As Joanne said, CES was all about the touch screen display – and yes, its very minority reportish.  Putting this one on my wish list.

For example, Kurt Smith, a VP of Verizon Communications Inc., believes a mature supply chain requires three levels: the content creators/manufacturer, the distributer, and the retailer — for no other reason than that’s the way it’s always been done.

Verizon is already behind. This is a lag built upon a generational gap that we can only vaguely understand. For those of us who didn’t grow up with the Internet, the texting of the newer generation is confounding. Worse, today’s toddlers are using iPads in the cradle, so in 10 years the gap will be even larger and more confusing.

And yet, the majority of the panel sessions at CES were filled with old white men. I saw no minorities on the panels. There were two women in the sessions I attended, one older woman who wasn’t even familiar with the panel she was moderating, and another who seemed more afraid of technology than anything else, a disturbing lack of diversity that didn’t reflect the audience in any way.

On the show floor, it was shown just how this disparity is playing out.

George Haber, CEO of Cresta Tech, said, “If it can be done in software, it will.” And to expand upon that, if your product can be replaced with software, it will be, and you’re already behind in this new world. Additionally, this new ecosystem also revolves around a DIY generation: We install our own smart home products; we do our own plumbing; we fix our own phones; and we, the consumers, make hardware obsolete.

Fujitsu is one “victim” of this generation. At CES it showed a tablet that could be completely submerged under water. The downside: The tablet is much more expensive to buy, and if there are any cracks, it must be sent away for Fujitsu to fix. Meanwhile, a product like Liquipel is about $70 and does the same thing with a nano coating. A DIY solution vs. a hardware solution.

We’ve entered this new frontier because we’ve reached a tipping point in technology. When phones start having quad-cores it’s time to admit the “device wars” are over. Other than some tweaking here and there with battery life and sound, how is a company supposed to differentiate itself? Enter, the digital ecosystem “wars.”

The companies at CES reacted to this switch-over in varying ways. Sony Corp.  brought nothing new or interesting to the table in terms of hardware. Instead, it focused on its own ecosystem in an attempt to show consumers how its software is better than Microsoft’s or Apple’s.

Nokia Corp. reacted to this switch-over with a sigh of inevitability. The new ecosystem is narrowing in on the digital home, which the Android and iOS have completely covered. Nokia never made inroads into that market, so it’s done the only thing it could to set itself apart and to keep fighting as one of the largest phone manufacturers of the world: It partnered with Microsoft Corp.

In the fight over you, the consumer, Nokia knows the ecosystem you’ll chose eventually is the same one you’ll ultimately use on your TV, your tablet, your smart home interface (which might be a gaming device, a tablet, a blu-ray, etc.), and your phone.

But maybe you’ve already chosen your ecosystem. Maybe, for you, the battle is already over. In which case, where is our Apple TV?

It all started for me at the Qualcomm morning keynote.   Banking on a commitment from Microsoft, Qualcomm is supporting Windows 8 along with ARM technology.  Their move into the x86 arena was showcased on stage with a demo tablet powered by Qualcomm’s Snapdragon S4 running Windows 8.  Furthering Qualcomm’s expansion into the home, Lenovo showed off their SmartTV powered by Snapdragon with voice activated remote control.  Can they truly get an instant on device?

Walking the floor there were many booths displaying motion sensing software.  Soon our online shopping experience will be improved as we virtually try on clothes using motion sensing devices that allow us to view the item’s fit as well as the color.

Two items that I think will change our ‘relationship’ with electronic devices include Toshiba’s TransferJet^TM technology and a nano coating from P2i Ltd. (www.p2i.com) which makes our electronic devices waterproof.  First, a recap of P2i’s nano coating technology.

P2i Ltd has developed a technology that attaches a nanometer-thin polymer layer over the entire surface of a product, for example a semiconductor chip or the entire board.   The layer protects the device from moisture so that when liquids come into contact with it, they form beads and simply run off.  Their demo consisted of two tissues (yes, a Kleenex tissue), one that was coated and one that wasn’t.  They both looked the same, they felt the same but the water on the coated tissue formed into little beads that rolled right off.  When it rolled onto the uncoated tissue, it soaked right in.   The secret to P2i’s technology is a special application process which utilizes pulsed ionized gas, that is created within a vacuum chamber to attach the polymer layer.

