With a clientele spanning over 14,000 global customers, including industry leaders such as Tesla, Google, and NASA, Numato Systems, an Indian original design manufacturer, is strategically leveraging its extensive distribution network, facilitated by the electronics e-commerce giant DigiKey. In a discussion with EFY’s Rahul Chopra, Samuel M, Global Marketing Manager, Numato Systems Pvt Ltd, disclosed the company’s strategic shift towards the electronics manufacturing services (EMS) sector, focusing on prototyping and research in FPGA and System on Module (SoM) technologies.
Q. Could you describe the business operations of Numato?
A. Headquartered in India, under the umbrella of Numato Systems Private Limited, we have two business segments—Numato Lab and Numato Circuits. Established in 2011, Numato Lab focuses on development and online sales of embedded-based electronic boards/modules. Numato Circuits is dedicated to EMS. We are an ODM (original design manufacturer) design house. We provide design services, electronics manufacturing services, or a combination of both. We self-certify and conduct certification processes in-house, such as COTS screening, burn-in tests, and shock and vibration tests for conducted emission (CE) certification. Our facility is located in Electronics City, covering about 2790 square metres (30,000 square feet). In the US, we are planning to have our own office to serve our customers there. This office would primarily handle operational activities, and we have plans to expand it in the near future to further support our growth and customer service capabilities.
Q. How does Numato manage to serve 14,000 customers globally?
A. We have a strong online presence. Our online store and global distribution network serve customers from across the globe, allowing them to place orders easily. We have partnered with DigiKey to sell our products. On average, we receive about 25-30 orders per day from customers around the world.
In addition to DigiKey, we are in discussions with other major distributors like Mouser, Future Electronics, and Avnet. Our goal is to onboard these three major chains by the end of this year. Besides our online presence, we have both online and offline distribution channels in countries such as Germany and Japan. We also maintain a dedicated online channel, allowing customers to explore and purchase from our extensive range of products. Currently, our website features around 250 distinct Numato-branded products. While we have a strong brand presence, our primary business focus remains on ODM services.
Q. Could you give us a brief of your EMS business?
A. We have one line that started in 2016. We mostly target prototyping customers and mid-volume production. When referring to mid-volume, we are typically looking at production runs of a few thousand units. We also offer EMS as a service to other companies and are open to serving any kind of customer. Typically, the market standard lead time for such services is around 20 to 25 days, but our lead time is just 12 days as we maintain a comprehensive inventory of components for our products, allowing our clients to bring their products to market rapidly. We’re planning to expand our manufacturing capabilities with the addition of a new line by the end of the year to enhance our production capacity.
Q. Why did you decide to have your own line instead of outsourcing?
A. The primary reason we established our own production line at Numato Labs is to effectively manage the lead times for delivering our products. By overseeing our own line, we have complete control over the production schedule, allowing us to ship products seen on our website within 2 to 4 business days. We plan and identify which products are fast-moving, ensuring that we have a minimum of 500 quantities of each board assembled, tested, quality-checked, packed, and ready for shipment.
Q. What was your reported turnover for last year?
A. Last year, our reported turnover was $2.5 million. In the context of the global business world, this figure is comparatively modest. A year ago, we didn’t have a dedicated sales or marketing team actively participating in trade shows or employing other such strategies.
Our sales primarily stem from the products listed on our website and on EFY, optimised through SEO. Our partnership with DigiKey started a year back and we have generated around $100,000+ in business within this period, solely from DigiKey.
Q. How much does India contribute in your overall revenue?
A. India currently contributes up to 20% of our overall revenue. While we had not focused intensively on the Indian market previously, we are now making strides in this direction. We have recently onboarded a few industrial automation customers from Mumbai and Thane, who use one of our FPGA boards for smart grid applications in city-to-city industrial electrical transmission lines, capable of transmitting up to 1000 to 2000 megawatts. The response time of our system during a line cut is designed to be within 33 milliseconds. The FPGA board, with its low latency and ARM processor, allows customers to implement their FPGA logic and mathematical calculations for managing the power grid. This technology is used to promptly shut down the affected substation or node station, while maintaining HSR/PRP connectivity—a redundancy protocol with RJ45 1G or 100 Mbps connections—to ensure uninterrupted service even if one link fails.
