Between the headlines of the so-far good and bad news out of 2012, the continued growth forecasts for some component sectors may have been a bit skimmed over. Perhaps because rather than hot CE devices that present ever-greater feature rich options, some devices just don't seem to have the sizzle, but they are increasingly smart, essential, and soon to be quite ubiquitous.
Continued double-digit CAGRWith roughly 40 million devices in place globally, according to this recent article in Product Design & Development, smart meters are an exciting device that bridges the CE and the utility hardware and one that is poised to grow as replacement from analog to digital meters gains momentum. The smart meter market has been growing at a double digit CAGR for the past six years, and the next five year period, 2012-2017, it is forecasted to continue at a 12% CAGR, equating to roughly US $8.2 billion, according to recent research by Lucintel.
Not without challenges
Smart meters pose an interesting set of opportunities and challenges though, and so their embracing has been slower than expected by consumers and by the utilities who, in many cases, provide them. The reasons for the slower adoption of what seems to be a rather obvious technological advancement are relatively straight-forward: misunderstandings about costs, security, and advantages to demand management by consumers, and by the utilities, the longer roll-out of the entire smart grid package that goes hand-in-hand with the smart meters. Given the continued pressure on energy management, the adoption of smart grids, and therefore smart meters, is more of a question of time than actuality.
The smart meters themselves are interesting devices that hold the potential, if adopted, to quickly reach a volume in the millions if a utility, or set of utilities, choses that particular smart meter device for use by their customers. That type of volume ought to trigger a wave of new technologies and devices. Yet while there is certainly healthy competition, the market had yet to really garner the attention of much of the semiconductor and electronics supply chain. But this may not be the case for much longer.
Specialized MCUs blurring the line with ASSPs
With so many end-devices seeing conservative ordering, the requirements for designing and building smart meters are becoming more attractive. Smart meters generally require specialized MCUs and CPUs that can handle the requirements and interfaces. MCUs for smart meters generally require an analog front end and a few different types of interfaces and features such as a clock and LCD controller, see this from Microcontroller Central for specs. As the Microcontroller Central article aptly points out, these MCUs are blurring the line between them and ASSPs:
Highly specialized microcontrollers like the TMPM061 [from Toshiba] are blurring the line between MCUs and application-specific standard products (ASSPs), which typically have limited user programmability. You would use the same development tools for specialized MCUs as for their more generic cousins, but you would have more opportunity for using library functions. The standardized peripheral mix and narrow application space will allow the quick buildup of reusable software blocks for developers. Though it is not quite the kind of drop-in solution that ASSPs provide, the specialized MCU comes close.
As MCUs have become more specialized, the more recent slew that blur the line with ASSPs opens new opportunities for wider growth through wider adoption. One challenge, as the article points out, is awareness, which, as mentioned above, is still a problem for the smart meter market in general.
Smart meters pull along other hardware
These challenges will likely be overcome quickly for smart meters because adoption rates continue to rise globally and emerging economies are following traditional technological leap-frogging and adopting smart grid solutions during their current expansions. With these smart grid implementations, come the slew of necessary hardware and end-devices, such as smart meters, and so growth is really quite certain.
Fortuitously, the story does not end with this steady, double-digit growth market, because one of the main products of smart meters is data, "Big Data" as it is termed. The solutions to handling Big Data are also still on the cusp of growth, as reviewed in the recent Smith MarketWatch Quarterly. Big Data requires new enterprise solutions for handling, manipulating and storing the data so as to gain actionable business intelligence (BI) and be able to perform and then act upon critical business analytics. Herein lies another layer of the adoption problem, the changeover of the software and middleware back-ends is still at lower levels due to cost and time requirements for implementing these systems at the utility side. An unfortunate result is the lack of full benefits from smart meter implementations by both users and utilities in far too many cases.
Obviously, the Green Tech sector is one experiencing significant growth that will persist for the foreseeable future. Understanding the opportunities for the semiconductor and electronics industry is important as our industry continues to expand beyond the still lack-luster PC heavy sector in order to maintain growth.