The semiconductor and electronics industry is "greening" not out of regulatory necessity or marketing hype, but out of the drive to solve technical challenges and to address user demands. The direction that we are moving in is the integration of components that are continuously improved, individually and collectively. The path this successful integration is taking us on is smart and quite green, with all of the rich meanings fully intended.
The demand drivers for electronics during 2011 seemed to be rather few for many along the supply chain; but the ones that hit, hit in a big way. Obviously, smart wireless devices (SWDs) were, and continue to be, the brightest spots in the industry, with demand not forecasted to diminish in 2012. There are saturation points, though, especially for smart phones, and so the question of driving demand forward is essential. Additionally, the traditional PC sector for notebooks and desktops has felt demand soften, and fingers have been pointed at tablet PCs (see this previous MarketWatch Quarterly for more information). Is there a way to reinvigorate the broader PC sector or is device convergence the only endpoint? What of other sectors, markets, or entry-points that provide new device demand, diversification, and additional bills of materials (BoM) which increase chip volume and penetration?
The market would indicate that moving into 2012, strategic and design decisions should center around providing a critical set of "smarter" features in smaller and lighter form types. To provide a "smart" device with "smart" features means to leverage components and architectures and spur (or at least address) demand. At the same time, the desirability of products identified as "green" is on the increase. Fortuitously for electronics makers, "smart" and "green" features are converging. Smart solutions and green solutions across the board enable better chip designs, better power management, smaller medical implants, and bigger connected platforms, such as a truly smart grid which leverages the most integrated cloud computing. Green is smart and being smart, it turns out, happens to promote green.
Why green is smart
Calling something smart and/or green would seem to be the way to get it to sell from a marketing perspective, but what does it really mean for an end-product to be smart or green? Distilling features and capabilities across a wide range of devices for a variety of market verticals, we find striking overlaps at functional and feature levels. Today's smart or green devices feature lighter weight yet durable materials, smaller form factors, improved functionality (speed, low latency, high storage density, connectivity, power management, heat dissipation, etc.), and increased features (high resolution display, multi-tasking, easy data access and manipulation, always-on, always-ready, always-connected, etc.). What makes a device smart or green today is how effectively it can tackle these requirements, whether functional or feature-based, and how well it can anticipate the unanticipated uses and needs the device will be challenged with.
The gamut of devices that must be smart today is far-reaching and pervasive. This high demand for ever-increasing smart devices with ever-richer features and functionality is exactly the penetration point for semi; the cornerstone for the ever-continued demand for next generation electronics. How able we are as an industry to leverage the latest technical designs into devices in order to offer the latest features and functions, which happen to focus around the tags "smarter" and "greener," translates into how strong the growth numbers for 2012 and beyond will be. Leveraging designs means seeing the wider implications of architectural and engineering solutions and realizing that the semiconductor and electronics sectors are a fluid set of ideas and components that, when coupled, are the source for our next levels, the sources of our demand driver creations.
Always On: Power management
Managing the power consumption of a device and providing for efficient dissipation of heat so that it can always be on has become a key requirement for smart devices. Responding to the demand for always on is not just about building a better battery (see here for more on ultracapacitors as a battery solution), but is also about understanding how the integration and/or stacking of processors, sensors, and ICs into complex System on Chips (SoCs) reduces heat and draws less power so that the improvements in batteries can be maximized. The solutions to always on are smart, but the value add is that using less power means fewer recharges, and that means a greener footprint for the device – better overall power management and power draw. Smart supports green which, in turn, drives demand for smarter devices; a win-win cycle for the semiconductor and electronics industry. It is not that green technology is green for green's sake; green technology is the product of smart technologies being applied to device solutions.
The increasingly diverse demand for always on capabilities for multiple end-products across industries and market sectors is a positive for the semiconductor and electronics industry. For example, during the next few years, utility-level as well as wider consumer penetration of smart metering is expected, particularly through smart thermostats as a rising consumer electronic device (see, for example the new nest thermostat here). Smart meters have been touted for many years as the best solution for moving electricity usage and conservation to a demand management position by enabling customers and utilities alike to have real-time information about use and pricing and adjust accordingly. Energy conservation through demand management is both a more sustainable approach to natural resource use and has significant cost savings opportunities. But, as a device, smart meters go beyond this high-level feature and showcase some of the technical design challenges and successes that underscore how and why green and smart are converging to be one and the same.
The design challenge for smart meters is a simplified version of the challenges facing the hottest smart wireless devices (SWDs): low power use, extended battery life, always on, always connected, and significant data handling. In the case of a smart meter installed by an electrical utility company, the device needs to run on a single battery for roughly 20 years under variable weather conditions, and reliably collect data in multiple intervals during an hour, and push those data to both a relay station and the consumer for demand management use (see here, here, and here for more on smart meter solutions, expansions, and their US $49 billion forecast, respectively).