Aridion™ is the P2i product line designed for electronic products.  It’s an invisible liquid repellent coating that does not affect the working components of electronics and it maintains the look, feel and functionality of the device.  This could substantially reduce warranty failure and repair costs of our electronic devices.  Just think, we can drop our cell phone into the toilet and it would still work. But who’s going to reach in and get it?   It’s a much nicer option than the protective bags that some exhibitors were trying to sell.

Toshiba America also intrigued me with their single-chip LSI RFCMOS solution to support TransferJet^TM.  TransferJet^TM was developed to transfer digital content via close proximity as a download file or streaming.  It has the capability of transferring files seven times faster than traditional Wi-Fi with a physical layer transmission rate of 560 Mbps and a throughput of 375 Mbps.  An example of the speed, one-hour of TV programming can be transferred in just a few seconds. Short transmission distance reduces the risk of hacking without the need for complex security.

Source:  Toshiba America Electronic Components, Inc.

All in all, I don’t think there was a revolutionary new electronic device at CES this year but the enhancements have already enticed me, and probably everyone else, to a product upgrade very soon.

Joanne Itow, Managing DIrector

Qualcomm CEO Dr. Paul Jacobs gave the opening keynote speech on Tuesday, January 10^th.  During his presentation he invited Liu Jun, President of Lenovo mobile internet and digital home group on stage for an announcement from Lenovo.  Jun proceeded to demo his company’s SmartTV that is being powered by Qualcomm’s snapdragon SoC. The TV is currently only available in China but what I found interesting was that Lenovo was expanding its product line into the consumer’s living room. It’s also a feather in Qualcomm’s hat, as it expands Qualcomm’s market penetration into televisions.

Several hours later at an afternoon keynote speech Intel’s CEO Paul Otellini also brought out Liu Jun, from Lenovo for an announcement. Liu Jun proceeded to announce that Lenovo would be producing a smart phone powered by Intel’s atom. Yet another market that Lenovo is continuing to expand into.  And what a great win for Intel.  They’ve been targeting the atom processor for smart phones and now they not only have Motorola, an established player in the cell phone market, but they also have a partner with a built in connection to the China market.

After listening to both keynote presentations, I was struck by the thought that Lenovo has been quite clever in their interactions with processor semiconductor companies. Lenovo has chosen the underdog for both of its announcements. Intel which has not successfully penetrated smart phone market is now going to supply one of the world’s largest OEMs a smart phone processor. Likewise Qualcomm is not the leader in TV processors. This design could open the door for Qualcomm to expand into the broader consumer market.

In the back of my mind I thought how clever for Lenovo to avoid selecting the number one vendors for each application.  Semico believes this is good for the market. It will most likely increase a healthy competition for these sockets.  Was their decision risky? I don’t believe so; both companies are highly successful in the markets they serve.  These design wins give an expanded beachhead for both Intel and Qualcomm into expanded markets both by application and by geography.  Semico congratulates Lenovo for its new products and for fostering continued innovation in the semiconductor industry.

-Jim Feldhan, President

But the truth is, DRM defines how a user will interact with technology. And it defines how different devices are able to communicate. Can you play that movie you downloaded on your tablet, smartphone, or TV? That’s DRM, and it’s also the digital ecosystem from a consumer’s point of view.

One of the themes from this year’s Consumer Electronics Show was that we’ve moved beyond devices. Moore’s Law has ensured that we’ve reached an age where one notebook or another is pretty much the same. So the struggle for the hearts of consumers is now about convincing them which ecosystem, or user interface, is the best for them. That will decide what phone they buy, which TV, which tablet, etc. And all of this is built upon DRM.

So what did CES tell us about DRM? That it’s going to be a long, hard battle for our rights as consumers during the next five years. I say this, not because anyone at CES told me, but because of how the security sessions went. Led by a Department of Homeland Security moderator, the mobile security panel showed that they’re afraid of technology, and that their solution to all the security problems out there is to tether us more firmly to the grid. Every step you take will require authentication.

