Predicting the Next Wave of Semiconductor Growth Wally Rhines President and CEO Mentor, a Siemens Business January 16, 2018
Electronic Equipment Revenue ($Billions) New Semiconductor Applications Drive Waves of Growth and New Company Leaders ~ $2.5 Trillion in 2018 $3,000 New Markets Spawn New Leaders $2,500 Internet of Things Era $2,000 $1,500 Notebook PC Era Embedded Systems Era Mobile Comms Era $1,000 $500 Mainframe Era Stand-alone PC Era Networked PC Era $0 Sources: Mentor Graphics Analysis and VLSI Research February 2015
The Gompertz Curve y = a e be -ct y Benjamin Gompertz, 1825 Mathematical model for time series Growth percent is fastest at the start and slowest at the end Example Growth of tumors Population growth Mobile phone uptake Market impact in finance time
# of units/year Cumulative units Typical Product or Industry Life Cycle units/year t units/year o time time
Gompertz Curve Lifecycle Maturity with Lower unit growth rate Cumulative units Highest percent growth rate Constant unit growth rate Y =0 (~37% of final units) time Forecast
Gompertz Curve for Project Management Forecast completion Actual completion Cumulative lines of debugged code or Cumulative simulated transistors Y =0 time Forecast
Units Shipped (Billions) $ Average Selling Price Solid-State Imager Cost and Unit Volume 6.0 Image Sensor Unit Shipments & ASP $25 5.0 $20 4.0 3.0 2.0 $15 $10 1.0 $5 0.0 $0 Source: IC Insights OSD-2015
Cumulative Unit Volume (Billions) Gompertz Curve for Solid-State Image Sensors 160 140 120 100 80 60 40 20 0 Image Sensor Units Forecast Source: IC Insights OSD-2015
Video Surveillance Surveillance cameras to increase around 46% (CAGR) Transparency Market Research, May 15 2014
Myriad of New Applications for Solid-State Imagers
Cumulative Unit Volume (Billions) PC Desktop Shipments S-Curve Gompertz Forecast 2016 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Desktop PCs Forecast Sources: Semico Research, IC Insights & Mentor Graphics
Cumulative Unit Volume (Billions) PC Desktop Shipments S-Curve Gompertz Forecast 2007 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Desktop PCs Forecast 2007 Sources: Semico Research, IC Insights & Mentor Graphics
Cumulative Unit Volume (Billions) PC Desktop Shipments S-Curve Gompertz Forecast 2007 vs. 2016 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Desktop PCs Forecast 2016 Forecast 2007 Sources: Semico Research, IC Insights & Mentor Graphics
Cumulative Unit Volume (Billions) PC Desktop Shipments S-Curve Gompertz Forecast 1998 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Desktop PCs Forecast 1998 Sources: Semico Research, IC Insights & Mentor Graphics
Cumulative Unit Volume (Billions) PC Desktop Shipments S-Curve Gompertz Forecast 1998 vs. 2016 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Desktop PCs Forecast 2016 Forecast 1998 Sources: Semico Research, IC Insights & Mentor Graphics
Cumulative Unit Volume (Billions) PC Notebooks Gompertz Forecast 2016 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Notebook PC Forecast Sources: Semico Research, IC Insights & Mentor Graphics
Cumulative Unit Volume (Billions) PC Notebooks Gompertz Forecast 2001 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Notebook PC Forecast 2001 Sources: Semico Research, IC Insights & Mentor Graphics
Cumulative Unit Volume (Billions) PC Notebooks Gompertz Forecast 2001 vs. 2016 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Notebook PC Forecast 2016 Forecast 2001 Sources: Semico Research, IC Insights & Mentor Graphics
