iPhone's impact minimal on chip market

Future Horizons recently released its Global Semiconductor Monthly Report June 2008. Download the report here.

The first question on everyone's minds is: Are there finally any signs of the global semiconductor/chip industry turning around. Malcolm Penn, CEO, Future Horizons says that most of the evidence is still anecdotal. The real, clear proof will show itself in Q3-08.

There are a set of market fundamentals that are in remarkably strong form. The global economy still strong, and even showing signs of 'not getting worse' in the US. However, there is also tight fab capacity. No matter, the unit demand has been holding firm and ASPs are holding no longer in free fall.

Even the memory market has been holding up much better for now. Penn says that memory ASPs have been 'flat' for six months now. So, there has been some upward movement in ASPs. According to Penn, memories have been flat, and are no longer falling. The logic has been increasing, but micro is still falling, and the overall total ICs is trending up.

The impact of Apple's iPhone 3G has been minimal so far on the chip market. Penn says: "It's just one item in a very large and complex mix of products. The overall i-phone volume is miniscule," adds Penn.

With several advancements and announcements happening in the solar/PV segment, it may seem that the solar/PV market is taking over from where the chip market slipped. Penn says that although it certainly is a growth market for the equipment suppliers, but with still very small numbers, it cannot make up for the semicon equipment/capex slowdown.

Future Horizons had earlier forecasted 12 percent growth for the global semiconductor in 2008. With some other analysts revising forecasts, let us examine whether Future Horizons consider a revision as well.

Penn says: "If I were doing the forecast now, I'd have probably settled on 10 percent rather than 12 percent, but this is fine-tuning the maths, and not the analysis. We will not be changing our forecast at the July seminar.

"Our overall message is clear. The growth this year will NOT be 4-5 percent. I really do not care, if 10 percent rather than 12 percent is the final real number. We are not in the business of 'guessing the right number', rather, just getting the trends and analysis right."

Penny yet to drop
Finally, there is a need to take into account the falling cap ex, tight capacity, focus on profits, continuing strong market demand, second half seasonal effects, etc. The forecast tea leaves all seem to be pointing in the same positive direction. Has the worm finally turned for the industry? Future Horizons thinks so! It also believes that the penny has yet to drop and that the impact on the market will be dramatic.

Penn explains that low capex means less new capacity (12 months later). And less new capacity means tighter supply. Tighter supply means price increases and rationing.

In parallel, falling ASPs means less profits. Less profits means an unwillingness to invest. Low ASPs means a reluctance to supply. Eventually, either someone exits the business or they increase the price.

"Positive unit growth (it is, IC units are up 9.2 percent YTD on 2007) and a positive ASP growth (so far 2008 YTD the trend is still negative 3.9, but this will reduce in 2H at least to zero, my guess is slightly positive. It is already only half last year's decline) means strong value growth hence our belief growth will end up in the '10 percent' range," he adds.

WDS helps meet top needs of CIOs

Riverbed Technology recently launched a new version of its product – Riverbed RiOS 5.0. According to Apurva Dave, Director of Product Marketing, with RiOS 5.0, Riverbed enables even faster performance for enterprise applications and enhances the manageability to deliver its market-leading WDS solution.

Riverbed accelerates the access to information to improve processes and make businesses more agile. With improved network flexibility, security and ease of management for large-scale deployments, it has extended the wide-area data services (WDS) solutions leadership, and helps data and businesses move faster. Significantly, Riverbed's growth rate outpaces the industry.

Davé, said: "CIOs realize this to be an absolute part of their investment. People have seen bandwidth savings in major applications." Citing globalization as a major challenge, he added that organizations needed to solve applications performance.

Network flexibility
Riverbed provides flexibility for organizations that want to enable end-to-end transparency of WAN traffic by IP address and port or by port only. Steelhead appliances enable full IP or port-only address visibility on the WAN for optimized connections in addition to their default correct addressing mode.

The security functionality in RiOS 5.0 builds on Riverbed’s extensive work in building solutions that ensure the security and integrity of enterprise data. With RiOS 5.0, Riverbed has enhanced the implementation of SSL acceleration, with new functionality for ease-of-setup and management. The QoS capability provides granularity, as well as simplified management for complex environments.