But security is gained by being as far off the grid as possible, not by being tethered to it. All in all, the worst idea I heard at CES, for our “safety,” was the idea of tethering our debit cards to our smartphones so that you can only use your debit card if your smartphone is right there with you. For your safety. Or extreme annoyance.

Yet, did anyone on the panel discuss Sony’s loss of its PS3 customers’ personal data? Personal data that it stores for its customers’ “security”? No. As consumers, our biggest security vulnerability comes from the corporations. The lists of passwords and usernames we’re forced to create, along with the PINs and security questions — those are all security leaks waiting to happen. If I lose my computer, my data is lost and my identity may be compromised. If Sony loses its computer, millions of people’s data is lost.

So why is the security discussion focused on me and my computer instead of where the real problem is?

Has this hurt Apple iPad2 sales in 4Q 2011? There are some reports that Kindle Fire took away 1 to 2 million units of potential sales from Apple. However, Semico views this as just speculation at this point. There have been no official statements from Apple on results of this most recent quarter. The company had not made any definitive statements on sales projections for Apple iPAD2 for the quarter. In light of the fact that the tablet PC market is still relatively new and we experienced various supply chain disruptions due to earthquakes and floods, one could not expect otherwise.

Semico is currently estimating Apple iPad2 shipments to be about 15 million units in 4Q 2011. This would result in Apple shipping just over 40 million iPads in 2011. Semico projects that total tablet PCs will ship 60 million units in 2011. Thus, Apple will hold about 67% market share in 2011. In 2010 Apple held 87% share, but there was hardly any competition at the time. If Kindle Fire actual shipments are in the mid-range of the estimate (about 4.5 million) then Amazon will have carved out 7.5% market share in less than 2 months.

At the beginning of 2011, Semico noted there were about a hundred tablet PC models entering the market. We also expected to see a major shake out during the year with only a handful of competitors emerging from this huge pack. Kindle Fire was a late entry but made the biggest splash of all the iPad contenders.

Did Kindle Fire cannibalize iPad? There may have been some but Semico does not believe it was to the extent that has been speculated by others. The lowest priced iPad2 is $499 while the kindle Fire is $200. Semico believes that many of the Kindle Fire customers may not have considered iPad2 to begin with, due to the price. Reviews indicate that the iPad2 has more capabilities than the Fire – well what do you expect given the price difference?

What will 2012 bring? Since the shakeout of 2011, there will be new products but vendors will have to learn from those that fell by the wayside. Apple and Amazon offer a lot of apps and content. Price is a key factor. It has been rumored that Apple may come out with a smaller size iPad and reach a lower price point. Google will be coming out with a tablet in 2012. Will it go after Amazon? If vendors are looking to get into the corporate world security issues need to be addressed. Semico expects to see continued strong sales of tablet PCs in general with a growth rate of over 40%.

Tony Massimini
Chief Technology Officer
Semico Research Corp.
tonym@semico.com
602-997-0337 X3

There was still a lot of talk relating to the earthquake impact and recovery but overall the mood was upbeat.  On the advanced technology front, vendors are preparing for more 450mm activity.  TSV and the move to FinFET transistors are providing plenty of opportunities and challenges for equipment and material suppliers.  Add to that a host of More Than Moore innovations for the mature fabs, and the topics for discussion were abundant.

I specifically went to Semicon Japan to speak at the Used Equipment Seminar so most of my time was spent with used equipment vendors and customers.  Discussions revolved around supply and demand of used equipment, used equipment pricing and availability of parts and services.  Raj Kumar, Senior Vice President, 200mm Business Unit and General Manager, GLOBALFOUNDRIES, also presented.  He outlined the importance of More Than Moore technologies in GLOBALFOUNDRIES’ strategy.  Much of their success in the delivery of cost effective manufacturing services depends on the products and services being offered by used equipment vendors.  GLOBALFOUNDRIES has been buying used equipment from OEMs and brokers for years but more recently from IDMs and refurbishers.  But the cost of refurbished tools are not in line with other industry models.  Kumar borrowed an example from the used car market where the cost to ‘refurbish’ a used car might cost an additional 16% of the total used car value.  In contrast, the refurbishment cost of a used semiconductor tool is closer to 150% of the tool price.  Kumar suggested that stronger partnerships would help solve the price differentials.

