How has the pandemic changed the game for semicon majors like Renesas? How do they view the acquisition of Arm by Nvidia? To get answers to these questions, Rahul Chopra spoke to Dr Sailesh Chittipeddi, EVP, GM of Renesas’ IoT and Infrastructure Business Unit. Here’re the extracts of their discussion…
Q. Can you share some of the key strategies that have been outlined after COVID-19 and how things have changed?
A. One of the biggest trends that we see is that there is a big push towards more bandwidth consumption. For example, Netflix consumption or web consumption, Facebook or even text messages, most of them have gone up by over double-digit percentages in a matter of months. That has driven up quite a bit of data centre spend for the major players like Google, Amazon, and so on and so forth. And that has been helpful for us because we have a presence in both the power as well as in memory interface products.
There has been an increased focus on healthcare and the environment, whether it’s lowering the spO2 levels or measuring it. There is a correlation between the SpO2 levels and COVID if your oxygen levels drop alarmingly. So, that has driven interest in our products, especially around bio-sensing and around ventilator systems.
And then personal mobility, with the move towards electric vehicles, less polluting activities have taken hold. On the industrial side, certainly smart metering brings more efficient energy consumption. Surveillance and voice user interface (VUI) have been big and will grow as people are moving away from touch buttons. So, these are the major trends that we have seen. Fundamentally, the push is really towards data-centric, all the way from the front-end to the back-end.
Q. Has that resulted in the launch of the products also, as in, some products being accelerated whereas others being put on the bench or is the production as usual with just the demand that has increased?
A. A little bit of both. The demand has certainly increased. The need for laptops and personal computing has really gone up dramatically. Even in the U.S., there are a lot of regions where school children cannot afford a laptop or a notebook. So there has been a big push for Chromebooks, where school districts have been placing big orders from our customers.
In terms of investment, we have emphasised a little bit more on things like voice and surveillance and trying to get out some of the products out a little bit quicker. For example, our 48V scooter and e-bike solution, which we have pushed forward a little more aggressively than we would have in the past. Same for the ventilator with all the components and putting together the complete solution. So, I wouldn’t say that we have slowed down on anything per se, but we accelerated some to take advantage of some of the six scenarios that we are seeing.
Q. Somehow Renesas was launching products at a very high frequency during the COVID times while everywhere else there was silence except for a few other brands. So how did you manage to pursue that and what best practices did you follow to make sure that new innovative products kept coming out?
A. We were trying to make up for the lost time. One of the challenges for us was that we were late to launch our Renesas Advanced (RA) Arm-based microcontroller family in the 2018 timeframe. So, we launched that MCU family in October 2019 and followed it up very rapidly with a whole set of RA MCU products and more RA MCU ecosystem partners with ready to use partner solutions so that we can significantly expand our portfolio. And then we went out and addressed the gaps that we had in our portfolio early-on in a hurry.
One of my messages to the team has been that customers will always remember how you have served them during challenging times because challenging times always allow for the formation of best relationships, whether it’s between people or whether it’s between organisations. The one message I have always told people is that this is the time when we have to out-serve the competitors, whether it comes to new products or the supply chain. And we have used that to make a big effort across the organisation. People recognised that we had gaps, so we invested in filling up our portfolio.
Q. Any interesting products or latest innovations that you would like to highlight, which you believe are game-changers that differentiate Renesas from others and provides a unique value that a design engineer and their bosses should notice?
A. I like to think that most of our products are interesting and highly differentiated, including our MCU and increasingly our MPU families. On the MPU side, we have something called the Dynamically Reconfigurable Processor (DRP) technology that is basically a feed-forward-based neural technology that is very effective for things like facial recognition, object recognition and things of that nature. So, it’s an AI-based technology that makes a ton of difference relative to the competitors. For example, it provides you essentially a Jetson NVIDIA-type GPU at high-performance with a fraction of power and cost. So, it’s hugely differentiated. If you were to ask me on the MPU side, I would certainly say the DRP or e/AI technologies. And on the MCU side, security is a big differentiating feature for us. And then there is the RE Family using Renesas’ proprietary Silicon on Thin Buried Oxide process technology, which dramatically reduces power consumption for energy harvesting applications. And, of course, Renesas has a broad portfolio of performance and efficiency-based power and analog products that create an advantage for our customers.