The company's Steelhead products accelerate applications to branch offices and mobile workers. Apparently, Steelhead products cut bandwidth usage by 60-95 percent.

Meeting top CIO priorities for 2008
CIOs are said to trying to design around four principles -- to support an agile enterprise. These are -- flexibility, simplicity, continuity and security. So what are the top priorities for CIOs in 2008? As per a December 2007 Goldman Sachs CIO Survey, the top 20 priorities for CIOs are:

1. Business intelligence; 2. Application integration; 3. ERP software; 4. BPM/workflow software; 5. Security; 6. Storage hardware (disk arrays, appliances, etc.); 7. DR/BCP; 8. Server virtualization; 9. Server consolidation; 10. Data center consolidation; 11. Web application development, including portals; 12. Wireless networking; 13. Mobile computing/remote access; 14. Compliance/risk management; 15. WAN optimization; 16. Storage management software (including backup); 17. SOA; 18. Cost cutting; 19. CRM software; 20. Thin client computing.

And where does WDS fit in with CIO priorities? In all of them, barring All of them, except nos. BI, BPM/workflow software, storage hardware and storage management software! WDS is based on accelerating the enterprise applications!

The Riverbed Optimization System takes care of data streamlining -- optimize WAN bandwidth utilization, prioritize applications' bandwidth use, and accelerate large-scale disaster recovery jobs; transport streamlining -- eliminate transport protocol inefficiencies, support secure traffic acceleration (SSL); application streamlining -- optimize application WAN performance and reduce protocol chatiness; and management streamlining -- enable transparent deployment, provide additional best-of-breed services, and facilitate central management and reporting.

The enterprise can eliminate bandwidth constraints. In fact, it can enjoy up to 5x more bandwidth without additional network costs. Applications can be accelerated over the WAN to mobile users or branch offices up to 100x times faster. Make it simple to deploy and manage 15 minutes for basic deployment enable consolidation. WDS is said to have a tangible, fast payback. An IDC study finds 7.3 month payback for Riverbed implementations.

Top features in RiOS 5.0
Riverbed's RiOS 5.0 delivers choice for enterprises through market-leading features. Two very significant features are accelerating Exchange and the RiOS Services Platform (RSP).

In RiOS 5.0, only one module may be run in the RSP, and not all services may be currently available. The RSP runs in a protected zone and does not impact the resource allocations dedicated to maintain peak Steelhead operations.

Dave elaborated: "We have created an area on our software where users can deploy best-of-breed services. In the first release, we will allow only one among print services, streaming media and networking (DNS/DHCP). In the next phase, we will enable a broad range of services." Enterprises can therefore leverage the WDS footprint further and also use best-of-breed services from other vendors.

Riverbed has also been very focused on Web based applications. He added: "We have introduced new features that are Web applications. In rel 5.0, we have added three applications/features."

Apple shocks industry with PA Semi buy!

According to The Unofficial Apple Web Blog (TUAW), Apple has stunned the industry by acquiring P.A. Semi, a Santa Clara based chip company founded by Dan Dobberpuhl, the former lead designer of the DEC Alpha and StrongARM processors, for US $278 million.

The Computerworld Blog reported that Apple had 'shocked' everyone with this move. P.A. Semi is a fabless chip designer that specializes in super low power PowerPC processors.

This move surely raises questions about Apple's future association with Intel, which has been courting Apple since long to adopt its Atom low-power processor family. It also remains to be seen whether Apple will use these super low power PowerPC processors in embedded devices, such as high end iPhones, iPods, etc.

Interestingly, the PA Semi Web site is displaying a message: This account has surpassed its bandwidth allocation at the present time. You may reach the account administrator. Maybe, too many folks are trying to access the site to find out more about this company.

The Apple buyout of PA Semi was possibly first reported by Forbes. Since then a whole lot of articles have appeared on the Web.

According to the site, Apple spokesman Steve Dowling reportedly said, "Apple buys smaller technology companies from time to time, and we generally do not comment on our purposes and plans." He is also said to have declined to comment on the value of the deal, which a person familiar with the deal suggested was done for $278 million in cash.