Hiroshi Tamagawa, Manager, Rohm Production and Engineering Division has found a very effective way to utilize the Rohm capital expenditure budget through a strategic mix of used and new equipment.  Rohm maintains over 20 manufacturing facilities in Japan and Asia.  These include facilities for front end fabs, assembly, wafer products, LED, molding dies and lead frames.  Rohm’s current manufacturing capabilities cover a broad spectrum of technologies and functions.  This allows them to implement an in-house reutilization program.  A new tool might be purchased for their leading edge line. The tool that is being replaced would then be moved down to their BD-MOSLSI line.  The tool that is being replaced in the BD-MOSLSI line then moves down to the Power-LSI line and so on, all the way down to the Diode line.  Rohm labeled this strategy as efficient reutilization by relocation.   We have seen other IDMs use this strategy in the past, notably TI.

Of course, my trip to Japan would not have been complete without a visit to the Renesas Naka Factory.  Details of their recovery effort after the March earthquake and tsunami are covered in a Semico Spin posted on July 18^th, 2011.  My meeting with Takashi Aoyagi, General Manager, Renesas Naka Factory was definitely the highlight of my trip.  Aoyagi-san oversees both the 200mm and 300mm facilities at the Naka site.  The availability and quick turnaround of refurbished tools and parts were critical to the re-opening of their facilities.  A small smile appears on Aoyagi-san’s face when asked if the recovery effort stayed within budget.   Some things were more expensive than expected; however, partnerships and new procedures are now in place to prevent a similar situation.

The Naka site includes a 25 year old 200mm fab and a 10 year old 300mm fab.  Aoyagi-san knows the 25 year old facility has a lot of life left and at only 10 years old, the 300mm fab will provide more capacity and technology for many years.  During the recovery effort, Aoyagi-san was moved by the many employees who exceeded expectations in both teamwork and creativity.  The result was more effective manufacturing.   Looking toward the future, Aoyagi-san feels it’s his challenge to maintain the enthusiasm of his employees in order to continue to improve and innovate.

On the other side of the equation, used equipment vendors experienced a drop in activity this summer.  In general, used equipment vendors will report lower sales in 2011 compared to 2010.  We’ll look back on 2011 as a tough year with the earthquake and tsunami in Japan, the floods in Thailand, and the economic instability in Europe.  But Semico’s IPI points to an end to the downward cycle by Q1 2012, with improved conditions by the 2^nd half 2012.  This view is shared by many of the people that I talked to in Japan as they already begin to see increased activity and look to 2012 with optimism.

Joanne Itow

Managing Director

Recently there have been two major announcements in the MEMS (microelectromechanical system) oscillator market. Market leader SiTime breaks into high-precision OCXO timing with Stratum 3 compliant solutions; and Integrated Device Technology Inc. (IDT) jumps into the MEMS oscillator market with a piezoelectric MEMS resonator.

SiTime has introduced the SiT5301 and SiT5302, which address the highest-performance applications for timing devices. SiTime is targeting replacement of OCXO and TCXO quartz oscillators for the telecom and networking infrastructure market. The Stratum 3 oscillators have very stringent standards for frequency stability over temperature, 24-hour holdover, and 20-year stability. SiTime’s SiT530x family offers shock resistance 10 times better than quartz and 7 times better on vibration.

However, what is very notable is a reliability/MTBF rating of 500 million hours. This is 25 times higher than quartz. This is a key advantage for SiTime’s MEMS oscillator, since the target applications have long lifecycles, and customers want to reduce service calls. Another key feature is that power consumption is less than 75 mW, compared to quartz OCXO at more than 1 Watt.

SiTime will have samples in December 2011, with production in the first half of 2012.

IDT is a supplier of timing circuits, but this is its first entry into the MEMS area. The pMEMS resonator has been in development since 2007. The company claims it is the smallest hermetically sealed wafer level package (WLP) resonator. IDT also states that it is offering the first commercially available oscillators incorporating piezoelectric MEMS resonators.

