SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

russianharmoniousElectronics - Devices

Nov 2, 2013 (4 years and 1 month ago)

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SPANSION:

MICROCONTROLLER

BUSINESS ASSESSMENT



WHITE PAPER


AUGUST 2013



Dr. Handel Jones

Founder and CEO, IBS
, Inc.

Los Gatos, California



International Business Strategies,
Inc.

632 Industrial Way


Los Gatos, CA

95030

USA

Phone (408)

395
-
9585


Fax (408)

395
-
5389

www.ibs
-
inc.net info@ibs
-
inc.net


SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

INTERNATIONAL BUSINESS STRATEGIES, INC.

2

Table of Contents

Overview

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................................
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................................
.......
3

Market Drivers for Microcontrollers

................................
................................
...............................
4

1.

Increased Adoption of ARM Cores

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................................
..................
4

2.

Benefits from Migration to Smaller Feature Dimensions

................................
..................
5

Conclusion

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................................
....
9

Biography

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................................
................................
................................
...

10


SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

INTERNATIONAL BUSINESS STRATEGIES, INC.

3

Overview

Embedded
ARM
controllers are a high
-
growth segment of the
semiconductor market

with

the
CA
GR of the 32
-
bit market with embedded ARM cores from 2010 through 2017
at
10.9
%.

The rapid ramp
-
up of designs with embedded ARM cores is occurring because customers
require flexibility and
do not want to be locked into
proprietary

controller architecture
s
.

Most of
the legacy microcontroller companies, however, are spending large resources on protecting
their existing revenue streams rather than on focusing their resources on
expanding into
new
ARM
-
based
offerings
.

ARM
’s

size and depth of
third
-
party embedd
ed software and support
ing

IP infrastructure allows
a wide range of applications to be supported

and makes the ARM architecture an important
competitive capability
.

A perspective on the ARM
-
based microcontroller market is shown in the
following figure.


FIGURE 1: ARM
-
based 32
-
bit Microcontroller Market

Embedded nonvolatile memory is the most
important IP for ARM architecture
s,

according to
inputs from a number of
large

users of embedded controllers.
The market for embedded ARM
cores with the embedded nonv
olatile memory is global, but with many design activities
SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

INTERNATIONAL BUSINESS STRATEGIES, INC.

4

increasing
in the U.S. for new concepts. The building of a global footprint of design wins has the
potential to provide high revenue growth
and

profits for Spansion.

The embedded controller product
s and technologies acquired from Fujitsu combined with the
expertise of Spansion in embedded nonvolatile technologies places Spansion in a strong
competitive advantage.

Spansion embedded Charge Trap Technology (eCT) delivers leadership
performance and cost

for Microcontroller and system
-
on
-
chip products.
The
embedded Charge
Trap (eCT) technologies of Spansion deliver a small cell area, fast access times and high
reliability.
By accelerating the current MCU roadmap to 40nm with eCT, Spansion can deliver
very

competitive

m
icrocontroller products by delivering leading edge performance and cost to
a
broad range of customers for automotive, industrial and consumer applications.

Market Drivers for Microcontrollers

The key market drivers for the
microcontroller mar
ket

are the following
:

1.

Increased
Adoption of ARM
C
ores

ARM cores
, which

includ
e

Cortex
-
M,
Cortex
-
R
,
Cortex
-
A, and SecurCore

product families, are
experiencing strong growth in microcontroller applications and increased adoption with the
reduction in feature dimensions to 65nm, 40nm and 28nm.
The value of embedded nonvolatile
IP increases with the reduction in feature dimension
s to 40nm and 28nm.

T
he
increasing

use of ARM cores are
due to
the use of high
-
level programming tools and the
ability of customers to
take advantage

of the ARM software ecosystem.

The 32
-
bit ARM cores

are surpassing the

high
-
end 8
-
bit and 16
-
bit markets
because of the faster time
-
to
-
market
benefits

and ability to provide more system value
.


ARM
cores will dominate many higher
-
value
embedded microcontroller
applications
, and a key
requirement is to have close technical and business relationships with key c
ustomer targets
.

SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

INTERNATIONAL BUSINESS STRATEGIES, INC.

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2.

Benefits from
Migration to S
maller
F
eature
D
imensions

The migration to smaller feature dimensions such as 65nm and 40nm provides smaller chip
area, lower cost, and lower power compared to older technologies such as 130nm, 180nm, and
250
nm.