Apple later announced its quarterly earnings Wednesday. As per Apple's financial results for fiscal 2008 second quarter ended March 29, 2008, the company posted $7.51 billion revenue and net quarterly profit of $1.05 billion, or $1.16 per diluted share.

These results compare to revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share, in the year-ago quarter. Gross margin was 32.9 percent, down from 35.1 percent in the year-ago quarter. International sales accounted for 44 percent of the quarter's revenue.

Apple shipped 2,289,000 Macintosh computers during the quarter, representing 51 percent unit growth and 54 percent revenue growth over the year-ago quarter. It sold 10,644,000 iPods during the quarter, representing 1 percent unit growth and 8 percent revenue growth over the year-ago quarter. Quarterly iPhone sales were 1,703,000.

As per another Forbes reports, Apple has promised to sell 10 million iPhones in 2008 on a call with analysts Wednesday. Watch this space, as Apple is surely going to be in news for most of this year.

MHEG-5 headed for India

MHEG-5 is an open standard middleware solution, an application program interface (API), designed specifically for low-cost memory constrained devices -- particularly suitable for digital interactive TV (iTV) services and is platform agnostic. Simply put, MHEG-5 is a simple object-orientated programming language.

MHEG-5 was initially adopted in 1998 by ONDigital in the United Kingdom (rebranded as ITV Digital) for use in the world’s first pay-TV digital terrestrial television (DTT) network. ONDigital lead the industry wide specification and development task of the first MHEG-5 profile, which subsequently (after the collapse of ITVDigital) formed the basis for deployment of interactive services on the UK DTT platform (Freeview).

Developed by the ISO-MHEG group and DAVIC in 1995, it is intended as a UI for DAVIC interactive services and VOD. MHEG-5 has been standardized in ISO 13522-5 and adopted by the UK DTG in 1997.

Going by its history on IMPALA (The International MHEG Promotion Alliance), MHEG (Multimedia and Hypermedia information coding Expert Group) originally developed and standardized by Working Group 12 (WG12) of the ISO -- officially known as ISO/IEC JTC1/SC29/WG12. It was developed in the mid 1990s as part of the DAVIC (Digital Audio Video Council) standardization effort to support interactivity and navigation of multimedia services on various small footprint devices.

WG12 issued a suite of documents (MHEG parts 1-8) as part of MHEG standard covering extensions for scripting language (MHEG-6), testing and interoperability (MHEG-7) and support for encodings in XML format (MHEG-8). Part 5 of the standard, officially known an ISO/IEC 13522-5, or more commonly know as MHEG-5 that is of primary relevance to interactive DTV.

So what's hot about MHEG-5? Well, the standard's profile evolved to UK Profile 1.06 (current); ETSI standard ES 202184. And now, new international profiles extend the UK profile. These include: New Zealand -- extra Maori characters and EPG key; Hong Kong -- Traditional Chinese font; Singapore/China - simplified Chinese font. Certain other extensions are said to be under development within DTG for possible deployment in 2008. These include IP interaction channel (return path), improved graphics, HD compatibility and support, and PVR support.

Heading for India?
What's more significant is that MHEG-5 is said to be launching in India and in Hong Kong in 2008! Trials and evaluations are reportedly ongoing in Ireland, Malaysia, Singapore, Turkey, India and Russia. There is said to be interest from other countries in Europe and Asia as well.

MHEG-5 has no known essential IPR. The MHEG middleware software is typically less than US$1 per receiver. It has had wide integration into iDTVs in Europe. Finally, MHEG is proposed as the UI for new Common Interface spec (CI+), as well.

I hope to be speaking with IMPALA sometime soon about its plans for India and update you appropriately!

NXP India achieves RF CMOS in single chip

NXP Semiconductors India has developed the PNX4902, an ultra low-cost GSM/GPRS single chip, which was announced this February. The highlight -- the entire analog and RF work done has been in Bangalore! You might wonder what's so unique about this!