Cellular Subscribers (Billions) Total Cell Phone Subscribers Gompertz Forecast 2016 8.0 7.0 6.0 5.0 4.0 Source: The Guardian 3.0 2.0 1.0 0.0 Global Subscribers Forecast Source: International Telecommunications Union
Cellular Subscribers (Billions) Total Cell Phone Subscribers Gompertz Forecast 1997 8.0 7.0 6.0 5.0 4.0 Source: The Guardian 3.0 2.0 1.0 0.0 Global Subscribers Forecast 1997 Source: International Telecommunications Union
Cellular Subscribers (Billions) Total Cell Phone Subscribers Gompertz Forecast 1997 vs. 2016 8.0 7.0 6.0 5.0 4.0 Source: The Guardian 3.0 2.0 1.0 0.0 Global Subscribers Forecast 2016 Forecast 1997 Source: International Telecommunications Union
Cumulative Unit Volume (Billions) Smartphones 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Smartphone Units Forecast Source: IC Insights Market Driver Report, 2016
Cumulative Unit Volume (Billions) Smart Meters 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Smart Meters Forecast Sources: IC Insight, IC Market Drivers, 2015
Cumulative Unit Volume (Billions) IoT Wearables 4 3 2 1 0 Wearables Forecast Sources: IC Insight, IC Market Drivers, 2016
Cumulative Unit Volume (Millions) IoT Fitness Trackers 800 600 400 200 0 Fitness Trackers Forecast Sources: IC Insight, IC Market Drivers, 2016
Cumulative Unit Volume (Millions) IoT Medical Wearables 150 100 50 0 Medical Wearables Forecast Sources: IC Insight, IC Market Drivers, 2016
Cumulative Unit Volume (Millions) 3D Televisions 600 500 400 300 200 100 0 3D TVs Forecast Source: IC Insights Market Drivers, 2016
Cumulative Unit Volume (Millions) Automotive Night Vision Systems 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Night Vision Systems Forecast Source: Strategy Analytics, 2016
Cumulative Unit Volume (Millions) Automotive Drowsiness Monitor Systems 90 80 70 60 50 40 30 20 10 0 Drowsiness Monitors Forecast Source: Strategy Analytics, 2016
Cumulative Transistor Unit Volume Total Transistors 5.E+22 5.E+22 4.E+22 4.E+22 3.E+22 3.E+22 2.E+22 2.E+22 1.E+21 1.E+21 1.E+21 8.E+20 6.E+20 4.E+20 2.E+20 0.E+00 2005 2010 2015 1.E+22 5.E+21 0.E+00 Total Transistors Forecast Source: VLSI Research, 2016
Cumulative Transistor Unit Volume When Will We Need an Alternative to the Silicon Transistor Switch? Maturity approaches 5.E+22 5.E+22 4.E+22 4.E+22 3.E+22 3.E+22 Constant growth rate 2.E+22 2.E+22 1.E+22 Today 5.E+21 0.E+00 Total Transistors Forecast Source: VLSI Research, 2016
Three Major Areas of IoT Semiconductor Growth Data center analytics, networking and storage Big digital SoCs Storage Solid state memory Gateways Data collection hubs IoT nodes Sensors Actuators Imagers Transmitters
Most of the IoT Semiconductor Revenue Today Is In the Data Center Data center analytics, networking and storage Big digital Storage Gateways Data collection hubs IoT nodes Sensors Actuators Imagers Transmitters
Cumulative Unit Volume (Millions) Servers S-Curve 400 350 300 Server Semiconductor Consumption as a Percentage of Total Semiconductor Revenue 2015 4.2% 250 200 150 100 50 0 Server Unit Shipments Forecast Sources: Gartner Group, IC Insights & Mentor Graphics analysis
From Mega Datacenters to Hillary Clinton s Closet
Cumulative Unit Volume (Millions) Datacenter Optical Interconnects 40 Gb Ethernet 10 9 8 7 6 5 4 3 2 1 0 40 Gb Ethernet Forecast Source: Lightcounting, 2015
