people are living longer than we ever have before. It has even been said that the first person to see the age 150 has already been born. It should come as no surprise then that nursing homes and senior assisted living facilities are full to bursting with elderly people whom are healthy but incapable or afraid to live on their own. The IOT could help with this.

We are all familiar with products such as Life Alert that have been used to give seniors a sense of security in their own home. These types of things allowed seniors to remain in their homes longer than before. They are not perfect though. The fact is that the technology behind these types of monitoring devices is out dated. It relies on a live person being available 24/7 to respond to the individuals call for help. What happens when the person in question does not have the capability of triggering the monitoring device though? This is where the IOT can step in.

Recently engineers have developed sensors that can be placed discreetly throughout the home. These sensors then monitor the resident’s movements and activities throughout the day. These sensors rely not on a live person monitoring them, but on algorithms and programming that over time learn the normal habits of the person living in the home. They monitor things such as…

  • location of the resident within the home
  • light sources being used
  • bed time and awakening time
  • television watching
  • cooking
  • bathroom usage
  • leaving the home and returning
  • heating or air conditioning temperature and adjustments

Then in the case of an emergency or variations to that pattern that do not fit the normal activity within the home can notify family members or medical professionals.

Another development is something similar to that of Life Alert but more sophisticated. Wireless vital sign monitors. These devices can notify first responders of medical emergencies such as stroke, heart attack and a loss of consciousness without the person suffering having to do anything at all. Further they could notify patients of an issue well before it actually happens, such as notifying a heart patients doctor that their heartrate has been erratic over a period of time, thus indicating that further investigation may be needed. It is not hard to see that very soon we could see the IOT playing a large role in the lives of our seniors, or anyone that needs some form of assistance.

For more information about IOT and Healthcare please check out our new website www.internetofthingsrecruiting.com

Posted on

VHDL parameterized PWM controller

VHDL parameterized PWM controller
by Claudio Avi Chami on 09-18-2016 at 7:00 am
Categories: FPGA

Digital outputs can either go ON or OFF. Analog signals, on the other side, can smoothly assume multiple values in a range. There is a technique that emulates analog behavior with a digital output. That technique is PWM, namely, Pulse Width Modulation. It can be implemented as pulses with varying ‘high’ and ‘low’ duration. However, one rather simple implementation is to take a fixed output frequency and vary only the duty cycle. If the pulses are fast enough compared to the response time of the system, a PWM is equivalent to a varying analog signal, whose amplitude is proportional to the duty cycle.
 Continue reading “VHDL parameterized PWM controller”

Posted on

KLAM Kommentary – Assessing the political landscape of approval

KLAM Kommentary – Assessing the political landscape of approval
by Robert Maire on 09-16-2016 at 12:00 pm
Categories: Semiconductor Advisors, Semiconductor Services

LRCX & KLAC’s merger continues to be closely watched given the recent turns and reversals we have seen which call into question the ability to get the deal done. The deal was announced in October of 2015 and we are on our second request from the DOJ and the deal will almost certainly go beyond the Oct 20th, one year deadline to get it done.

We still think that the probability of deal approval is over 50% but that the remedy and other potential business costs will likely increase making the deal less attractive than when first announced.

On Semiconductor and Fairchild – Throw the dog an IGBT bone……..
A good comparison to the KLAM deal is the $2.4B acquisition of the storied Fairchild Semiconductor by On Semiconductor. The deal was announced on Nov 18th of 2015, about a month after the KLAM deal was announced and much like the KLAM deal also got a second request from the DOJ in March.
The issue revolved around the IGBT (Insulated Gate Bipolar Transistor ) business’s when combined would exceed 60% market share in the automotive segment, which was a clear HSR issue.

Our observation is that while it is clear that its an HSR issue the amount of business involved is only about $25M per year which is not even a rounding error in the $2.4B deal. For the DOJ to care so much about so little gives you an idea about the state of affairs and current attitude about M&A deals inside the DOJ. Obviously every deal gets the microscope treatment and the DOJ obviously listens to every complaint even if its the auto industry which is hundreds of billions complaining about a component that costs relative pennies and is an even smaller rounding error on a rounding error in the industry.

On Semiconductor made it clear when the second request came out that they were willing to divest the IGBT business back in March and the deal was recently approved and ON Semi announced it had an agreement to divest the business.

Basically it took five months from agreeing to divest to find a buyer and get DOJ clearance.
In the case on ON Semiconductor, it was relatively easy for them to agree to throw the DOJ dog a small bone, the IGBT business, in order to win approval. It was far from crucial to the deal so it was a no brainer.

In the case of KLAM, however, the potential remedies are not small nor insignificant, and there is no small bone to throw the DOJ , only an arm or a leg, as the CD (critical dimension) or thin film businesses are key to the suite of products that KLA provides.

This obviously makes for interesting discussions and negotiations with the DOJ. The timing could get very long and border on AMAT/TEL timing if we compare that ON Semi was announced a month after KLAM and only just got approval of a simple divestiture. It implies that the deal could drag out along time.