Q. How much of the revenue comes from your products vs ODM as a broad percentage?
A. Around 80% of our revenue comes from our branded products, while the remaining 20% comes from our original design manufacturing (ODM) services. In the case of our ODM services, we offer customisation based on our clients’ specific requirements. For example, when we work with a client like AMD, we develop certain boards for them, specifically their evaluation kits, system-on-modules.
Q. Do you expect more growth from the EMS/ODM sector, or will you continue with an 80/20 approach between products and EMS?
A. Currently, we are maintaining an 80/20 balance. This ratio reflects our current operational focus, as we work in a single shift. If we decide to acquire more EMS customers, it will require us to expand our labour capacity. While we might consider this expansion in the future, it is not on our immediate agenda.
Q. Where is your majority customer base?
A. The majority of our customer base is primarily located in the United States and the United Kingdom. Our first customer was from the US.
Q. Who are your end-customers?
A. Our typical customers are system integrators and embedded system developers who design and build complete systems, not circuit design engineers. These customers usually order our products in varying quantities, ranging from a few hundred to a few thousand units.
For example, in the case of our system-on-module products, one particular model that is highly sought-after for smart grid applications can see requirements of up to 5000 pieces from a single customer. This indicates that once a customer has integrated our board into their system, every system they sell includes our board. We once had an Indian customer who developed a complete rack system for smart city applications using two of our boards for each unit. This customer is also exporting to end customers located in places such as Qatar and Dubai.
Q. What is the profile of the customers whom you help in building a PoC?
A. The typical profile of our customers usually begins with engineers and test engineers who initially interact with us during the early stages of a project, particularly for proof of concept (PoC) development. As the project matures, our interactions often escalate to higher levels within the customer’s organisation. This includes division heads and product marketing personnel who then become the primary points of contact. For instance, in the case of one of our customers, a 50-year-old company, our direct communication eventually reached the level of the Chief Technology Officer (CTO). Although the initial discussions and project explorations typically start with members of the R&D team.
Q. What are the products under your own brand and who are the target customers for them?
A. Our products, under our own brand, are categorised into three major business verticals. The first category is data acquisition modules, which include GPO (general purpose output) and relay modules. These modules are equipped with industry-leading interfaces such as Modbus, USB, Ethernet, power over Ethernet, Wi-Fi, and Bluetooth. These interfaces enable users to control, configure, and monitor the relay modules. This range of products primarily caters to the industrial IoT (Internet of Things) and industrial automation sectors. They are also applicable for test jigs in manufacturing settings. An example of our product usage is by companies like Tesla, where our modules are used for factory automation purposes within their manufacturing plants, rather than in their cars.
Another significant vertical of our product range includes FPGA (field-programmable gate array) modules and system-on-module (SoM) solutions. These modules are centred around Xilinx FPGAs and micro-semi PolarFire RISC V FPGAs. One of our notable products in this category is the AMD Zynq UltraScale+ MPSoC, which is a multi-processor system on a chip. This advanced processor features a Quad-core ARM Cortex-A53, Dual-core ARM Cortex-R5, Mali GPUs, and supports H.264 and H.265 video codecs. Furthermore, it boasts an FPGA logic cell capacity that can scale up to a quarter million cells.
Q. Are the SoMs completely designed and manufactured by your teams or just assembled?
A. Yes, our system-on-module (SoM) products are entirely designed by our in-house team. This includes not just the layout but also the assembly and BGAs (ball grid arrays). We focus on building a complete system model around the chipset rather than engaging in chip-level design. We develop the entire board as a system model. The standards for SoM are primarily set by a German consortium known as SgET, of which we are a member. We use their specifications as a guideline to design our system on modules.
Till now, these SoM form factors have been tailored for traditional ARM processors, among others. FPGA modules, however, tend to be more customisable based on specific customer requirements due to the inherent flexibility of FPGAs. By April next year, SgET is expected to release a universal form factor for FPGAs too, which should further standardise and streamline the design process for these components.
