March 13, 2013 – Mobile Semiconductors: In Search of the One Chip Solution
Portable devices will eventually push PC architecture into its dotage. This paradigm shift is creating huge opportunities for semiconductor companies, with processors, modems, radios and sensors the biggest categories, and with footprint and power efficiency paramount design considerations, as device OEMs cope with increasingly demanding apps, evolving wireless standards, and a growing roster of spectrum bands. Within this, the processor drives much of the measurable performance of the device, and device makers have largely standardized on ARM’s widely licensed core architecture, leapfrogging each other generation to generation. Chip makers have 3 main competitive levers: integrating multiple elements onto a single “system on a chip” SoC; delivering superior design for elements of the solution; and exploiting proprietary manufacturing process advantages. Qualcomm was first to integrate an LTE modem to its SoC, which has added performance advantages from its proprietary ARM-compatible processor vs. rivals, including Apple and Samsung, using ARM’s reference designs. Intel’s new 14nm process is inherently faster and more power friendly than the 28nm used by Asian foundries, but its CISC architecture wastes much of that advantage and is incompatible with the favored ARM standard. Qualcomm is also playing for the lead in radio chips, recently announcing a 40 band RF solution that allows OEMs to support most carriers with a single device.
Portable device architecture is becoming dominant. Smartphones, tablets and keyboard equipped devices applying the same network reliant philosophy, are on a trajectory to squeeze out PCs and other older era platforms, first with consumers and, eventually, in the workplace. This paradigm shift, which includes the integration of portable device architecture into products like vehicles, appliances and TVs, is creating huge opportunities for semiconductor makers.
Processors, modems and radios. The main categories of portable semiconductors are central processors, graphics processors, baseband modems, radio transceivers (RF) and sensors. Most OEMs have built their software for the widely licensed ARM processor standard, establishing a serious hurdle for vendors, like Intel, with alternative processor architectures. Modems must cope with rapidly evolving wireless standards, and the variants that pop up, rewarding serious wireless chops. RF is growing more complicated, with a global expansion in the bands dedicated to wireless forcing radios to be able to tune to a much wider range of frequencies. Sensors – e.g. cameras, touch screen controllers, etc. – are a fast growing category with new functions – e.g. gesture recognition, environment and vital sign monitors, etc. – likely to emerge.
Low power, small, powerful and cheap Portable architecture raises the importance of power efficiency and footprint for chip makers looking to exploit the paradigm shift, while the performance and price of the solutions remain obvious selling points. The fast product cycles of the portable device market also reward vendors that are able to bring new solutions to market quickly, maximizing the time that an innovator can exploit advantages as rivals move to leapfrog them with their own new solutions. There are three main levers that semiconductor players use to gain these advantages: integration, design innovation, and process innovation.
Integrating to a System on a Chip (SoC) Replacing multiple chips with one saves a lot of space and power in a portable device. Current leading-edge SoCs feature multiple cores. For example, Samsung recently announced its Exynos Octa, combining four high speed cores with four low power cores, separating tasks with different needs to maximize performance without taxing battery life. Most high end SoCs also integrate graphics processors. Qualcomm was first to integrate an LTE modem to its SoC, helping it gain a dominant position in smartphones. To date, only Nvidia has announced similar capability. The ultimate SoC would also integrate analog RF with the digital processors and modem, a difficult challenge requiring a tricky mixed-signal process and a very complicated design. In the interim, chip makers can combine SoC and RF chips into a single package, an improvement over the entirely separate configuration.
Design leadership. Mobile processors, modems and RF are complicated, giving chip makers opportunities to differentiate based on innovations in the way the circuits are laid out. For example, most SoC vendors, including Samsung, Nvidia, and Apple, license ARM’s Cortex reference designs, integrating the standard cores with proprietary logic. Qualcomm takes it one step further, using its own compatible Krait processor design for its cores, a choice that gives it slight footprint, power draw and performance advantages. Qualcomm also recently announced an RF solution that supports 40 different frequency bands, allowing device makers to support most of the world’s wireless carriers with a single radio configuration, a considerable benefit.
Process innovation. Reducing the size of transistors on a chip improves its speed and reduces its need for power. Improvements to fabrication processes enable these smaller geometries on a typically predictable development trajectory. Today, most high performance chips are manufactured 28nm processes that will hit a physical limit with next move to 22nm. Intel has solved this problem with a 3D process that will allow it to build parts at 14nm 12 to 18 months ahead of its rivals. This may improve Intel’s SoC performance by more than 50%, an advantage partly mitigated by the inefficiency of its complex instruction set (CISC) design. We note that most device OEMs have considerable investment in ARM architecture, and Intel’s process advantage does not appear long lived enough to break ARM’s hold on the mobile market.
Qualcomm is the likely big winner in SoC. Qualcomm has design leadership in processors, modems and, as of its recent announcement, RF. This leadership, combined with its head start in SoC integration and lucrative IPR licensing business, gives it real advantage, even as device makers like Apple and Samsung push to vertically integrate. Nvidia has been a step behind, but has strength in graphics processing that has played well in the tablet market. Qualcomm’s 40 band radio has the potential to leapfrog the 4 traditional RF players – RFMD, Triquint, Skyworks, and Avago. The sensor market is still undefined as new applications emerge, but OmniVision has established itself as a leader in camera sensors. We are not optimistic that Intel, Texas Instrument, Broadcom, and others are positioned to challenge for leadership.
For our full research notes, please visit our published research site.