Q. Any specific customer segments who stand to benefit from the DRP MPUs?
A. The RZ Family MPUs are good at certain scalable solutions such as picking up a face in a crowd and tracking that face through the crowd with powerful performance and high-efficiency. We are aggressively going after certain verticals like surveillance and preventive maintenance, which involves repetitively looking at defects. It’s better than a human eye to some extent as the human eye will get tired after a while. But these systems can keep going on.
Q. Coming to ARM being acquired by NVIDIA, how is that affecting the Renesas strategy now? How do you see that getting played out?
A. First, I would say there is a finite possibility against the deal occurring as the regulatory authorities may have concerns. But assuming that happens and based on the discussions we’ve had with Arm, they have been pretty clear that they are still going to be on an open-licensing model. We recently announced our first implementation of RISC-V-based solutions which will begin sampling to customers in the second half of 2021. And these are primarily MCUs that are going to be application specific solutions through which we will attack motor control and voice markets. Beyond that, we have proprietary 8-, 16-, and 32-bit microcontrollers as well. We have the RX and RL78 families, which have been around for a long time. So, our customers do not have anything to fear relative to creating major disruption.
On the other side, there are other GPU providers such as Imagination Technologies that do provide cores. So, if we needed to pivot, we would on the MPU side. But we don’t feel a compelling need to do so at this point of time because Arm, as well as NVIDIA, has been very clear that it will support an open-licensing model. But obviously, you don’t want to be caught working with somebody with which you are competing in another area. That brings a bit of a disadvantage. So, we need to be careful. I must add that we had already taken up some steps to come up with some RISC-V-based products, even before the NVIDIA news was announced.
Q. That brings up the question, how do you see the future of RISC-V?
A. I think people wanted an open-source architecture anyway, primarily because the licensing fees were going up. So, there was a natural move towards that particular direction. And I think that the RISC-V movement, thanks to such a deal, is going to accelerate. The advantage that the Arm ecosystem has and will continue to have for the next several years is really a huge ecosystem of support that has been established around it. No matter what, it will still take time for any organisation to develop that kind of infrastructure support. It will take a while for anybody to replicate it. If Arm is true to its word of being an open-system architecture, then that is no big deal. But it’s always good to be careful since we as companies are at the receiving end of things.
Q. Where are all your R&D teams spread? Is there a team in India also?
A. Earlier there wasn’t but now there is an R&D team in India. We are establishing a footprint in Bangalore primarily for RF and timing devices that have very good capability. And we have leveraged our partnership with a company called Steradian. We have always used India-based design outfits and worked with companies like Tata Elxsi, HCL, Sankalp, TCS and so on and so forth. We have always worked with these companies, but we have decided to establish a good footprint in India considering everything that is going on in the trade dimension, which is helpful for us.
Q. Is there a roadmap for India that you would like to share now or is it under progress?
A. For RF, we certainly have a very compelling roadmap. A lot of our millimetre wave activities are currently done in India. By millimetre wave, I don’t mean sub-6 GHz but millimetre wave that is 28 GHz and above. We are also working on some of the timing activities in that area and also looking at setting up a stronger presence in (Bangalore) India for that activity. Radar activity also goes on there.
Q. How do you see India overall? You have mentioned that you intend to set up a dedicated R&D facility and is a sales definite sales destination. So, am I correct to assume that e-bikes and surveillance are the two key markets or are there other markets also that you see some growth in?