Well, let's start with what is tough about RF CMOS in single chip! CMOS is primarily a digital process. The analog circuit design in CMOS is tough, and the RF circuit design in CMOS is even tougher. Now, the co-existence of RF CMOS circuits with noisy digital in a single chip was (and is) considered the holy grail of chip design.

Next, cellular standards (such as GSM, EDGE) and specs are much tougher than other comparable standards like FM, Bluetooth, etc. Also, some key cellular parameters like RX sensitivity become tougher for single chips aimed at emerging markets. Especially, we all know that base stations are sparse in rural areas. Taking all of these as a whole -- RF design in presence of digital noise is the biggest challenge in a single chip!

Factors enabling single chip design
There are said to be three factors. One, RF CMOS is the high quality analog/RF design in CMOS. The high-performance RF blocks like LNA, mixers, etc., used to be the domain of BiCMOS, a higher cost technology. Next, fine-line CMOS (0.18mm and lower) provide high fT and lower noise.

Two, there are new architectures that minimize analog signal processing. Chip designers to convert the analog signal to digital -- so they might as well do it early -- analog-to-digital conversion at the IF, instead of at DC. There's also a need to move the final down-conversion and filtering into digital domain.

Three, the use of DSP to calibrate the analog performance. Things like temperature and process sensitivities in analog circuits need adjustments. Also, the digital engines can provide the ability to 'lock-in' the performance. Finally, a strong 'engineering culture' is a MUST to execute on complex chips.

Factors enabling AeroFone single chip design
NXP had acquired Silicon Labs Wireless group in 2007. Silicon Labs was a leader in RF CMOS, and so it also acquired numerous patents and trade secrets. Trade secrets for integration of RF CMOS circuits with noisy digital provide an edge over competitors as the integration intensifies.

Thereafter, NXP went on to form the NXP India single-chip design team. As single chip products are designed for emerging economies, NXP India invested heavily to develop the design expertise in Bangalore. The seed group of chip leads and system leads relocated from USA to India to start an analog/RF competency center for developing highly integrated chips.

The NXP India single chip design team has the vision to be the best center of competence in architecture and design of highly integrated circuits (ICs) for emerging market products. It is building the best analog/RF group in India.

Can we expect exciting times in 2008?

Welcome 2008! May I wish all my readers a very happy and prosperous 2008. Another year's gone past. We have a habit of looking back to see at what happened and what could have been.

A lot has been written already about 2007 and what to expect in 2008. So let's just touch upon some of the events from 2007 and some expectations from 2008.

For India, 2007 was a great year for the semiconductor industry -- first, the Indian government announced the semiconductor policy, followed some months later by the fab policy. Both were tremendous firsts in India's science and technology, and not IT, history. Everyone hopes that the Indian semiconductor industry will take off this year. Eyes are focused on the embedded segment, what with the global semiconductor industry reportedly facing 'an embedded dilemma.'

An issue hitting the EDA industry is that, the cost of designing or developing the embededded software for an SoC actually passed the cost of desgining the SoC itself in 2007. The world needs to avoid this software crisis, and India is well placed to take full advantage and play a major role, given its strength in embedded.

In IT, it's been a mixed sort of a year for Apple, which hit big time with the iPhone, seemed not to make waves with either the Safari browser or the Leopard OS. Microsoft had the Vista OS, but then, Vista didn't exactly warm the hearts of users or those who wished to upgrade their OS, including yours truly. Maybe, 2008 would ring in better times for Vista.

While on browsers, Firefox has gained lot of ground. However, by the end of 2007 came the news that the Netscape Web browser -- which started it all -- would soon be confined to history.

Netscape Navigator was the world's first commercial Web browser and launch pad of the Internet boom. It will be taken off on February 1, 2008, after a 13-year run. Time Warner's AOL, its current owner, has reportedly decided to kill further development and technical support to focus on growing the company as an advertising business. The first version of Netscape had come out in late 1994.

In gaming, there are admirers of Wii, PS3 and Xbox 360, and will remain the same. Which one of these gaming consoles will reign supreme, eventually, is difficult to predict.

