semiconductor outlook: embedded intelligence from the ......• view technology as differentiation...
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Semiconductor Outlook:Embedded Intelligence From the Cloud to the Edge
Silicon suppliers must reinvent business model to realize the new wave of growth
Mario Morales
Program VP | Enabling Tech & Semiconductors | IDC
Agenda
Key takeaways
ICT and OT Market Context: Systems to Silicon Size
How large are the volumes at the edge? Why does it matter?
Industrial and Automotive: What problems should technology
suppliers focus on to capitalize on these two growth sectors?
Semiconductor revenue growth over the next 5 years
How must semi suppliers and OEMs identify the right markets
and ecosystem requirements to unlock value beyond silicon and
HW?
2
Deep Intimacy with
customers and partners
essential for scale
1
1 out of 4 devices
connected
(only 13% for OT
segments)
2
Most computation and
data reside at the edge-
need for edge business
strategy
3
Moore’s law and new
architectures drive
computer vision and
machine learning
4
Key Takeaways
3
IoT Semiconductor market is
less than $1 billion today
ICT and OT Market Context, 2015
ICT
Auto
OT$3.4 T
$2.0 T
$0.9T
Source: IDC Black Book, IDC Enabling
Technologies, Cap IQ, Company financial
reports, 2016
Semi Industry Revenue Growth Shifts from IT to OT
OT19%
IT81%
2015
OT27%
IT73%
2020 2015-2020
5-Year CAGR
OT: 7.6%
IT: -2.5%
Total Market: 1.5%
Source: IDC Semiconductor Application Forecaster, June 2016
IT: Computing, Consumer (except Other Consumer), Communications
OT: Automotive, Other Consumer, Industrial & Military Aero
$97.5 Billion OT Semiconductor Market by 2020
Source: Semiconductor Application Forecaster, IDC, June 2016
(1) Industrial includes Retail, Energy, Medical, LED Lighting, Military, Aero
Semiconductor Revenue by Key Market Segments, 2015-2020
6
2015-2020 CAGR
$40.7 $40.5
$33.5 $31.5
$21.7$19.1
$9.3 $9.5
2015 2020
$105.2$100.5
-0.9%2015-2020 CAGR
$3.5 $3.0
$30.8$25.1
$38.2$40.5
$20.9 $21.4
2015 2020
$93.3$90.0
-0.7%
$3.5 $4.5$8.4 $6.5
$19.4 $22.1
$14.9 $25.0
2015 2020
$46.2
$58.1
4.7%2015-2020 CAGR
$5.5 $9.0$0.8 $1.0$9.2$12.6
$13.8
$20.3
2015 2020
$29.3
$43.0
2015-2020 CAGR
8.0%
$4.9 $6.1$2.3 $1.8
$7.7 $7.8
$17.1 $21.6
2015 2020
$32.0$37.3
2015-2020 CAGR
3.1%2015-2020 CAGR
$2.1 $2.4$7.4 $4.5
$15.0 $16.6
$6.2 $6.8
2015 2020
$30.7 $30.4
-0.2%
MPU / MCU / DSP Memory Application Specific Other
Local Gateway
Wired
Local Gateway
Wired Ethernet, Cellular,
Whitespace, RF, Powerline
Big Data
Access Management
IoT ManagementCore Network IoT CommunicationGateway
Data Routing and Analysis
Identity & Access Governance
RDBMS NoSQL
Enterprise Service Bus &
BI
Edge Gateway Cloud/Data CenterNetworking
From the Edge to the Cloud: Where Does The Intelligence
Reside?
7
Primarily IoT/ Some
Intelligent SystemsPrimarily Intelligent
Systems
Edge Sensors
*95%
* % of 2016 System Volumes
1%
3%
<1%
Industrial and Automotive Sectors-What problems
should technology suppliers be looking to solve?
