By Dermot Barry, General Manager of the ASIC & IP Division of Adesto
Traditionally, there has been clear blue water between the diverse application areas for electronic products, primarily because each sector had its own requirements and its own criteria. As well as commercial pressures, factors such as safety and approvals vary, leading to different technologies and solutions being developed and deployed in different markets.
Today, the lines are increasingly blurred. There is higher tendency for technologies to migrate from their natural home to applications in other markets. Most prominently, consumer-focussed innovations such as touch screens and wireless connectivity have become widely adopted in industrial products – providing both an opportunity and a challenge for OEMs.
What are the implications of this change? And how should design engineers handle the new reality?
Faster-moving consumer markets
The industrial market tends to move much slower than its consumer counterpart, not least because of its risk-averse nature. For example, industrial products are typically expected to operate over a temperature range of -40°C to something like 85°C or 100°C, whereas consumer parts are normally only qualified to operate between 0°C and 70°C, or sometimes 85°C. Products must be reliable, particularly in harsh environments and suppliers should have suitable quality accreditations, such as ISO9001.
Without the burdens imposed by other sectors, consumer technologies can be more innovative. This is infectious, as customers in industrial markets are now developing an appetite for innovation in the systems they specify and buy.
Customers are fully aware of the cost differential that can exist between components targeting the industrial and consumer sectors. The higher selling price of many products designed for the industrial sector reflects the need to design for more stringent standards in terms of operating conditions, reliability and safety. On the other hand, industrial products can often make excellent use of technologies that are a step behind the bleeding edge of consumer technology – thus getting the best of both worlds, taking on board new innovation, but only once the costs have started to fall.
Regardless of the micro-dynamics, the trend towards adopting consumerism in the industrial sector is still exerting a downward price pressure for OEMs. The Industrial Internet of Things (IIoT) is also making customers more sensitive to cost, as they may now be deploying hundreds of devices, not just one or two. These macro-dynamics add up to a significant opportunity for the right solution.
Technologies in demand for industrial products
While not all of the trends we see in the consumer sector are transferable to industrial environments, there are many that can add significant value. You may not be saying ‘hey Siri’ to a machine tool just yet, but by bringing in other fast-developing technologies such as wireless connectivity and features such as touch screens, industrial products can deliver better usability, higher performance and greater functionality.
The migration to Industry 4.0, or ‘smart’ factories, is also driving the increasing use of computerisation and IT technologies, which may well be derived from consumer products.
For example, compared to an iPad, it can be difficult to be satisfied with the antiquated user interface on a multi-million-dollar factory automation system. Industrial customers want a touch screen that can keep up with, or out-perform, the tablets that their children use at school or home.
Communications is another area where consumer technologies are making a play. This applies both to end products in communications (whether that be satellite, wired or wireless), and for consumer-friendly wireless standards. For instance, Bluetooth was developed originally as a cable-replacement technology for mobile phones, with an ambitious-sounding price target of $5 per chip in its first few years. Today, a full System on Chip (SoC) including Bluetooth, a microcontroller and other functions can be bought for a fraction of that, even in low volumes.
Implications for designers
For electronics designers in the industrial market this means they need to be able to identify suitable consumer technologies, evaluate them and find a way to integrate them into their own designs. This needs to be done quickly and cost-effectively, and the resulting products need to hit industrial-level demands for safety, robustness and operation in harsh environments.
Despite the opportunity, some cautious semiconductor vendors are moving away from what they perceive as niche markets and focusing on growth, sufficing with a relatively small product portfolio focused on industrial applications. Consolidation within the semiconductor industry means there may be no other silicon suppliers stepping in to fill the void, which leaves designers of industrial products finding it harder to specify a standard chip suitable for their requirements.
Custom ICs fill the gap
Instead of searching for standard parts, it may be more effective for OEMs to work with a knowledgeable partner who can create a custom IC for their application. This has the advantage of providing the vast majority of functionality integrated into a single semiconductor, qualified for industrial applications. The custom ASIC vendor should also be able to offer suitable embedded software and expert support.
Working with an expert partner can also help when an OEM lacks the necessary design expertise to integrate consumer technologies into an industrial application. This may not have been applicable for previous generations but is now a clear need for the company’s roadmap. Hiring suitable staff to fill this knowledge gap can be slow and expensive, or simply impossible. An effective alternative is to work with a company that already has this experience and can provide a solution that fits the OEM’s existing business model.
In terms of cost, of course there is a one-off investment in developing a custom ASIC, but this will be counterbalanced by a lower overall BoM cost. Even at relatively low volumes customers typically have a payback period of between 12 to 18 months, after which the savings compared to standard parts can be substantial, and continuity of supply is, of course, guaranteed.
Figure 1 shows an example product, where standard parts with a BoM of $50 are replaced by a custom chip costing $10, and with a one-off NRE charge of $2 million. The graph assumes sales of 50,000 units per year, and shows that the resulting annual saving is $2 million – meaning the initial investment is recouped by the end of the first year.
Opportunities for differentiation
The trend towards the adoption of consumer technologies should not be considered a problem; there is an increased opportunity here for differentiation. In particular, taking technologies that are well-proven in the consumer field and applying them in industrial products means OEMs can still be ahead of the curve in their sector, but benefit from the technologies’ mature status in the consumer world.
This approach can mean costs fall quickly as well-established technologies reach near-commodity status, which also helps mitigate risk. There’s a valuable ‘sweet spot’ of technologies that will be considered mainstream in consumer gadgets but still new and innovative in the slower-moving industrial world.
Security is another competitive factor to consider – how can companies protect their investment in developing a new product and any Intellectual Property (IP) it includes? A custom chip has an intrinsic advantage, as it cannot easily be copied, meaning that a design cannot be replicated easily, and an OEM can make sure it maintains its differentiation.
In summary, designers within industrial OEMs should look carefully at how they can use consumer technologies in industrial markets. Not everything will be suitable, of course, but there are many ways to add new features and capabilities, to meet customer expectations, to increase differentiation and to drive down cost.
The practicalities of today’s semiconductor industry may mean it is difficult for a designer to find the right standard parts they need. Custom semiconductors can fill this gap, and should always be considered as an option at the start of each design project. With the support of an expert partner in a custom ASIC design, taking advantage of consumer technology innovation is a clear opportunity for industrial OEMs – and may be simpler and more affordable than they expect.