Executive Editor
The Internet of Things has certainly garnered considerable attention. You may consider it more hype than reality, but it certainly has caught the attention of key companies hoping to provide products ranging from connected sensors to data-center processors—as well as the relevant test equipment. The special report beginning on page 14 of this issue describes initiatives being undertaken by test companies to handle an estimated 6.58 connected devices per person that are expected by 2020. These companies are offering systems addressing the gamut from RF communications to current-drain characterization as well as the capability of IoT devices to play well together.
Although current drain and RF performance will be key considerations for edge devices, many observers expect the profits to reside in the data center.
To that end, Intel announced in April a restructuring initiative to accelerate its evolution from a PC company to one that powers the cloud and the IoT. The company said the data center and IoT businesses are Intel’s primary growth engines, with FPGA technology (obtained through the Altera acquisition) and memory offering opportunities. These growth businesses, Intel said, delivered $2.2 billion in revenue growth last year and made up 40% of the revenue and the majority of operating profit, which largely offset the decline in the PC market segment.
Unfortunately, Intel’s restructuring will result in the loss of up to 12,000 positions globally or 11% of its workforce. Intel expects the program to deliver $750 million in savings this year and annual run rate savings of $1.4 billion by mid-2017.
Writing in Vox, Timothy B. Lee says that business guru Clay Christensen’s phrase “disruptive innovation” is overused, but that it applies perfectly to the Intel situation, in which a cheap, simple technology (based on low-power ARM cores, for example) erodes the market for an established technology (based on Intel processors).
In a blog post, Intel chief executive Brian Krzanich cites five core beliefs driving Intel’s evolution: The cloud is driving the smart connected world, “things” become more valuable when connected to the cloud, memory and FPGAs will enable new classes of products, 5G will be the key cloud-access technology, and Moore’s Law will continue to progress.
“There is a clear virtuous cycle here—the cloud and data center, the Internet of Things, memory, and FPGAs are all bound together by connectivity and enhanced by the economics of Moore’s Law,” Krzanich writes.
Intel isn’t the only semiconductor company pursuing IoT opportunities. Also in April, Cypress Semiconductor signed a definitive agreement with Broadcom under which Cypress will acquire Broadcom’s wireless IoT business and related assets.
In addition, Advanced Semiconductor Engineering and Cypress subsidiary Deca Technologies announced the signing of an agreement whereby ASE will invest $60 million in Deca and will license Deca’s M-Series fan-out wafer-level packaging (FOWLP) technologies. “With the increasing demands to improve performance and reduce package size from the smartphone market and the emerging demand for IoT, the industry has been looking for a FOWLP technology with true manufacturability,” said Chris Seams, CEO of Deca.
The Intel and Cypress IoT initiatives center on processing and communications, but the IoT offers other opportunities as well. Dr. Erik Volkerink, chief business officer at Heptagon, sees a need for improvements in the human-machine link, which he describes as very primitive now. As presented in more detail on page 16, Volkerink says the key is combining artificial intelligence, deep learning, and computer vision. Whereas Krzanich notes that Intel will continue to leverage Moore’s Law, Volkerink says Heptagon will leverage its heterogeneous integration capabilities enabled by “More than Moore’s Law.”