A. There are other markets too that we see a growth in. Bio-sensing is one. Due to the coronavirus, getting cheap healthcare to people and air-quality monitoring is going to become much more important. Our team is going after a range of customers in IoT, mobility, medical, consumer, infrastructure and industrial sectors. It is quite exciting.
My view is that India is an untapped market in terms of electronics reach. And the potential is just enormous. So, in addition to the R&D, for which we have established a footprint, we have plans to work with emerging companies like Ather as well as established where we already have an established footprint. The reach is going to be quite significant and if India sets its mind to build the white boxes themselves, then I think it will be a massive gamechanger for us. If it starts to do some of the things that are done in Taiwan, including the product design specs, then it will propel us to the next level.
“My view is that India is an untapped market in terms of electronics reach. And the potential is just enormous.”
Q. Do you see IoT as a buzzword or a real market opener?
A. That’s a good question. To me, any edge or endpoint device is fundamentally IoT. Are more devices and more sensors getting connected across the globe? Yes absolutely. Without a doubt, we are marching towards 1 trillion connected devices in the not too distant future. It doesn’t matter to me whether you call it IoT or connected sensors. The trend is already there.
For us to capitalise on that market, it boils down to having all intellectual property that is needed for it. Companies will not be able to go very broad in this area and that is the fundamental challenge in IoT. There’s no single company that is going to dominate every vertical because not only we need to have the sensor solution, you also have to be able to interface it to something else in order to get it to operate. If it’s a smart home, whether it’s a Google Nest thermostat or something else, it needs to interface with another device and the software. So, you have to decide these are the verticals I’m going to go after. Like in India, we are going after smart metering. Motor control is another great vertical that we are pursuing.
Q. There’s a lot of talk around smart appliances happening in India. And as per a recent study, there is a prediction of around 18% CAGR for the next 5 years. So, with respect to India, what are the plans around industrial or IoT? How do you see leveraging that space?
A. I believe industrial is going to be the mainstay. We have started to make an entryway into the consumer market in a reasonable fashion. But going after the mass consumer market in India, focusing on a smartphone or an IoT device, is going to be challenging especially from a cost point.
We are working on things like voice recognition on appliances, making them intelligent. We went after metering, which is a traditional business in India, and where Renesas has dominant market share. We are now pursuing opportunities, which offer substantial volume. So, motor control is one of them and we will pursue that for the consumer applications. Yes, IoT is coming in and people are talking about a lot of smart devices in the consumer space. But we are yet to see the volume built-up. Also, there are challenges in making these devices more intelligent given some of the challenges on multiplicity of languages and connectivity issues in certain regions. There are companies such as Muse, Titan, Atomberg and Wipro that are challenging the IoT space and making the end-devices more intelligent. We are working with them and creating solutions for the Indian market. But that will take time to take-off in India. We do see some technical challenges. The multiple languages, accents and ambient noise in India create unique challenges in voice recognition. So, we are trying to refine the algorithms that we are building specifically for the Indian market. In summary, we are working on those, but it will take a few years for us to get into the volume zone and manufacturing the end-devices in India.
Renesas has been a key player in the biometric smart card — in relation to AADHAR biometric authentication, we are the first vendor to get our MCU L1 pre-certified for hardware fingerprint identification scanners. There are multiple local and worldwide fingerprint device vendors now in the process of their device (scanner) certification using our L1 certified MCU chips.
“I believe industrial is going to be the mainstay”
Q. What is the unique challenge in this particular solution that has been developed? Is there some specific challenge that your solution has solved to get L1 certification?
A. All the encryption that happens in the solution is on the end-device and then is transferred to the PC and then to the cloud. So, you are not taking the connection to the PC and then encrypting. That is the key difference in L1. It is much more secure.
Q. These devices are going to be launched through your partners? If the thing goes on, then the certified partners will be creating their solutions and supplying them to UIDAI?