For more info:
FTC IGBT Agreement
FTC anti competitive analysis

Comcast & Dreamworks…..Problems with the Panda…
Recently China’s MOFCOM (Ministry of Commerce, the equivalent of the FTC/DOJ) announced an investigation of the proposed $3.8B acquisition of Dreamworks, the animation studio that brought us notable classics such as Kung Fu Panda, by Comcast the cable giant. The deal was originally announced in April but recently MOFCOM said it received several anti-competitive complaints that triggered the investigation.

Given that China has made it a strategic goal to become a leader in semiconductor technology and has already been active in spending an alleged $100B war chest dedicated to the semiconductor industry we would imagine that MOFCOM may be even more interested in chips than cartoons…..

China has be rebuffed in several instances in buying US technology companies and was also rebuffed in its efforts to buy Fairchild with an offer higher than ON Semi.

There are small equipment companies in China like AMEC that both Applied and Lam have gone after in recent years.

China has also investigated and fined a dozen M&A deals this year alone for “gun jumping”, proceeding with a deal without prior approval. This suggests that China is already sensitive to M&A deals that are not in its national interest (and KLAM is certainly not).

The KLAM combination is likely scary as China has no domestic companies with similar technology to KLA. AMEC does compete with Lam and Applied but has been really held back by these larger competitors.KLAM likely really hits a very sensitive spot with Chinese regulators. The prospect of KLA and Lam getting together is a lot more scary to Chinese regulators than a fluffy Panda.

Uncertainty discounts and spreads….
The stocks of LRCX and KLAC have not suffered too much from the added uncertainty of the deal. We would continue to be owners of KLAC but think that LRCX is overdone over $90 especially given deal uncertainty.

There is likely near term risk with trickle down from the Apple announcement in addition.
As we have said from the very beginning when the deal was announced, it will take longer and cost more than predicted, and so far we have been correct…..

Every additional day that goes by increases costs and risks and reduces synergies. Much as Lam flourished while Applied and TEL were engaged so has Applied flourished while the KLAM engagement has gone on…..

Posted on

Developing Countries – Unlikely Champions of IOT

Developing Countries – Unlikely Champions of IOT
by Bill McCabe on 09-16-2016 at 7:00 am
Categories: IoT

When considering any new or emerging technology, it can be easy to immediately think of the potential implementation in developed markets. After all, these are the markets where consumers have high purchasing power, and businesses and governments have strong credit lines and funding options. Well, wouldn’t it be a surprise to learn that the developing world will likely be responsible for almost half of all revenue generated by IoT? This is exactly what a 2015 report from the International Telecommunication Union stated, and if you look at trends and innovation around the world, there is evidence that supports the prediction.

Industry Leaders Recognize the Value of IoT in Developing Markets
Take India as an example. Although it is one of the largest countries by area, and the second most populous in the world, it is still considered to be a developing country by leading economists. Even so, there are some areas where India is a leader in IoT. In 2015, IBM selected the Indian city of Vizag as a winner in their Smarter Cities Challenge. This city wants to improve its disaster preparedness and response programs through the use of IoT technologies, and with the help of IBM, the government will work towards implementing a sensor based utility grid, improve citywide electronic communications, and develop an emergency command center that uses historical data and machine sensors to better predict and respond to natural disasters.

This program has the potential to attract foreign investment, create jobs, and save lives.

Markets That are Ideal for IoT Investment
One reason why developing nations are prime for IoT investment is because many of them can make immediate use of IoT technologies for critical applications. In the gridlocked Philippine region of Metro Manila, government agencies are using connected machines to monitor traffic in real time and provide public alerts. The metropolitan area is served by a number of CCTV systems and sensors that can be accessed through APIs, allowing for news stations and privately developed smartphone apps to provide instant updates to the general public.

Safety is also an issue in many developing countries, and again, we can use Metro Manila as an example. The region’s widely utilized MRT rail lines are often overcrowded and sometimes dangerous. With connected technology, members of the public can already access the MRT security CCTV feeds from smartphones and web browsers, allowing them to view real time platform video to help plan their daily commutes.

Perhaps one of the biggest advantages that developing countries have is that they are lacking in some areas of infrastructure. A developing city that now has the funds to invest in widespread water metering will have more incentive to use accurate and efficient machine driven meters. By contrast, a long developed city would have to weigh up the cost savings of an IoT based system, compared to the efficiency of their current metering system.

IoT Infrastructure Can Be Built on Existing Cellular Networks
Despite lack of infrastructure in some areas, LTE penetration is high in a number of developing economies, meaning that there is increased opportunity for bringing IoT services to corporations and the general public. India has LTE penetration throughout more than 50% of the population, which means that there is potential to connect more than half a billion people to the Internet of Things. China, which could be considered still developing in some provinces and cities, boasts LTE coverage across 76% of the mainland. That’s only two points behind the United States, and China has more than four times the population, allowing for massive opportunity in the consumer and public service IoT sectors.

While the developed world is no doubt leading in IoT innovation, developing countries will contribute significantly to revenue, adoption, and investment. With more than $6 trillion in worldwide IoT investment expected by 2020, developers and innovators cannot afford to ignore the world’s developing economies.

For more information please review our new website www.internetofthingsrecruiting.com