Uptime, cost, and asset life fundamental requirements
Large installed base
High level of service
Supply chain critical to margin sustainability for ecosystem
Computer vision, cloud-based analytics, and AI investment in need of guidance
Electrification, increasing energy demand
Autonomous-safety, regulation, compute
What’s next? Computer vision and machine
learning, make autonomous systems a reality
Computing and sensors link the physical and digital world-just at the start of the journey
Systems will begin to learn and drive natural user interfaces like our mobile and CE devices do today• natural language processing
• Image recognition, videos evolving to do the same
Ubiquitous connectivity with ultra low latency will be essential (5G)
Still a long journey toward intelligence and AI• Extending intelligence from the Cloud to personal mobile devices,
wearables, and into our home (Echo, Google Home) is just beginning it will take time in OT environment
Computer Vision Key Area for Silicon Over The
Next Five Years
Video Surveillance
Ship 98 CAGR 18%
MPU 100% MCU 0%
ADAS
Ship 196 CAGR 25%
MPU 58% MCU 42%
Industrial Robots
Ship <1 CAGR 9%
MPU 30% MCU 70%
Retail/Kiosk
Ship 6 CAGR 12%
MPU 99% MCU 1%
Smart Home Security
Ship 1,527 CAGR 13%
MPU 8% MCU 92%
Drone
Ship 83 CAGR 54%
MPU 100% MCU 0%
Sensor/System 7
Wearables
Ship 242 CAGR 26%
MPU 71% MCU 29%Industrial Automation
Ship 49 CAGR 3%
MPU 93% MCU 6%
Gaming
Ship 43 CAGR 0%
MPU 100% MCU 0%
Medical Imaging
Ship 2 CAGR 7%
MPU 96% MCU 4%
Smart Building
Ship 8 CAGR 5%
MPU 34% MCU 66%
Sensor/System 35
Note: 2020 Systems shipments are in millions of units, CAGR is for 2015-20 systems shipments.
MPU and MCU as share of governing intelligence for systems.
Note: Data from June 2016 IDC Enabling Tech Embedded & Intelligent Systems Market Model
Autonomous Driving Requiring Technology,
Compliance, and Deep Ecosystem Partnerships
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Ultrasonic
Short/Medium-range Radar
Camera
LIDAR
Long-Range Radar
Ecosystem Partnerships Necessary for Market
Development
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OEM and New Entrants
• OEMS challenged to stay ahead of new
entrants
• View technology as differentiation
• Change in development model
Tier Ones & Tech Suppliers
• Value add being challenged
• Rapid decrease in technology cost
• New technologies and business models
Semiconductor Companies
• Large players consolidating
• New entrants have good traction, but will
need scale to remain sustainable
12
Automotive Semiconductor Growth – Three Drivers
Electrification
• Lowering greenhouse emissions
• Enabling transportation paradigm shifts (car services)
• Lower operating costs
Infotainment and connectivity
• Connected Life extension
• Diagnostics / OTA Updates
• Generational expectation
Advanced Driver Assist
• Safety requirements / Governmental mandates
• Brand Differentiation
• Road to autonomy2005 2010 2015 2020
Automotive Semiconductors
Source: IDC Semiconductor Application Forecaster, June 2016
$43 Billion Semiconductor market by 2020
Suppliers Target Auto and OT Growth Areas, More
Consolidation Expected
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
-5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%
Mobile phones
PCs
Servers
AutomotiveIndustrial
Other Consumer
(wearables, smart home)Game Consoles Tablets
Digital TV
Set-Top Boxes
2015-2020 CAGR
Perc
enta
ge o
f S
em
iconducto
r M
ark
et
Size of bubble indicates 2015 revenue
Source: IDC WW Semiconductor Application Forecaster, June 2016
Fastest Growing Semi Suppliers-What Should
Taiwan Do?
0% 50% 100% 150%
Silicon Motion
IDT
Cavium
Sigma Designs, Inc.
Apple
Mellanox
SkyWorks
InvenSense
HiSilicon
Avago
RobertBosch GmbH
Sequans
Ambarella Inc.
Cirrus Logic
Mobileye
Synaptics
Qorvo
Cypress
MaxLinear, Inc.
Focal Tech
Top 20 Fastest Growing Semiconductor Companies- 2014-2015 (Revenue
Growth)
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Half of the semiconductor companies on this list are
focused on intelligent systems and computer vision,
smart home, wearables, autonomous systems
MCU and leading CPU companies have launched
go-to-market strategies targeting OT and Auto
OEMs and ecosystem
Contractor manufacturers and ODMs pivoting to
support new opportunities in OT and Auto
Taiwan Ecosystem needs to move from a
fast follower strategy to an enabler and
leader in the faster growing segments of
the market
Note: Data from 2016 IDC Semiconductor Application Forecaster
Contact Information
16
Mario Morales
+1 650.350.6498
M Morales