January/February 2005

By Michael Grebb

Consumers are a testy, finicky, demanding, unforgiving bunch. They want everything possible packed into their consumer electronics devices. And they want the power to do just about anything, all with the convenience and sleekness once reserved for prototypes and cutting-edge corporate hardware. Oh, and they want it all without paying very much for the privilege.

For CE manufacturers, this insatiable consumer appetite presents both challenges and opportunities. And because features are quite literally the sum of a product`s parts, the semiconductor industry may very well hold the key to keeping consumers satisfied now and

in the future. ``Success is more tightly correlated to the user experience than anything,`` says Dan Davis, consumer entertainment segment manager at Cambridge, U.K.-based ARM, which licenses designs for RISC (reduced instruction set computing)-based semiconductors.

In other words, all the technology and features in the world won`t matter if the consumer isn`t happy. ``There are semiconductor companies that can build anything you want,`` says Stephen Marlow, executive vice president at Toshiba America Electronic Components, headquartered in Irvine, Calif. ``But if it can`t satisfy the end user, we aren`t going to realize the true potential.``

That`s a lot for CE manufacturers to take in. So much so that CEA and Horizon Events are sponsoring a set of forums designed to help attendees of the 2005 International CES in Las Vegas examine these issues first hand. The Enabling Technologies Forum (see sidebar) will deliver three days of briefings on semiconductors and component technologies, featuring dozen of tracks.

Chips Make CE More Like PC

All of this attention on chips and platforms highlights one reality: The chip industry is so large and diverse that CE companies often struggle to find the perfect vendor mix. Nonetheless, success has been rewarded: Smart packaging has spurred many smaller portable devices with multiple functions, all drawing upon less power to conserve battery life. In the living room, chip advances also have led to new classes of devices such as digital video recorders, DVD recorders, HDTV receivers and more. And all of these products are constantly improving with larger memory caches, faster processing speeds and bigger storage drives.

Of course, most consumers simply want features that make their lives easier or more fun—with minimum hassle. They want devices to work seamlessly from the get go, even as CE devices become more ``PC-like`` every day. Intel, which has historically focused on PCs, has started creeping into the CE space with a decidedly less geeky outlook. ``As these devices move from the den into the living room, the usage changes,`` says Herman D`Hooge, innovation strategist for Intel`s platform group. ``It becomes more of an interactive entertainment experience… Consumers have evolved in their behaviors.``

In late 2004, Intel`s equally PC-centric rival Advanced Micro Devices (AMD) began marketing a new music workstation with partners Hewlett-Packard and Yamaha. Using the Sunnyvale, Calif., company`s new 64-bit processing technology to achieve high-resolution digital audio, ``you can record Eric Clapton as well as a garage band,`` says Charlie Boswell, AMD`s director of digital media and entertainment. ``You can put more performance at the fingertips of the composer.``

Such specialized products don`t always serve mass consumer markets, but they suggest a convergence of sorts. This convergence creates a willingness by even PC-centric chip companies to dip their toes in the increasingly interactive CE space. Of course, many chip companies already focus on the world of consumer electronics. For them, innovations are aimed at improving existing devices in ways that allow manufacturers to differentiate their products—and make sure they interact well with each other and their PC cousins.

Making it Work Together

In fact, CE integration has become a common theme among chipmakers intent on emulating the easy connectivity that now pervades the computer space. ``We want something like the USB experience,`` says Todd Antes, director of marketing and business development at Philips Semiconductors in Eindhoven, the Netherlands, referring to how different computers and software can communicate via now ubiquitous ``universal service bus`` connectors. Although many CE products now include USB and similar ``firewire`` connectors for computer compatibility, they can face more difficulties trying to talk to other CE devices. Often, special converters and other workarounds are required, which ends up simply frustrating consumers. ``If it`s difficult for the average user, it`s not going to happen,`` Antes says. ``And that`s a barrier to market growth.``

Of course, several standards groups are fast closing the gap to make wireless and wired CE compatibility commonplace among disparate products and manufacturers. And chip companies, which must design their wares around the protocols devised by these groups, are increasingly involved. ``That`s where you can work on the fundamental changes to fix problems,`` Antes adds.

This convergence creates a willingness by even PC-centric chip companies to dip their toes in the increasingly interactive CE space.

Says Toshiba`s Marlow: ``The battlefield today is the so-called convergence, ubiquitous computing, anytime-anywhere on the go, but we are still struggling with the standardization.`` One area Marlow says CE manufacturers should embrace mightily is the automobile, where DVD players and even video gaming systems are gaining new ground. ``Everything that you ever wanted is going to be accessible through your car,`` he says. ``It`s not your dad`s Oldsmobile. It`s a mobile media and work center.`` He says that even today`s backseat DVD players are rooted in consumers` desire to make their lives easier—not necessarily an intellectual love of electronics and gadgetry. ``It`s really being driven by the experience,`` he says. ``We as parents don`t want to hear, `Are we there yet?```

Chip companies are fast adopting the flexibility necessary to serve multiple markets with different needs—whether it is the automobile, home electronics or mobile device industry. And more than ever, CE manufacturers are demanding that products be flexible. After all, who wants to upgrade their in-car navigation system every year or find out that their digital video recorder has become obsolete? ``It`s horsepower with reconfigurability,`` explains ARM`s Davis. ``You have to be able to reconfigure on the fly.`` Chips, therefore, must be able to evolve as consumers change their habits.

