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“IoT and the car is like a gift for Freescale”

“IoT and the car is like a gift for Freescale”

Interviews |
By eeNews Europe



eeNews Europe: Freescale has lost market share in the auto,otive semiconductor markets and dropped in semiconductor rankings. What is the reason for this decline – and does Freescale have a strategy to better the situation?

Steve Wainwright: We at Freescale measure us against the Total Available Market (TAM), the total world of semiconductors. But there are two exceptions, and they are very important in terms of answering this question: Memories – this is a massively separate business, it has nothing to do with what we do, so we don’t measure ourselves against that. The other thing is discretes, because we don’t take part in the discrete transistor business. For instance we do not manufacture IGBTs. When you look at what is going on in the automotive business, you’ll see that power electronics is playing a much bigger part than it did ever before. So when you look at absolute share, there is, if you will, a distortion because of the amount of power electronics that are happening. Take for example Infineon – without beating about the bush they are world leaders in IGBTs. With hybrid cars and electrically powered cars there is a lot of power electronics that we are not participating in. This clearly has an impact on market shares.

If you go beyond that and look at the markets we do care about, if you look at the analogue portion inside cars and the microcontrollers portions, in both cases in 2013 we grew faster than the market and were very encouraged in terms of what’s happening in these market spaces. For a very long time, microcontrollers were focused on applications like engine management, powertrain management, body control, and braking – and those are still very important applications we are very engaged in. But the new explosion of applications is about infotainment and advanced driver assistance programs – and these got a completely different dimension in them. They are much higher compute-intensive applications, there’s a much higher level of complexity, big graphics content, and that in turn gets you into a much more complex situation in terms of software, in terms of communications issues and everything that goes with that, most notably security, particularly for safety applications. With all those things in mind, in the spaces we’re playing in we see an increase in market share and not a decrease and we are seeing applications developing in a way which we think plays very much towards the strengths that we have as a leader in microcontrollers.

eeNews Europe: Does this mean that Freescale actually should rank much higher than in what has been published, if one regards the markets you are active in?

Wainwright: If you look at the WSTS numbers we tend to use – World Semiconductor Trade Statistics – and we exclude memories and discretes, there cannot be any doubt that there is a distortion because of power. Frankly, it is only a distortion if you are not in it. If I was working for Infineon, I’d certainly say "Well, that’s the total semiconductor market and we are growing" and so they are. It would be wrong to say that because we’re not in power electronics we have no interest in hybrid. In several areas – for stop-start, for example, we have considerable play there with smart power devices, we also have big interest in battery management (BMS) technology which is another growing business for us. So we have quite some engagement it systems that will affect the smart hybrid market. It’s just that we are not in the IGBT transistor business.

Jürgen Weyer: I Think it is more important for us to focus on certain segments. We have looked at our channel activities and our R&D spending. More important than be a player in every market segment is that in the market segment we have chosen to hold a clearly differentiated number one or number two position.

eeNews Europe: Which developments does Freescale expect in the automotive arena that are relevant for the semiconductor industry?

Wainwright: The real trend is Advanced Driver Assistance. The core of this approach is using sensor fusion – typically a combination of video and radar. It means that there is a lot more graphical interface as well to present this information to drivers. This area is tremendously important to us because it is interfacing things that are external to the car to the internal car systems like stability control and so on. We see that as a very important trend in its own right and that ADAS is being an enabler what follows which is a degree of autonomy. It is like adaptive cruise control taken to the next level, like systems for self-parking for example. Or, take platooning. These applications are developing and they are really very important for us. That’s how we see the evolution towards autonomous cars.

eeNews Europe: How does Freescale preparing for future trends like connected car and automated driving?

Wainwright: Freescale is in a very unique position – we have a big sensor, microcontroller and network management business. If you think about the next level of challenge if you go towards autonomous car is that all the systems we can comprehend at the moment going towards ADAS and then going the next level towards connectivity. If you think about the amount of data and the security you are going to have and that this is eventually involving some sort of communication with the cloud – this is an exciting area for as, an area we are actively looking at in our further R&D. It will give us the opportunity of integrating our networking expertise with our automotive expertise. This will be a real initiative we will follow the coming years.

eeNews Europe: Given the long design cycles in the automotive world of up to seven years, if you look into the future so far: What do you think will be the next step?