Q. Where is the R&D and manufacturing of your boards conducted?
A. The research and development (R&D) of our boards is entirely conducted in India. All engineering and manufacturing processes are based in India too. However, we outsource the fabrication of PCBs (printed circuit boards) predominantly to Taiwan. This decision is not due to a lack of capability in India, but rather due to concerns about yield rates and lead times. Taiwanese suppliers are able to fabricate and ship PCBs more quickly and efficiently than their counterparts in India. In addition to PCB fabrication, every component is sourced by Numato Lab itself.
Q. Are you open to other sectors like automotive and robotics or limited to drones only?
A. We are certainly open to collaboration in these areas. We are gradually expanding into the automotive sector. Currently, we have clients such as Ford, Tesla, who purchase our relay modules for use in their manufacturing plants. Our focus remains primarily on industrial applications and our products are relevant in the context of Industry 4.0. If a customer approaches us, we are fully prepared to work with them. We are even open to pitching. We are planning to conduct a series of webinars with Microchip and Future to showcase our capabilities. Our platform is versatile and designed for a broad spectrum of applications. I highlighted the focus on drone customers because we already have a partnership in this sector. Moreover, one of our products, the Spartan 6 module, is currently being used by a Swiss medical equipment company. They employ it in endoscopy applications, which require handling multiple camera inputs and controlling the stepper motor of the endoscope. This process is executed using our FPGA.
Q. Do you have to get medical grade certification in such cases or do customers get it themselves?
A. The customers are responsible for obtaining the medical grade certification. As a system, they will ensure that the necessary certifications are in place. From our end, we provide the basic CE and ROHS certifications for our products.
Q. Do you provide any kind of presale samples?
A. For our data acquisition models, we require customers to purchase samples, as these products can range in price from a few hundred pounds to even a thousand pounds. However, if we identify significant potential in a collaboration or project, we are open to offering special discounts to these customers.
Q. Are there any plans for an IPO?
A. Currently, we do not have immediate plans to go for an Initial Public Offering (IPO). Maybe in the future, but not any time soon. We might consider it in around 4 to 5 years.
Q. What is Numato’s take on RISC-V technology?
A. There are several advantages and drawbacks. The advantages include lower chipset prices compared to ARM processors. With ARM, there is an indirect licence fee, but RISC-V does not require a royalty fee. The drawbacks are that ARM is a well-established architecture globally, while RISC-V is still gaining traction.
There are fewer professionals in Numato experienced with RISC-V, and there is limited availability of sample codes and resources. Regarding RISC-V processors, we have one from Microchip PolarFire. It’s a quad-core RISC-V processor with an FPGA logic cell. Currently, we’re working with several drone customers to port Microchip’s FPGA IP code for stepper and drone motor control, as well as object detection and surveillance. These IPs have been proven in one of their evaluation kits.
Q. What is your area of focus for the future?
A. Our future focus will primarily be on building expertise in the FPGA (field-programmable gate array) domain and expanding our range of FPGA systems. We are looking to integrate more system-on-chip (SoC) FPGAs into our product line. As of now, we have four system-on-
module products and a few evaluation kits centred around Xilinx 7 series FPGAs.
Q. Which segment do you expect your next bench of growth from?
A. Currently, we are expecting more growth in the Numato Lab segment, focusing on our products. Although, we are also planning to gradually increase our business with Numato Circuits. Currently, about 20% of our business revenue comes from this segment, operating with one line. We are planning to add another production line. Considering the operational costs and other factors, our goal is to scale up this segment to account for 35 to 40% of our business. To achieve this, we are setting up a dedicated sales team that will actively seek and engage with export customers for our EMS services.
Q. Could you tell us something about the founders of the company?
A. The company has three directors—one is responsible for all operational aspects, another key person sits in the US, and the third one serves as our CTO. One of the main reasons we have a strong customer base in the US and UK is due to our CTO’s efforts in the US. For instance, Google was one of our notable customers. We designed a custom FPGA board for them using crowd-supply funding. This was around 2013-14, a time when there weren’t as many options for integrated audio-video systems in conference rooms as there are today with tools like Microsoft Teams or WebEx. We created an FPGA board capable of handling six camera inputs and various other inputs, offering overlay adjustments and more. Google purchased multiple units of this hardware for their offices.