In consumer electronics, lines are surely blurring between portable media players (PMPs) and portable navigation devices. Also, it would be interesting to see how digital photo frames survive 2008. A reported tight supply, especially for seven-inch models, has led to some makers in Asia either postponing mass production or extending lead times. Surely, makers cannot add more entertainment functions in smaller screen models, to keep costs down.

In the security products market, IP cameras and video servers should have a better year, with more emphasis now on video surveillance. In fact, some friends have been querying me as well regarding their potential.

On components, we can hope to see more growth for solid polymer capacitors in 2008, and among PCBs some fabricators should start manufacturing high-density interconnect (HDI) PCBs this year.

In wireless, we should witness TD-SCDMA in operation prior to the Beijing Olympic Games. Backers would like to see TD-SCDMA succeed, given the effort Datang-Siemens has made on the technology, as also the Chinese government, which issued spectrum for TD-SCDMA nearly five years ago!

Let's all welcome 2008 and look forward to more exciting things happening.

Top 10 tech trends likely to make waves in 2008

It is quite a task to predict what the New Year has in store for us. My friend Radhika Nallayam at CIOL and I, present you a list of technology trends likely to make waves in 2008.

1. Greening of IT

Data centers of today are witnessing very high power consumption and cooling requirements. Skyrocketing energy consumption surely poses a challenge to the environment. Besides this, the hazardous effect of e-waste is also a major environmental concern in today’s IT sector. (It is estimated that more than 800 million PCs will be replaced during 2007 and 2012)

As a result, the IT world has started realizing the need for ‘greening of IT’ to minimize the harmful effects of energy expulsion from IT operations and data centers. (Green Data Center report from Symantec Corp. states that nearly three-fourths of respondents of the survey stated they have interest in adopting a strategic green data center initiative).

The ‘green IT’ movement has already succeeded in creating environmental responsibility among major IT vendors across the globe.

2. Is 2008 going to be the year of Linux?

It’s been years since we started talking about the ‘year of Linux’. Finally, good news for open source buffs? Well, we really can’t predict that. But, there is a hope that the coming time could be a real turning point in the history of open source, making 2008 the year of Linux on desktop. Though Linux will not be a direct replacement for Windows, we are definitely going to see a major increase in the number of end-users adopting Linux.

PC giant Dell, at the beginning of this year, gave us a positive sign by introducing Linux computers. A number of other vendors are also betting high on Linux. Ubuntu has already received recognition among mobile users and server market. Linux Desktop, though gradually, is gaining momentum. At this point in time, we can only wait and watch the game!

3. Will Vista be the OS to own?

When Microsoft launched Vista, Gartner’s analysts suggested ignoring the new operating system until 2008 and not to rush into upgrading. So, it’s time for us to rethink. Lots of users are still waiting for the first service pack to arrive before upgrading from Windows XP. And, hopefully, SP1 is likely to arrive in the beginning of 2008.

Vista definitely offers some advanced security feature and more polished interface. But due to some concerns related to application compatibility and more hardware requirements, consumers, till now, were reluctant to switch to Vista.

However, some recent surveys show that a lot of companies are now willing to upgrade to Vista. Microsoft expects Vista to be accountable for 85 percent of operating system sales in fiscal 2008 compared with 15 percent for Windows XP. Majority of the consumers will, sooner or later, have to migrate to Vista. Well, that could be in 2008.

4. IPTV sees big surge in popularity

IPTV (Internet Protocol Television) is already in spotlight. It has opened up new possibilities for consumers, service providers and content providers. From a mere technology concept, IPTV has completed the first stage and has become a real service. In some countries, it is almost in the mass-market stage. IPTV is considered to be one of the most highly visible services to emerge as part of the development of next-generation networks (NGN).

There are many more questions to be answered pertaining to the business model, pricing, packaging and the technology itself. But, the coming year is definitely going to see more developments in the IPTV space.

One thing worth mentioning, which may prove to be crucial for IPTV to reach its market potential, is the devlopments of standards for IPTV. The International Telecommunication Union (ITU) recently announced the first set of global standards for IPTV. So, there are definitely some good news for us. And, no doubt , as long as the demand for high-quality personalized content exists among the consumers, IPTV will not struggle to reach new horizons.

