Semicon industry at inflection point of innovation: Rich Beyer

August 24, 2011

Rich Beyer, chairman and CEO, Freescale Semiconductor, at the Freescale Technology Forum 2011, in Bangalore, India.

Rich Beyer, chairman and CEO, Freescale Semiconductor.

Rich Beyer, chairman and CEO, Freescale Semiconductor.

Prior to this year’s FTF, Freescale marked another milestone in our company’s history. We have returned to the public trading arena with our IPO on May 26.  We used the proceeds from the IPO to pay down a portion of our debt and reduce our interest expense. This will enable Freescale to continue to grow our investments in products, software, sales and customer support. We are confident, as a result, we will continue to offer you even better world class solutions.

Having publicly traded stock will also give us more flexibility than just available cash to fund potential acquisitions and future innovation investments that will reinforce our competitive differentiation moving forward. And, the IPO is a strong affirmation that Freescale is on a very successful trajectory in the eyes of the investment community! While we have changed to become a publicly traded company, we have not changed our vision or our strategic focus. Our vision remains the same: we are committed to being the leader in embedded processing solutions.

We will continue to build on our market leadership positions by focusing on our core strengths: embedded processors, applications processors, microcontrollers and DSPs; RF, analog and sensors; and the software that delivers a clear competitive advantage to our customers.

Era of connected intelligence
Over the past several years, we have entered the era of connected intelligence where embedded processing is driving the Internet of Things. In the PC era of the past, processing was centralized within a traditional computing environment. Users relied heavily on computing hardware and rigid software to perform desired tasks.

In today’s era of connected intelligence, data is ubiquitous, and we expect our electronic devices to conform to us. We want them to be social and mobile. They are aware of our surroundings, and they understand and adapt to the context in which we are using them. They are always on and they are always with us.

Semiconductor innovation
We are at an inflection point in what is driving semiconductor innovation. In the PC era, the focus was on the sheer performance of the processor. The power consumption implications were handled by a building bigger box, adding a cooling fan or using a larger battery.

In the era of Connected Intelligence, embedded processing performance needs to be balanced with power efficiency, and system capability is enabled by the intelligent integration of sensor, RF and analog interfaces and the usage of efficient, system sparing software.

The insatiable demand for connectivity will continue to push the industry for solutions that deliver more performance, improved efficiency and lower operating costs. Semiconductor innovation now is being driven by embedded processing solutions with a system-level view and developed with an application-level expertise that is critical to efficient and timely implementation.

Trends in era of connected intelligence
We want to examine some of the key trends in the Era of Connected Intelligence and explore some of the issues that are impacting our industry and affecting our lives.

Smart mobile: We want to take a look at the implications of the dramatic expansion of connected smart mobile devices.

Networking: And the insatiable appetite for network bandwidth to support a new generation of data-intensive multimedia applications.

Automotive: We’ll look at how the automotive industry is using semiconductor innovation to achieve zero emissions and zero fatalities – and how embedded processing solutions are helping lead the way.

Smart energy: Distributed intelligence and connectivity are creating smart energy solutions for our homes, businesses and factories.

Medical: And, for the next generation of telehealth applications, mobility and connectivity are just what the doctor ordered.

Smart mobile device segment
Electronics have become an integral part of our lives. Thanks to embedded processing, we have cut the cord to the desktop, and we have unleashed our imagination. We have a new generation of Smart, Mobile, Connected devices that are enabling the explosive growth of social media and communication on an unprecedented scale.

Smart mobile device growth
By 2015, there will be more than 10 billion smart mobile devices connected to the Internet. That’s more than one device for every person on the planet! In 10 years, half of the world’s population will access the Internet only on a mobile device.

Multimedia tablets
Within five years, a new generation of multimedia tablets will out ship traditional PCs. Optimized for content consumption, these devices will enable users to access personal content virtually anywhere.

HCL tablet: India is playing an important role in this evolution. HCL Technologies has created its ME AM7 tablet that utilizes our i.MX51 applications processor integrated with our advanced power management IC and MEMS sensor to deliver a mobile multimedia computing experience.

New generation tablets: The next generation of super tablets will incorporate high-resolution displays and enable a wealth of tablet-optimized applications and services for augmented reality, environment sensing, mapping and gaming features.

Mobile processor criteria:  A new breed of mobile processors will be required to deliver improved performance with lower power consumption, and we will need mobile operating system compatibility, design scalability and lower overall system cost.

Next-generation networking challenges
The explosive growth in smart mobile devices is creating a challenge for network infrastructure. As the wireless communications infrastructure evolves from 2G to 3G to LTE, service providers face the challenges of equipment redundancy and increased power consumption and operating expenses.

Evolution of cellular network
Our new QorIQ Qonverge processors combine multicore DSP and communication processors to deliver a ‘basestation on a chip’ solution that dramatically reduces the form factor size but also delivers a multimode solution that supports multiple standards.

Network traffic growth
As multimedia-based services continue to tax network enterprise infrastructure, Moore’s Law can’t keep up with the processing demands of the increasing IP traffic. Requirements for application acceleration, security and quality of service are pushing the performance envelope, all within constrained power consumption budgets.

Multicore processors have emerged as the most viable approach to increase performance while minimizing power consumption, and Freescale is leading the way.

Tejas Networks, a market leader in the highly competitive Indian telecom market, was one of the first companies to selected our QorIQ P2020 multicore communications processor for networking applications. This year, it was the first company in India to select our 64-bit P5020 multicore processor for their next-generation telecom products.