Wainwright: The next step will be a research phase. It will involve car OEMs, tier ones and semiconductor suppliers. We will explore the potential for alliances because there is such a depth of systems that need to come together in this area. The next level will be some semi-autonomous vehicle. We see a gradual increase of self-driving happening. It needs to be mentioned that some of the major roadblocks for autonomous driving have nothing to do with technology, but with liability and the legal situation. For this reason, the next step will be getting into some detailed, tri-partite research activity – that will be the real activity towards autonomous driving.

eeNews Europe: Will these new alliances lead to a redesign of the value chain?

Wainwright: This is not what I meant to say. I am considering this more from a technology point of view, from an enabling point of view. I think you are right that this implies new business models somewhere down the line. This autonomy is a very interesting idea, and when it is eventually up and running – is it a revenue stream? And if it is one, is it a revenue stream for manufacturers, for service providers, for local authorities or for all of the above? If we disregard these business models, the first stage we are active at the moment is how can we master the technology and those challenges before we can go into business models.

Weyer: I think there will be all kind of combinations. But what we really see is that our technologies are at the heart of all of innovation in today’s cars and in the next generation. Technology development in the automotive industry is about connected, comfortable and green mobility, and all of these things under safe and secure aspects – and combined with zero ppm (errors) and 15 years of supply. When you put all these things together, we believe that there are not many companies capable of doing this. Where necessary we will cooperate with partners or even competitors, as we did in the adaption of Ethernet technology to automotive standards. But it does not stop within the car. Now we talk car2x, car2car, we talk about how to interpret sensor data, how we can do sensor fusion – there is a wide variety of situations and cooperation constellations.

eeNews Europe: You mentioned that IGBTs is not Freescale’s business – but we are heading into electromobility. Which places in the car would Freescale occupy in an electric vehicle?

Wainwright: All of the connectivity requirements are still absolutely valid, and in many cases even more so. If you think about things like ITS (Intelligent Traffic Systems) where power or range is not more scalable those sorts of systems come to the fore. Take the idea of dynamic rerouting for example, cloud-based services being able to help with contextual awareness – where is the car, what das this mean in terms of driving conditions, of battery life and so on – all these things require the same or more connectivity as a car with combustion engine. Braking will exactly be the same, the powertrain challenges will be very similar. It is pretty well understood that hybrid is going to be the biggest junk of the market and this approach requires a massive amount of processing – how you seamlessly feed electrical and thermal power together, how you manage that, how you manage the transmission. There is just as many opportunities or even more in hybrid or electric vehicles than there are in the present time. It actually does not matter if there are thermal engines or electric ones.

Weyer: Not to mention that hybrid and electric systems require battery management, battery and cell management, voltage control at the 48V level, charging – all this is a major element in the electric cars, in addition to all the processing.

eeNews Europe: The buzzword these days is the Internet of Things, and this is a place where Freescale is regarded as a strong player. Do you see synergies between IoT and Automotive technologies?

Wainwright: Absolutely. You can think about the car as just another node …

Weyer: … actually, the car is the most complex node in the IoT…

Wainwright: One of the vital questions for the IoT is how close you can have intelligence to the edge of the network. Between sensing at the edge of the network and big data at the core there is an awful lot of processing that needs to go on. The more processing you can get at the edge of the network the better, because it will be quicker, it will probably be more secure and you have this opportunity of intelligent, learning nodes so you can embed intelligence in a layered approach. I think there is an awful lot of play in this intelligence closer to the edge of the network, and I think this is one of the real things that will happen in the cars. In a car, a lot of data will be self-contained – and there is a lot of data going to and coming from the cloud. The car is a fantastic example of additional services we can imagine – location based services, safety.

One of the problems with the IoT total concept as it applies to driver safety is latency. If you think about traditional ways of communication with things like LTE for example, one of the problems would be the reliability of coverage and latency. What this means is the communications for the car will require a suite of different protocols. It is not going to be one winner and not everything will require LTE. It is going to have a variety of protocols and systems to combat latency and coverage issues.

IoT and the car, for me it is almost like a gift. It could not be any better because it is a massive processing challenge, and this is what we absolutely love. It is all stuff that already exists, it is stuff that we do and it makes a much better story than I can remember in the past. The only thing I am worrying about is we are all of an age that we can remember what happened in the dotcom boom and I do worry that the IoT is getting so much play – and when you see the acquisition activities going on with companies bought at extremely high prices that do not necessary have an established revenue stream yet it does seem to have some similarities to the dotcom boom. What however is different is that the base technology is absolutely there. We are talking about a business opportunity where the processing, sensing, network management is mature. What we have to do is to step up to the additional complexity of the sheer number of things that have to be connected.

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