An additional benefit to the migration to smaller feature dimensions is
the

ability to
integrate a wide range of supporting IP,
including
relatively large blocks of
embedded
nonvolatile memories.

The support of a wide range of IP allows

application
solutions
to be
provided

for strategic end
markets, which enable

more system value and higher prices to be obtained than from selling
discrete products.

A customer survey we
conducted
in
2013

revealed

that

embedded nonvolatile IP is the most
important

cor
e.

A summary of this survey
is

shown in the following figure.


FIGURE 2
:
Relative Importance of IP for Support of Embedded ARM Cores

Spansion
is well positioned to take advantage of these trends with its embedded Charge Trap
technology and recent
acquisition of Fujitsu’s analog and microcontroller products.

Spansion
eCT is designed to provide fast access, low power and a cost effective solution for System
-
on
-
SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

INTERNATIONAL BUSINESS STRATEGIES, INC.

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Chip (SoC) products that require monolithically integrated Flash memory and high
-
performanc
e
logic.

The acquisition of the Microcontroller business of
Fujitsu

gives Spansion
access to the design
expertise for embedded ARM
-
based cores,
which is complementary to Spansion’s embedded
nonvolatile technologies.

The combination of
design

expertise for ARM cores with leadership nonvolatile memory

is
the
key capability that supports the migration to smaller feature dimensions
,
with

the ability to build
strong position
s

in
selected segments of
the microcontroller market.

To date, t
he market

potential for embedded microcontroller designs is limited by the difficulties
that legacy microcontroller vendors are experiencing in
scaling embedded nonvolatile memories

below 65nm
.

The Spansion eCT
te
chnology can result in
expanding

the
size of
the emb
edded microcontroller
market

as well as the ability of
Spansion
to increase market share rapidly
.

C
hanges in the dynamics of the microcontroller business allows a company
, such as Spansion,

that has access to key technologies
and a global customer base
to
increase market share
rapidly and also to build the competitive barriers that can
generate
good financial returns.

The market for microcontrollers is large, and the key requirement is to use embedded
nonvolatile technologies, to allow the generation of hi
gh market share as well as select market
segments where defensible competitive barriers are established so that profits can be high.

K
ey issues for
microcontroller
applications include the following:



Automotive represents approximately 4
1.1
% of the
stand
-
alone or legacy microcontroller
market

in 2012 and will be 37.7% in 2020. Automotive
has been the key driver for the
development of many microcontroller architectures in the past
.

There are many different applications within automotive, including
bod
y control
, engine
control, airbag systems,
infotainment,
and others.

Safety

technologies
, including anti
-
SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

INTERNATIONAL BUSINESS STRATEGIES, INC.

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collision,
are based on embedded ARM cores
and represent a

growing segment of
automotive

applications
.
Automotive will continue to be a
large

market se
gment for stand
-
alone microcontrollers
as well as
be a driver for
new
embedded microcontroller products

that
require
high reliability
.

Design time in automotive applications can be long, but product lifetimes are also long.




Industrial is a large user of b
oth stand
-
alone as well as embedded microcontrollers.
Examples of microcontroller use include motor control, process control, environmental
control,
smart meter,
etc.

Energy efficiency is a key driver within a number of industrial
applications.

I
ndustrial

applications
have

a

long life, with the ability to obtain price premiums.


The industrial market is stable, with stron
g emphasis being placed on high
-
reliability
embedded nonvolatile applications.



Communications applications include smart phones,
communications infrastructures, and
other client platforms. A wide range of communications terminal
s

such as those used by
FedEx

and other logistics companies use

embedded microcontrollers

along with embedded
nonvolatile memories
.

Surveillance and security

that
are within communications applications

are also
experiencing growth
.



Consumer applications are segmented into
low end and high end.
Microcontrollers used
in
the low end
are characterized by very low prices and low profits
.


In
high
-
end applications s
uch as
for
appliances
, customers often
consider long
-
term
reliability more important than
the
low
est

prices.

H
igh
-
end consumer

applications
also
include

set
-
top

box, hig
h
-
end digital televisions, high
-
fidelity audio, etc.

These applications
can also allow
the ability to generate good financial returns.

SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

INTERNATIONAL BUSINESS STRATEGIES, INC.

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Consumer medical
applications
suc
h

as precision weigh
ing

scales

and

monitors for
exercise machines have relatively high volume and steady growth.

Intelligent battery
charging and discharging controls represen
t high
-
volume and high
-
growth applications.