5. Will 802.11n arrive?

The 802.11n, the latest in the set of WLAN standards, comes with truly high speeds i.e. 4-5 times faster than 802.11g and fifty times faster than .11b! It also offers better operating distance comparing to the current wireless networks. Wow! This is really something the enterprises would love to invest in.

There is no doubt that 802.11n is well positioned to redefine wireless networking. But, would the new standard finally arrive in 2008? Ratification of the new standards is been delayed for quite a long time now and the users are really keen to see the faster version of Wi-Fi, without any more delay.

However, experts predict that ratification won’t happen overnight and it’s going to take some more time. Though some Wi-Fi vendors( Cisco, Aruba, Trapeze) have already launched 802.11n products, technology installations may happen only in the middle of 2008.

6. Short-range wireless technologies that will create a buzz

Short-range wireless technology is not just about Bluetooth anymore. New entrants like High-speed Bluetooth, Wireless USB and ZigBee are getting traction too. Demand for high data transfer rates has increased over the years with the increase in video and audio content on portable devices like mobile phones, laptops as well as on multimedia projectors and television sets.

Though high-speed Bluetooth is in its primary stage of development, it is expected to be 100 times faster than the current technology. This next-generation Bluetooth will hopefully hit the market in 2008.

Wireless USB is targeting 1Gbps throughput. Vendors have already introduced wireless USB hubs, adapters and laptops in the market. However, wide adoption of the technology depends on how soon it is going to be embedded into digital cameras, camcoders, MP3 players etc.

ZigBee is the wireless connection used by sensors and control devices. It is expected to find traction in commercial building automation in 2008.

7. No end in sight for high-definition (HD) war

Is the war between Blu-ray and HD DVD high-definition video formats never ending? Well, there, definitely, is an end. But that may not be in 2008 Analysts in the industry predict that the high-definition war may last for another year and a few months. There is a strong market position for both the standards currently and this makes it difficult to predict the winner.

Meanwhile, there has been no improvement in the sales of both the technologies this year as consumers still feel both Blu-ray and HD DVD are expensive.

On the other hand, Toshiba recently introduced comparatively low priced HD DVD players. This initiative definitely poses a challenge for Blu-Ray companies. To cope with this, they will have to cut down the hardware prices of Blu-ray. If that happens, the war will continue for some more time.

8. Shift from magnetic to solid-state hard drives

At present, the market is dominated by magnetic hard drives. But the future seems to be of solid-state hard drives as magnetic hard drives have limited data transfer speed. Solid-state hard drives are based on flash memory and is much faster memory solution. They also have advantages such as low noise and low power consumption. High pricing is the primary hindering factor for solid-state hard drives to become mainstream.

As long as the demand for high-quality personalized content exists among the consumers, IPTV will not struggle to reach new horizons.

Major players like Seagate are betting high on solid-state technology and have plans to offer it next year. Solid-state hard discs are likely to be more popular in the laptop market. If prices fall down, we can see a slow shift happening from magnetic to solid-state hard drives in 2008.

9. Is 2008 going to be a banner year for wireless?

We no more worry about the clutter of wires. Offices have gone wireless. Cities are going wireless. All portable devices have embedded wireless technologies. We are moving fast towards a ‘wire-free’ world. So, 2008, beyond doubt, is going to see much more technology developments.

Though the ‘wireless’ world won’t be a true reality so soon, the need for seamless mobility and freedom is surely going to drive more wireless technology advancements.

The upcoming 802.11n will redefine enterprise networking in the coming year. Fixed Mobile Convergence (FMC) will tie fixed and mobile networks to deliver enhanced user experience. 2008 is expected to be the year of Mobile WiMax as well. Above all these, 2008 will probably witness open access to all networks, which in turn will open up more opportunities.

10. The ‘iPhone mania’ to continue

iPhone rates as the most memorable new product for 2007. Yes, it literally shook the mobile phone world in 2007. Now, doubtlessly, companies would love to follow Apple’s path by introducing similar products. So, 2008 is certainly going to see mobile phones with more and more web services and multimedia functionalities integrated into it. So, 2008 could very well be a year of ‘iPhone-like’ products from Apple’s rivals.