Trends shaping the semicon industry: Going green, health and connectivity

In an interview with ECN Asia, Henri Richard, Senior VP and Chief Sales and Marketing Officer of Freescale Semiconductor Inc., discussed the current semiconductor trends and the latest developments of the company. Excerpts:



When Motorola cut back on its chip purchases for mobile phones due to sliding market share, Freescale's sales fell drastically in the first nine months of 2007. Overall, how was the semiconductor business for Freescale last year?

Last year was a mixed year. We have successes in the automotive and in the networking space, so we could look at the year as fairly positive. But there was a cloud in the sky, which is, our largest cellular customer Motorola hitting really tough times. That put a little bit of a negative spin for us on the whole year.



How do you plan to come back on the mobile phone segment, especially now that Motorola has added Qualcomm to its roster of handset chip suppliers?

First, I think it is good news that the relationship between Freescale and Motorola, which used to be the same company, has evolved and matured to one where we are now, us being a valued supplier and them a valued customer. The first thing we need to do now is to continue to do everything we can to help them. We have now a very important partner that’s going through tough times, and it is our responsibility to do everything we can to help them. Second, we need to diversify our portfolio. They felt that having a single supplier was not the right strategy for the future, and we feel that having a single customer is not the right strategy for the future. So we can look at the evolution of the relationship as one that is mutually positive. For me, the priority is to find other large customers for our cellular business. We do have others, but not to the extent that I want.



What are the trends that will spur future growth for Freescale?

Three “mega trends” are reshaping the industry. First is going green. Today you can’t have a conversation without the topics of energy efficiency and power consumption. The second one is the aging population worldwide. Increasingly, people want to live an active life later in their years. The challenge now is how devices can help them do that. Lastly, the Internet has made pervasive connectivity a must-have. It is going from us wanting to be connected all the time, to making all devices connected.



How is the company positioned to meet these new challenges?

Those “mega trends” are our key initiatives. We are focused on making sure that whatever we do – how we engage our customers, how we position our products, and how we think about our new product introductions – are in one way or another supporting those trends. We are well known for our microcontroller business, but we are developing our analog and sensor portfolio as well. We are an important player in network infrastructure, as well as in cellular connectivity. We are where we need to be.



How difficult is it to drive innovation in the automotive market?

It is a very exciting market where innovation is easy to get to. When you think about the electronics content of cars, it is going through the roof. Of course you have traditional applications like the ECUs [engine control units]; but they are getting more sophisticated because one way to improve mileage is by having much more intelligence into the combustion cycle. Even in the traditional electronic application, innovation is key. Cars are going to be increasingly fly-by-wire. We now have electric steering, radar detection and obstacle avoidance. In the security area, we have breath analyzers that will make a car refuse to start. And then of course you have the entire infotainment. The sky is the limit in automotive electronics innovation.



Where do you see wireless technology going and how do you plan to grab a significant share of the market?

There’s a big debate on 4G – LTE vs. WiMAX. We are not part of the debate; we are part of both solutions. I think they will eventually evolve into standards that will be used probably differently depending on application, whether it’s voice, data, and how you are going to use it. They both have valid technological advantages in the marketplace. It’s a cyclical market. Even though 3G has been existing for a long time, there are still a lot of work for the next three to four years around 3G, and then we’ll move on to LTE. The train never stops. For us, whether it is going to be a WiMAX world or an LTE world, when it comes to network infrastructure and wireless infrastructure, we are very well positioned – particularly in Asia, where we have great relationships with Huawei, ZTE, Datang, and Ericsson, among others.



Freescale’s networking roadmap is going after multicore in 45nm. How’s your progress in making 45nm chips?

As part of the IBM Alliance, we are blessed to have a strong partner in Singapore, which is Chartered Semi. I can tell you that every one of our milestone relative to our 45nm roadmap is met. We are optimistic about where we stand and very pleased with our execution. We are moving quickly to multicore, and there are some challenges in manufacturing, of course, of those chips. The most important challenge is software, so we are working on that problem.



How important is Asia in Freescale’s business plans?

Asia is already 50 percent of our business, more or less. It is growing faster than anywhere else in the world. It is where everything gets manufactured. And increasingly, it is where most things get designed. The customers, partners, and opportunities are here. If you are not successful here, what you do anywhere else becomes irrelevant.