Other
s

includes tens of thousands of applications
,

and
while many are low volume, those
that are
higher volume

include

si
gn
a
g
e,

smart cards, identification, instrumentat
ion, power
tools, and other end
-
market segments.



Video, image
and
audio processing
,
voice recognition
, etc
.
,

are examples of capabilities
that use controller functionality along with accelerators

that span multiple application
segments
.
Motor control is another generic capability that i
s used in tens of thousands of
applications
, but with
some applications consuming
tens of millions of
motors
per year
.

The microcontroller market is split
among
vertical applications that require access to specialty IP
and those that use generic building b
locks such as motor control, video processing and other
algorithms.

Embedded nonvolatile technologies are key enabling capabilities for both of the vertical
-

and
horizontal
-
based markets.

There are many end
-
market opportunities for microcontrollers, and while there are many
established competitors, the migration to
embedding
ARM rather than
proprietary
cores
,

is
providing
a range of new
opportunities

for new participants that have some form of competitive
adv
antages.


The analysis of the competitive environment shows that no single microcontroller vendor
dominates key
high
-
growth
segments

of the market
. Also, there are significant weaknesses
for
embedded nonvolatile memories within
a number of
microcontroller
companies as feature
dimensions are reduced

to 40nm and 28nm
.
The technology strengths of Spansion

and

its
embedded Charge Trap (eCT) technologies can provide a sustainable competitive advantage.


T
he
emphasis
of a number of legacy microcontroller vendors is on
the protection of
revenue
streams from their existing
microcontroller architectures
rather than on high
-
growth ARM
SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

INTERNATIONAL BUSINESS STRATEGIES, INC.

9

opportunities.
This is done because the expertise is in supporting existing customers rat
her than
on optimizing the revenues that can be obtained from
other areas in
the market.


A characteristic of the semiconductor industry is that new entrants can take away market share
rapidly from companies that are protecting the capabilities that allowe
d good financial success
to be generated in the past.

Conclusion

There is relatively high growth for 32
-
bit architectures
as well as
for
the
products
that have
embedded ARM
cores

through the 2020 time frame.

There will be
a
continuing
decline in the 8
-
bit
and 16
-
bit product revenues

because of inefficiencies in utilizing enhancements in
technologies
.
ARM cores include

the Cortex
-
M series, Cortex
-
R series, Cortex
-
A series, and
SecurCore series.

While many companies have access to ARM cores
, and the ARM
-
base
d designs are
experiencing revenue growth
, competitive advantages can be gained by providing access to
specialty IP
, with embedded nonvolatile memories being the most important IP for many
end
users
.

The comb
ined capabilities of
Fujitsu

and Spansion are
, h
owever, highly synergistic, with the
Spansion embedded nonvolatile technology providing a major competitive strength

along with
the controller cores and mixed
-
signal interfaces of Fujitsu
.

T
he synergy that can be obtained from the embedded nonvolatile tech
nology of Spansion and
the engineering and product expertise obtained from the
Fujitsu

acquisition

can provide the
ability to address applications that have
solid

growth opportunities, including
smart energy, white
goods, motor control, and other applications.

The market of 32
-
bit microcontrollers, which include the combination of stand
-
alone and
embedded

microcontrollers,

will be $4
3.5
B

in 2020. A 5
% market share will be $
2
.
2
B, which is a
realis
tic target.
While revenue growth can be high, there can also be the ability to generate high
profits which can be obtained from focusing on the high reliability and higher performance
segments of the market.

SPANSION: MICROCONTROLLER BUSINESS ASSESSMENT

INTERNATIONAL BUSINESS STRATEGIES, INC.

10

Biography

Handel Jones is the founder and CEO of

International Business Strategies, Inc. (IBS), which is
based in Los Gatos (California) and has been in business for 24 years. IBS is active in analyzing
advanced technology development in a range of end
-
market segments, including industrial,
automotive,
communications, and others.

IBS is also active in analyzing competitors within multiple market segments and in determining
the factors that provide good success. There is emphasis on a range of semiconductor products
with global coverage of the markets an
d participants.

The company
provides support to many global technology leaders in key areas of
semiconductor technologies, markets, and business strategies.


IBS publishes monthly reports as p
a
rt of its
Global System IC Industry Service
, which is in its
22
nd
year
.

Handel

is also the author of
Chinamerica
, which was published by McGraw
-
Hill and
provides insight into the drivers for the economies of the U.S. and China.