By John Blyler, JB Systems
Both soft (hardware) and software IP should dominate in the IoT market. But for which segments will that growth occur? See what the experts from IPExtreme, Atmel, GarySmithEDA, Semico Research and Jama Software are thinking.
The Internet-of-Things will significantly increase the diversity and amount of semiconductor IP. But what will be the specific trends among the hardware and software IP communities? Experts from both domains shared there perceptions including, Warren Savage, President and CEO of IPExtreme; Patrick Sullivan, VP of Marketing, MCU Business Unit for Atmel; Gary Smith, Founder and Chief Analyst for Gary Smith EDA; Richard Wawrzyniak, Senior Market Analyst for ASIC & SoC at Semico Research, and; Eric Nguyen, Director of Business Intelligence at Jama Software. What follows is a portion of their responses. — JB
Blyler: Do you expect an accelerated growth of both hardware and software IP (maybe subsystem IP) due to the growth of the IoT? What are the growth trends for electronic hardware and software IP?
Savage: I don’t think that there is anything special about the Internet-of-Things (IoT) from an intellectual property (IP) perspective. The prospect of IoT simply means there is going to be a lot more silicon in the world as we start attaching networking to things that previously were not connected. As a natural evolution of the semiconductor market, hardware and software IP is going to keep growing and will outpace everything else for the foreseeable future. Subsystems are a natural artifact of that maturing as well as customers wanting to do more and more with less people, outsourcing whole functions of chips to be delivered from their IP supplier who is likely an expert in that subject matter.
Sullivan: The largest growth will be in software IP for hardware IPs that already exists in order to connect devices to the Internet. Developers that are not familiar with wireless applications will find themselves making connected devices, and for suppliers to have context aware stacks and other IP tailored for the different IoT usage models will be crucial. i.e.; just having a ZigBee stack is not sufficient. You need a version for healthcare, a version for lighting, and so on.
Security is also going to be an important factor for both securing communication between IoT devices and the cloud (SSL/TLS technologies), and also to authenticate that firmware images running on connected devices have not been tampered with. Addressing these needs may require additional software development of IoT devices, and potentially specialized hardware components as well.
On the hardware side, the main focus will continue to be power consumption reduction as well as range and quality improvements.
Smith: Yes, growth in hardware and software IP will increase with the IoT expansion. However, the IoT market comprise multiple segments. To get accurate growth figures you would need to explore them all (see Table).
Wawrzyniak: I do expect some acceleration of revenues derived from IP going into IoT applications. At this point it is hard to determine just how much acceleration there will be since we are just at the very beginning of this trend. It also will depend upon which types of IP are chosen as the ones most favored by SoC designers. For example, if designers select of one of the wireless IP types as the preeminent solution, then this might be more expensive (generate more IP revenue over time) than say ZigBee.
Given the sheer volume of IoT applications and silicon being projected, it is possible that once a specific process geometry is decided on as the optimum type to use, the IP characterized for that geometry might actually be less expensive than the same IP at another geometry. Volume will drive cost in this case. All these factors will go into figuring out how much additional IP revenue will be generated. I would say a safe estimate today would be on the order of 10%.Wawrzyniak: I do expect some acceleration of revenues derived from IP going into IoT applications. At this point it is hard to determine just how much acceleration there will be since we are just at the very beginning of this trend. It also will depend upon which types of IP are chosen as the ones most favored by SoC designers. For example, if designers select of one of the wireless IP types as the preeminent solution, then this might be more expensive (generate more IP revenue over time) than say ZigBee.
I also think it’s likely that IP Subsystems will be created for IoT applications. Again, this depends on how complex the silicon solution will need to be. If we are talking lightbulbs, then it is hard to imagine that an IP Subsystem will be needed. On the other hand, a relatively complex chip might require an IP subsystem, e.g., a Sensor Fusion Hub subsystem. Sensors will certainly be everywhere in the IoT, so why not create a subsystem that deals with this part of the solution and ties it all together from the designer
Hard IP will probably be more expensive than Soft IP. I would say that Soft IP will be used more in these types of SoCs. I would estimate that it could be as high as a 70 – 30 split in favor of Soft IP.
Nguyen: Absolutely, the growth of IoT will not only open new markets such as wearable technologies and home automation but will also cause disruption in existing due to software based services being delivered through connected devices. Technology products are evolving from electro-mechanical based IP competitive differentiation to customer experience differentiation powered by software applications running on optimized hardware.
The trends in hardware and software IP are accelerating the rate of innovation for customer facing products, which in turn will have a direct impact throughout the supply chain. Software producers must mange the interdependencies not only across their product lines but also across the various technologies they’ll be deployed on (i.e. iOS, Android, Web, integrated into 3rd party technology) or various subsystems. The connected aspect of these technologies allows vendors to continually update the offerings and therefore evolve the customer experience throughout the life of the physical technology.
The performance demands of continuously evolving software heavy products is also driving accelerated innovations throughout the supply chain, specifically hardware components such as Systems on Chip, Systems in a Package, sensor technology, and battery/power management.
Final product producers are also accelerating release cycles and therefore driving the need to more easily integrate sub-components. This demand is driving the demand for Systems in a Package (SiP) technologies, which incorporate the chips, drivers, and software within a physical sub-component package that can easily integrated into the overall system. Semiconductor companies must now coordinate the growing complexity of silicon, software, and documentation development while accelerating their ability to incorporate market feedback into product roadmaps, R&D, and ultimate manufacturing and delivery to customers; all the while ensuring they can meet per unit cost targets.
Blyler: Thank you.