Chips are also evolving into multi-processor designs to efficiently process many different high-level functions. ARM`s new ``NEON`` technology, for example, gives devices the flexibility to process multiple combinations of video encoding and decoding, 3-D graphics, speech processing, audio decoding, image processing and baseband functionality. It`s specifically designed for the new crop of multiple-function gadgets. ``As the requirements for the RISC processor gets more and more demanding, you start to push what it can do,`` Davis says.

The Role of New Materials

Also in the mix are the materials makers, which supply the silicon and other materials needed to help chips push the limits of physics, lithography and other design aspects. As chip speeds increase exponentially, they tend to run hotter, which can result in reliability problems. Sunnyvale, Calif.-based Honeywell Electronic Materials now produces new ``thermal interface materials`` designed to dissipate heat generated by processing-intensive chips. ``They`re the first line of defense for removing heat from the chips,`` says Paul Raymond, Honeywell`s vice president and general manager.

Heat also can change the shape of dyes used to etch the microscopic circuitry on chips, which also can affect reliability. In response, Honeywell has started designing ``phase-change materials`` that adjust their dimensions as the dye changes shape. The company is even researching diamond-based composites that might further reduce heat levels. ``That`s how severe it has gotten,`` he says.

New materials are helping to drive improvements in all kinds of semiconductors. Photon-based chips, which drive LED (light emitting diode)-based technologies used in some projection TV sets, now use composites that enable more specific wavelengths of light for better color performance. ``We can use materials today that we didn`t have a few years ago,`` says Jeff Henderson, vice president of business development and group marketing for Palo Alto, Calif.-based Agilent Technologies. ``It`s the ability to more efficiently convert electrical energy into photons…. The big difference is the materials we use.``

By combining ultra-thin layers of indium gallium phosphide, indium gallium nitrate and other exotic materials, Agilent pushes the envelope of performance further every year. Eventually, the company plans to use lasers to create colors nearly as vivid as real life. ``It could mean just amazing color,`` he says. ``You would really feel as if you`re literally out there.``

Differentiating Product with Chips

Consumers, of course, are happily oblivious to all of these details, even as their desires ebb and flow with the times. Take digital cameras, which are flying off shelves. For years, manufacturers were obsessed with beating each other on picture quality, heavily marketing the number of ``megapixels`` that determine the crispness of a digital camera`s photos. But as chip innovations have led to affordable five-megapixel cameras and beyond, quality is reaching a saturation point with manufacturers.

``Now they are looking for features,`` says Edward Woytaszek, a marketing manager at Norwood, Mass.-based Analog Devices, which makes analog, mixed-signal and digital signal processing (DSP) integrated circuits. ``But it has to be done at a cost that meets the customers` expectations, which seem to change on a quarterly basis.`` For its part, Analog Devices has concentrated on multi-chip solutions that integrate several functions into individual modules, saving space and battery life. ``Going with the multi-chip module can save them money,`` he says.

To be sure, increasing demands by CE manufacturers have forced chip companies to innovate like never before. ``A few years back, [manufacturers] used to expect some silicon and few levels of software,`` says Umesh Padval, executive vice president of consumer electronics at Milpitas, Calif.-based LSI Logic. ``Now, they expect a turnkey solution.`` LSI has been trying to get ahead of the curve by focusing on nascent markets such as DVD recorders, high-definition DVD players (expected to start rolling out this year), high-definition set-top boxes as well as hot items such as MP3 players, video game consoles and digital camcorders and cameras, ``Everything is going from analog to digital devices,`` says Padval. ``It`s a huge market opportunity for people playing in the consumer electronics area.``

Never too Thin

Much attention has flowed to the growing market for small, portable devices, which now require enormous memory capacity to handle multiple multimedia tasks—sometimes all at once. Packing increasing amounts of ``random access memory,`` or RAM, into small devices has become an important part of supporting multiple functions sought by consumers. In addition, storage memory is advancing so fast that some digital camcorders don`t even include a tape bay. ``It`s getting to the point where you can have solid-state storage instead of a tape in there,`` says Jim Elliott, associate director of DRAM (dynamic RAM) at Samsung Semiconductor based in San Jose, Calif. He says that a combination of DRAM and ``flash`` memory chips in small devices could overtake disc-based hard drives as a more compact and reliable means of storing large data files.

Packing increasing amounts of ``random access memory,`` or RAM, into small devices has become an important part of supporting multiple functions sought by consumers.

Disc-based hard drives, after all, contain several moveable parts that are notorious for suddenly ``breaking`` after periods of use, resulting in data loss. They are also relatively fragile, which can be a problem for mobile devices. Chip-based memory such as flash and DRAM, however, can be smaller and sturdier than their disc-based cousins. ``So we need to do it with silicon and chips versus rotating media like a hard drive,`` says Zack Weisfeld, general manager of Sunnyvale, Calif.-based M-Systems USA, which makes flash storage chips. For storage levels of just a few gigabytes, flash memory can compete with hard drives on price, ``which wasn`t the case 18 months ago,`` according to Weisfeld. ``They`re durable,`` he says. ``They survive in high heat. Flash memory is going to take over a significant amount of the drive industry.``

Whatever direction this evolution takes us, chip innovations of all kinds seem unprepared to let up anytime soon. The consumer`s desire to do more with less seems insatiable. And the semiconductor industry seems intent to make the tools that will allow CE manufacturers to dazzle their customers for years to come. To be sure, impressing them has never been harder.