Cumulative Unit Volume (Millions) Datacenter Optical Interconnects 100 Gb Ethernet 5 4 3 2 1 0 100 Gb Ethernet Forecast Source: Lightcounting, 2015
Cumulative Unit Volume (Millions) Datacenter Optical Interconnects All Data Rates 700 600 500 400 300 200 100 0 Data Center Optical Interconnect Forecast Source: Lightcounting, 2015
Today s IoT Evolution/Revolution Server Network Center Big data Big VLSI Big memory Big $ Gateways Medium data Medium VLSI Medium memory Medium $ Sensors/Actuators Ultra small Ultra low power Ultra low cost Small, sensing, computing, memory, broadcast Low $
Intelligence Flows Downhill Dumb Terminals Mini Computers Mini Computers Mini Computers Personal Computers Personal Computers Dumb Terminals Dumb Peripherals Smart Peripherals 1960s 1980s 1990s 2000s
Gateways Will Become a Big Market for Semiconductors Data center analytics, networking and storage Big digital Storage Gateways Data collection hubs IoT nodes Sensors Actuators Imagers Transmitters
Cumulative Unit Volume (Millions) IoT & Intelligent Gateways 16 14 12 IoT & Gateway Semiconductor Consumption as a Percentage of Total Semiconductor Revenue 2015 3.1% (IC only) 10 8 6 4 2 0 Gateways Forecast Sources: IC Insights, Market Drivers
Semiconductor IoT Nodes Big Volume, Low Unit Prices Data center analytics, networking and storage Big digital Storage Gateways Data collection hubs IoT nodes Sensors Actuators Imagers Transmitters
IoT End-Use Nodes Volume is urban infrastructure Traffic lights, Metering (water, electric, etc.) $20 $15 $10 $5 $9.6B IoT Semiconductor by End Category $11.9B $15.4B $18.4B Wearable Systems CAGR = 207% Connected Vehicles CAGR = 36% Connected Homes CAGR = 26% Connected Cities CAGR = 18% Industrial Internet CAGR = 24% Sensors, Actuators Discrete 2015 IoT Semiconductor $15.4 Billion 30% 70% MPUs/MCUs, SoCs, Memory, Analog, Wireless & Wired ICs $0 2013 2014 2015 2016f Market Total CAGR 5 Year = 24.2% Sources: IC Insight, IC Market Drivers, 2015
IoT Edge Device Complex but extremely cost-sensitive design Sensor with MEMS A/D converter Analog signal processing Digital interface Radio (RF communication) Microcontroller Microcontroller ST Microelectronics / STM32L151C6 ARM Cortex-M3 processor Accelerometer Battery Charger IC Texas Instruments / BQ24040 Bluetooth IC Nordic Semiconductor / nrf8001 Source: ifixit.com
Cumulative Unit Volume (Millions) MEMs-Based Sensors (Excluding Actuators & Optoelectronic Sensors) 200 180 160 140 120 100 80 60 40 20 0 MEMs-Based Sensors as a Percent of Total Semiconductor Revenue 2005 0.8% 2010 1.3% 2015 1.8% 2000 2005 2010 2015 2020 2025 MEMs Sensors Forecast Source: IC Insights, 2016
Internet of Services Information services $ $ $ $ $ $ $ $ Intelligent control systems $ $ $ $ Engineered packaged solution $ $ Sensor $
Value of Data A single twin-engine aircraft with an average 12-hr. flight-time can produce up to 844 TB of data. Bhoopathi Rapolu, Aviation Week, Jan 18, 2016
Non-Semiconductor Companies are Designing New Chips 382 million people have diabetes globally Continuous glucose monitoring Can potentially track 100s of bio markers Source: IC Insights McClean Report
Will Information Companies Become the Next Generation of Semiconductor Companies?
IoT As a Source of Future Semiconductor Revenue Growth IoT data owners will make most of the money Traditional semiconductor companies will attempt to capture data ownership value Growing semiconductor/sensor capability will create new semiconductor applications and bring new companies into semiconductor design