While this might seem to be a highly specialized example, if we stop to think about the core requirements for medical electronics, we see a similar set of requirements: extended and highly reliable battery life, data collection at high interval rates, relay of information (connectivity), and low fault tolerance. Push this set of requirements to automotive and aerospace & defense, and we again find similar types of requirements that are spurring R&D of new batteries (in composition, design, and use), inverters, ICs and (3D) stacking, heat dissipation, and power management, to name a few areas. As we continue to shrink the size of devices, we are shrinking the form factor for the systems and chips, which creates additional architectural challenges that bring us back to power management, dissipation management, and multifunctional processors and controllers. The successes are moving our industry forward and contributing to the way new features and capabilities are presented in new devices and to meet driving demand.
As well summed up here in an EETimes Power Management editorial, battery development, power management, and power dissipation are certainly among the major issues at the heart of solving an array of new architectural and design challenges. Not only is it in the question of heat dissipation and power management where we have found answers to 'smarter, lighter, faster, better' consumer and enterprise devices, but also where we have found new tech solutions that 'fuel' the next generation of hybrid and electric vehicles (HEV and EVs). (For example, see this Q&A on EVs from Greentech Media).
Power management and power dissipation are at the core of the smart and green feature sets, as well as at the heart of the challenges to shrinking to single-nanometer levels and the quest for how far Moore's Law will carry us. Solving issues of managing both on increasingly smaller dies and with more complex SoC solutions is the essence of delivering improved functionality and feature sets for the next generation of electronics across industries and markets. The solutions are what is powering the next generation of tablet PCs, ultrabooks, superphones, TFT LED, and OLED TVs, as well as the price point for LED lighting, all set to arrive, and drive significant demand, in 2012.
Always smarter, always smaller, always portable
Always on is a modern, feature-meets-function demand that intertwines smart and green electronics through power management solutions. But today's electronics, regardless of the industry vertical or end-user they are destined for, must be more than always on. New and more advanced features remain an essential driver to spur end-user demand for devices. This appetite for rapid change is pushing designs and solutions into more integrated solution sets, many of which follow the line of the green/smart convergence.
The ultrabook sector is a good example of a device that is forecasted to drive demand in 2012 as a result of the features supported by highly-integrated components and significant advances in power management, multi-core processors, hybrid drive solutions (SSDs and HDDs), and the displays some ultrabooks are touting with touch-screen displays that can be removed to convert the device to a tablet format. Ultrabook (and superphone) success forecasts are rooted in the design success expectations of the devices. The successes are understood to be the ways in which SoC architectures leverage the advantages of multiple other components; quad-core processors, lower power and heat issues of newer display technologies, the low latency of SSDs, and the quick shut-down and power-up capabilities found in new battery technologies are all products of this leveraging. Combine these components into a Bill of Materials (BoM), and you have a super-device, the ultra-answer to meet all of the "always" scenarios demanded by all industries and all users today.
Integrated solutions are not only found in next generation SoC architectures. The exciting wave that we see goes beyond the integration of component designs for end-products alone, but also leverages the new opportunities from highly-integrated networks to support the massive data repositories being added to everyday. Coupling smart and green hardware (components that are simplex and multiplex) with software applications and services significantly adds to the propulsion of the electronics industry into new territories. One example is the growth of cloud computing and the effect it has had on satisfying feature demands as well as moving other different components to the R&D fore.
Cloud computing for storage and services are forecasted to grow significantly over the next couple of years; Gartner predicts the global market for cloud services alone to reach US $148.8 billion in 2014 (as cited in this Greentech Media research). The cloud is a critical element to delivering heavy data content quickly, manipulating real-time and archived data sets, and being able to multi-task simultaneously. The support for this functionality rests on the convergence of multiple sectors, solutions, devices, and components spanning much of the semiconductor and electronics industry as well as the inclusion of IT and services industries. The end-user moment may be embodied in a seemingly simple user-device interface, a smart solution powered by a vast network of solutions, end-products, and services. This convergence is the source of what may be among the most sophisticated, multi-partner, green solutions, the Smart Grid. According to research by Greentech Media (available for purchase here), the European smart grid technology market alone is forecasted to be roughly US $4.03 billion in 2012, and increase by 120% to US $8.84 billion in 2016. Considering global opportunities, smart grid technologies hold significant promise of bolstering the semiconductor and electronics industries for some time.
The strength of the industry is the driver
In sum, the pervasiveness of smart and green technology is the result of both the strong demand and the response from semi R&D to constantly push technology to the next level. The continued integration of new architectures, designs, and technologies is providing both green and smart solutions to a wider set of verticals and end-users. These solutions are designed to meet the next set of feature and function demands, as well as to drive demand.
The excitement in this recognition is not that the semiconductor and electronics industry need not "worry" about where the next demand drivers will come from, but that the inherent R&D drive within our industry creates these demand drivers organically, if you will. It is not just about a next generation product to save some sector in our industry. The semiconductor and electronics industry is "greening" not out of regulatory necessity, not out of marketing hype, but out of the drive to solve technical challenges and to address business (industry, enterprise, and consumer) needs and use-case scenarios. The direction that we are moving in is the integration of components which are continuously improved, individually and collectively. The path this successful integration is taking us on is smart and quite green, with all of the rich meanings fully intended.