IDT has demonstrated the long-term frequency stability of its pMEMS resonator. The company is also touting the extremely small size and targeting consumer, communications, and cloud computing applications. This is a technology announcement; product announcements are expected over the next few months, with full production in 2012. Currently IDT is sampling its pMEMS oscillator evaluation boards to qualified customers.

Semico Spin

The total oscillator market is about $3 billion, but MEMS has a very small penetration. For the most part, MEMS oscillator vendors have taken an opportunistic strategy by supplying their products in standard quartz packages, which allows them to be an easy drop-in replacement. The latest offerings from SiTime and IDT offer many advantages over quartz. MEMS oscillators have lower cost, lower power consumption, configurable frequency, and improved reliability and stability.

It has not been easy getting designers in established products to consider an alternative to quartz, because quartz has been around a long time. However, in addition to the standard quartz packages, both SiTime and IDT are taking advantage of the small size of MEMS and offering new innovative packages that are extremely small. This will open up opportunities for MEMS oscillators in new applications. IDT is a supplier of traditional timing circuits, including crystal oscillators. This could give the company sales opportunities with existing customers.

If you’ve read any of my previous articles, you know I’m not a big fan of cable. So my short, biased answer to the question at the top of this article is yes. The more convoluted answer is “Probably, if you’re willing to test out some hardware.”

Luckily, even though there still isn’t a “plug and play” system that fits 100 percent of our needs, the cable-free landscape is improving almost daily.

These changes in the landscape are due in part to the increased interest in mobile technology. Total OEM revenue from mobile devices is set to top $565 billion by 2015, with consumers flocking to smartphones, notebooks, and tablet PCs. The main factor in this growth is broadband access. Silicon Image Inc. expects its mobile HD technology (MHL) to be incorporated into 200 million mobile devices by the end of 2012. That’s a lot of high-definition streaming, from mobile devices to TVs.

In addition to increased access to streaming via mobile devices, content is now readily available online, though I’ve found a subscription to a DVD rental or streaming service becomes useful. Netflix, Amazon, and Hulu all charge about $8 a month for unlimited streaming. They have limited libraries, but you can supplement their content by going directly to the networks’ Websites, where recent episodes are available for free and usually within 24 hours of airing.

Not having had TV since 2007, I’ve gone through each new content distribution trend, and I am excited to see the technology getting closer to my ideal scenario month after month. More and more people are abandoning cable, and eight of the nine largest cable providers lost subscribers last quarter.

This trend is making the content providers nervous. Hulu, for example, was having a great run — new shows were posted sometimes within hours of being shown on TV. Then the networks got scared. Even though Hulu generates advertising revenue from commercials, some content providers abandoned the platform. Even Starz is pulling out of Netflix, and there is talk of waiting 60 days before releasing new DVDs for rentals.

At first glance, this seems like a step backwards, but we can’t forget that “pull” is more important than “push” in winning these technology battles. When consumers pull a technology (like mobile streaming) into the market, it has stronger staying power than when companies try to push a technology (like 3D TV).

In addition to the increased mobile access and the nearly limitless content, let’s not forget the cost savings. If you want all 200 channels, Comcast will charge you $85 a month. Then there is the DVR, which can cost up to $500 for the box in addition to a $20 monthly service fee. The total cost of a cable subscription for one year is potentially $1,760, and over the course of five years, you’re looking at saving roughly $7,000. The average person spends $720 a year on Internet service, which means you can basically get cable for half the price you’re paying now.

Our own Joanne Itow recently hooked up an old laptop to her TV. That simple first step is saving her $80 a month. Four months later, the only thing she misses is the remote control — something she’ll soon rectify when she finds the perfect Smart DTV.

So join the party, and ditch your cable.

Here at Semico we already have two employees with plug-in electric vehicles. (We only have 10 employees.)  I just recently acquired a Chevrolet Volt and our CTO, Tony Massimini, purchased a Nissan Leaf. Both cars have their unique advantages and disadvantages.

The Chevy Volt is nicely designed, well put together, with a solid feel and good crisp handling. From a performance standpoint the Volt’s electric motor is comparable to a 250HP internal combustion engine with 273 pound-feet of torque.  This rating is benchmarked at all RPMs. The single speed electric motor eliminates the transmission contributing to a simpler design.