A. Banks are potential customers and so is the passport ministry. We also have many other public sector organizations that are potential customers. The companies that are supplying the end devices are Mantra, Gemalto and others. Gemalto has applied for certification already with their end-device using our encryption solution. Once the L1 standards are mandated by UIDAI, the demand will explode. And we are waiting for that.
Q. Is there any timeline that they have given or shared?
A. From the UIDAI perspective, they need three end-customer certified before raising the standards. So, we are working with our customers to get them accelerated on certifying their end-devices on L1 standards.
Q. Coming back to Industrial IoT, it seems to be one area where ROI seems to be getting better as seen in India and globally. However, when we talk to SI’s we are told that a lot of POCs are happening, but the action is slow. Since you are supplying the underlying technologies, how do you see that develop? Any particular geographies like Europe or the U.S. that have taken the lead?
A. For industrial IoT, the areas that are doing well are Japan, Europe and then the U.S. China has an interesting growth story for a variety of reasons, including the fact that they came out of COVID crisis much faster than a lot of other regions in the world. One of the areas that they do continue to surprise a lot of people is in AI. The number of dialects that are there in China (certainly not as complex as in India) are vastly different. They have AI companies like iFLYTEK and so on that are really advanced when it comes to voice recognition-based AI technologies. So, China is probably far ahead of India when it comes to industrial IoT although it is starting to pick up in India.
Most of the advanced robotics is largely happening in regions such as China, Japan and the U.S. The traditional base of industrial customers has largely been European, Japanese and the U.S. to some extent. However, China has been increasingly very aggressive in terms of industrial companies that adopt new products quickly. The advantage that they have is that they move extremely fast and don’t require the 10/15/20 year lifetime reliability cycles, which the traditional players require. They understand that most of these products would not last more than 7-8 years before you will have to upgrade them to the next version. So, watch that space as there is going to be a big set of disruptions including digitisation, which will get hold of that market over the next 5-10 years and major new players will emerge.
Q. A huge discussion and debate is happening in India about whether the Indian government should invest in the fab. Some companies support investing in fabless while others are saying strategic benefits are there. And the U.S. has taken a particular stand with respect to this area. So, having seen the entire silicon ecosystem from pretty up close, what would be your take on that topic? Should the government go ahead and invest in it or stick to fabless?
A. India has tried before investing in fab and this isn’t the first time. If we take a look at the history of countries that have been successful in introducing fabs such as Taiwan, which started investing in the late 70s and early 80s, it took 30 years of learning to become what they are now. There is no short-circuiting that process. They have the companies and supplier base, despite being located on a small island, which is a fraction of a vast country like India.
China has repeatedly tried to establish fabs, with far more resources than India, to be successful in the wafer fabrication area. And they are still several decades away from getting there. So, the question is do we have the long-term vision to establish US$ 70-80 billion worth of investments? It is critical to identify the vertical after which you want to go after such as communications and enterprise infrastructure and then start establishing a company that will build the systems. If it’s 5G, then there is a perfect opportunity with Open RAN systems to establish a company in India that will set up its own telecom infrastructure. Open RAN is hugely disruptive versus traditional telcos. If you do that, then you will naturally start establishing fabless players and others that will support that ecosystem and set up the entire manufacturing system for it. But, without identifying which vertical (to pursue), you won’t establish a strong footprint. The semiconductor industry in India will be challenged. Huawei became what it is today because they built the boxes, and that set up Hi Silicon, which led to set up other companies.
Q. Medical-tech is a priority area for MeitY. So, would your thought be then that if medical tech is identified, then India should invest in the fabless companies around medical tech?
A. Yes, exactly. And then the systems, software and everything should be built around it to establish a dominant presence in that market, so the country gets known for it. Just like China established Huawei and ZTE. Secure communications are important. That would be the other area that would make a ton of sense for the government to go after. And that will set the industry up itself. It won’t need any impetus from a massive government investment other than to be done domestically.
