New Approaches Will Deliver in Consumer Electronics

But to achieve these interrelated goals, semiconductor companies need to overcome various obstacles. One is that they tend to be myopic, selling chips to device manufacturers without learning more about what's really driving the CE industry. The rather straightforward market transaction — providing chips for placement on circuit boards and then housing them in a gaggle of devices — is well-defined. In itself, however, it is no longer among the most innovative and forward-looking CE market opportunities. Finding new and creative intersection and connection points of the semiconductor and CE markets are much bigger opportunities. These include:

• Landing a seat at the table with top executives — Semiconductor professionals need to be much more deeply involved in strategic industry, technology roadmap, capabilities and standards discussions among various ecosystem players. This access and participation will help them generate new ideas and develop better insights about how their semiconductor companies can sell more chips. No doubt, millions, perhaps hundreds of millions, of more chips are going to be needed during the next few years. The question is what kinds of devices, at what performance levels, in what portion of the network, in what quantities, and within what time frame? By leveraging creativity, persistence and access to much more cutting-edge information and major industry executives, the financial payoff has the potential to be big.
• Managing risk — Once chips are designed into CE devices, semiconductor players need to do a better job of managing risk. If they decide they want to target all of their chips, software and hardware toward one CE platform, they need the design to be as open and interoperable with as many devices and as much content as possible. More connectivity can mean more chip sales. And they need to think ahead about ways to help confirm that once they get designed in, they don't get designed out soon thereafter in the next generation of products. From a product cost management perspective, it may be wise to decide to buy various parts of the overall reference design from other companies rather than pay capital expenses to produce them themselves.
• Taking a bundling/platform approach — Semiconductor companies need to develop and use a new, highly integrated and bundled platform-based R&D model; help confirm that the technology platform protocol stack blends hardware and software that can be reused for various CE applications, thereby lowering product development costs and accelerating time-to-market deliveries. This also helps confirm that the bundled platform can be scaled, meaning it can be used as the underlying technology for current and future CE devices — avoiding "reinvent the wheel" inefficiencies. Product innovation models must be accelerated and deliberate for R&D spending to result in a greater number of breakthroughs, as well as provide well-defined boundaries within early concept and product designs.
• Enabling interoperability and more collaboration — These companies should enable interoperability throughout the CE ecosystem. This entails facilitating the market creation of collaborative and bundled, standards-based product reference designs. Also key for semiconductor business models are backwards-compatible migration paths and embedded software for standards-driven interfaces.

To capitalize on these multiple opportunities, it is key to understand that a silicon and CE combined platform consists of much more than a chip and circuit board. It also consists of a shared silicon architecture; a shared operating system; digital TVs, cell phones and PC interoperability; shared application programming interfaces (software); user and interface tools; media interoperability; digital content and subscription services; original equipment manufacturer brands; user interface and platform software; ergonomic designs; and product innovations.

The CE industry is changing, so the semiconductor industry must change with it. It's time for an open-minded, fresh and enlightened approach to make both industries more successful.