The Chevy Volt has a 16 kW battery of which 10 kW is dedicated to the all-electric propulsion.  The remaining 6 kWs is a buffer for use during the extended range mode and for redundancy to ensure long battery life.  The battery life is rated for 100,000 miles.

One of the features that I found especially efficient is the car’s regenerative braking system.  It takes some of the energy from the moving vehicle and turns it back into electrical energy.  This energy is then stored back into the high voltage battery contributing to increased energy efficiency.  The braking system is computer controlled and blends the regenerative braking with the conventional hydraulic disk brakes.  The controller interrupts the braking request and uses regenerative braking, conventional hydraulic or a combination of both to ensure effective braking while saving energy.

The Chevy Volt can also boast an industry first.  It is the only electric vehicle with a liquid cooled battery.  The unique feature is a lithium ion battery that is immersed in a liquid coolant which maintains the battery’s temperature between 60º F and 80º F during charging as well as discharging. The Nissan Leaf has an air cooled battery which does not have the capability of maintaining the battery temperatures at optimal levels.

So far I have been able to drive 38 to 50 miles on one charge using the 10 kWs from the battery.  After the 10 kWs are consumed the electric generator kicks on to operate the vehicle.  During deceleration the battery will recharge.  Depending on driving conditions the car will switch back and forth from battery to the generator as needed.  I’ve been driving the car for about one month and so far I’ve gotten 42 miles per gallon after the first 40 electric miles.  That means the total range for the vehicle could be as high as 400 miles.  I haven’t tested the full range yet.  Since I’ve only had the car for less than a month, most trips have been well under 40 miles and I’ve rarely used the gasoline generator.

Another great feature of the Chevy Volt is the on-the-fly switchable driving mode which includes: normal, sport and mountain. The normal mode provides the most efficient use of energy and the longest range for the battery. The sport mode provides quicker acceleration and consumes the stored energy quicker. The mountain mode provides additional electricity to the motor when driving through mountainous terrain. It is recommended that drivers should utilize this option 30 minutes prior to entering the mountainous terrain.

The Nissan Leaf has a 32 kW battery with a less powerful electric motor and no onboard generator with a 98 mile electric range. Like the Chevy Volt, the Nissan Leaf is well put together, quiet and stylish.

I have read several articles warning people not to buy plug-in electric vehicles citing the large initial cost and the potential for a much higher electric bill. I always wonder who’s behind those articles.  Could they be shills for the oil companies? The increase in a monthly electric bill doesn’t even come close to the monthly cost of gas, even compared to the most efficient combustion engine vehicle.

So let’s talk dollars and cents.

The current standard electric rate in Arizona is $.105 per kilowatt hour. If a homeowner opts for a time-of-day rate, the off-peak rate is $.06 cents a kilowatt hour and there is also a super saver rate for electric vehicles of $.035 per kilowatt hour. For this analysis, let’s just use the standard per kilowatt hour and the super saver rate which is 11:00PM to 6:00AM.

My last 110 miles in the Chevy Volt consumed 24.7 kW.  Multiply that times the $.105 per kilowatt rate and the result is a total cost of only $2.59 or an electric cost of $.0235 per mile. Compare that to an internal combustion vehicle that gets 40 miles to the gallon, one would consume 2.75 gallons to drive the same 110 miles. The cost for that gasoline ($4.00/gal) would be $11.00 which is $.10 a mile. So after 50,000 miles the gasoline powered vehicle would consume $5,000.00 in gas, while the electric cost would equal $1178.86 on the standard rate and $392.95 on the super saver night rate.

While the initial price of electric vehicles is higher than a standard gasoline powered vehicle there are savings in the operational costs and most likely in the maintenance.  And of course, there’s the added benefit of knowing I’m reducing our dependence on foreign oil and making my small contribution to the environment.  It’s definitely a good feeling.  I can say that I am happy that this technology remained in the US and did not end up in China. After driving the Chevy Volt for a month, I believe the Federal government made the right decision to give GM a loan which they are paying back with interest. GM has reinvented itself and is producing state-of-the-art technology vehicles like the Volt and the best-selling compact car, the Cruze.

Jim Feldhan

President