QorIQ AMP series
Two months ago, Freescale announced our new QorIQ Advanced Multi-Processing series, or AMP series of multicore communications processors to meet the challenges of next-generation networking systems.

Built on 28nm technology using our new 64-bit Power Architecture core, these devices will deliver 4X the performance at half the power consumption of our current, industry-leading communications processors. We expect to be sampling these devices in the first quarter of next year.

Portfolio scalability
Our QorIQ portfolio offers unbound scalability with code compatibility across all our communications processors. This allows our customers to migrate up or down the portfolio to select the processor that delivers the optimal performance while preserving software IP investments.

As the global leader in communications processors, Freescale is committed to providing the networking solutions that will help accelerate the evolution of this exciting market segment.

Automotive segment
The automobile has become the ultimate smart mobile device. Freescale has been a leader in automotive technology since we provided the processor that powered the industry’s first fuel injection system back in the early 1980s.

Vehicles today have become as much an electrical machine as a mechanical one, driven in particular by the energy savings that electrification of many functions in the car is providing. With the dramatic growth in automotive electronics, the challenge is to deliver innovative products that have zero defects, and to deliver the technology that enables energy-efficient green vehicles and advanced safety systems that protect the lives of the occupants.

Automotive emerging markets
With a growing middle class fueling economic advancements in emerging markets, the demand for automotive mobility is increasing significantly in developing countries. For many first time buyers in these markets, value oriented models with minimal safety and convenience features have been the only option for vehicle ownership.

Unfortunately, the lack of advanced safety features has resulted in an increase of vehicle-related fatalities. Of the 1.2 million annual global vehicle-related deaths, 50 percent of those casualties occurred in developing countries. New safety legislation in emerging markets like India and China, have created mandates for safety appliances like airbag solutions.

Automotive airbag reference platform
Today at FTF India, Freescale is announcing a partnership with Bosch to leverage our system expertise and global leadership positions to introduce a cost-effective and ready-to-use airbag reference platform for the automotive safety segment in developing markets.

Through our collaboration, we enable local suppliers to adopt an affordable airbag safety solution that reduces design risk, is easy to implement and represents the highest automotive quality standards. In the race to deliver new products with new technologies at an affordable cost, it is the consumer that ultimately wins.

Indian automotive market/Tata Motors vehicle: Auto makers in India are increasing their investments on technology to enhance the consumer experience and achieve competitive differentiation. Some of the innovation driving this trend has been done by Tata Motors Electronics Division.

Industrial segment
Energy management issues are becoming primary considerations in virtually every purchase decision, and increasing energy efficiency in everything we create is one of the primary challenges of the engineering community.

Electric motors consume about 45 percent of the world’s electrical energy, and by utilizing more efficient motors, we could cut up to 25 percent of the global electricity used by motors.

Electric motor
To help in this effort, Freescale announced our new generation of high-performance digital signal controllers to provide precise digital control for electrical motors and power supplies.

Our new digital signal controllers provide the fastest signal processing in the microcontroller industry with a 32-bit core and on-chip peripherals to provide a smarter way to manage energy use.

Network servers
The era of connectivity will increase the demand for more networking data centers. Data centers are now consuming about 2 percent of the global electricity supply, and it is projected that data center power use will double by 2015. About half of that energy is used for cooling.

Data center power supplies using our new digital signal controllers will generate less heat and require less energy for cooling and help reduce circuit board design and overall system size.

Smart grid
The global deployment of smart grid technologies could deliver up to $2 trillion in benefits over the next 20 years. The smart grid will enhance efficiency by reducing the information gap between utilities and consumers by using advanced metering infrastructure and data management technologies.

Smart home/smart appliances
Freescale is working with leaders in the industry to deliver smart meter and home energy management systems that will enable consumers to conserve energy. We also have strategic partnerships with leading manufacturers to help develop smart and connected appliances. Freescale is the world’s leading supplier of microcontrollers for appliances.

A new Energy Star qualified washing machine typically has two to three MCUs inside, and over life of the appliance, the water savings could fill three backyard swimming pools and the savings in energy could pay for the matching dryer. From the smart grid to the smart home with smart appliances, Freescale is developing the technologies that will deliver energy-efficient innovations.

Medical segment
Economic development and urbanization has shifted the focus of the public health agenda toward chronic diseases like hypertension, cardiac failure, diabetes and cancer. To address this growing challenge, the medical industry is shifting from high-cost treatment approaches to a more preventative discipline.

Freescale believes that semiconductor technology will play a critical role in the new technologies that assist with the medical monitoring of patients, diagnostics, therapy and imaging.

Medical/smart mobile/auto infotainment montage
In the era of connected intelligence, smart medical devices will converge with our smart mobile devices as they share the requirements of small, portable, easy to use and connected. Smart sensors will assist in the diagnosis and care. Even our automotive customers have plans to integrate health applications into their driver information systems.

At Freescale, we take great pride in making the semiconductor products that make the world a smarter place. However, it is really special when we get to help deliver the medical technologies that dramatically improve our quality of life, and hopefully help save lives.

This morning, we are fortunate to have a unique speaker that will discuss the future of medical electronics that goes beyond the human-machine interface and examines the potential of human-machine integration.

The Freescale Technology Forum is all about Powering Innovation. We want to help you Make It Connected. We want to help you Make It Healthy. We want to help you Make It Safe. We want to help you Make it More Efficient. We want to help you Make It Smarter.

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