Micro makeover

ARM is making inroads into the microcontroller business.

It is tempting to portray microcontrollers (MCUs) as the dowager aunt of the semiconductor market - steady, conservative, and apparently always dressed in the same 8bit fashions, notwithstanding an occasional dalliance with 16bit.

To extend the analogy, just as there always seems to be some entirely innocent vagueness as to how Auntie Mabel acquired her wealth, MCUs have carried a similar air. The OEM automotive sector aside, parts reach the market mostly through distribution. Even though the distributors are today much better at tracking not just who their customers are but also how they use various components, some eyebrow-raising MCU applications can still crop up.

But in the last couple of years, things have changed. MCUs have become a bit more - well - hip, in a shift that can be attributed to perhaps two factors.

First, some of the faster-growing application spaces today are proving well suited to the MCU: energy, security and connectivity, especially machine to machine. This trend has also made the market more predictable.

Second, in 2006, ARM started licensing the Cortex-M3 MCU core, combining a 32bit core intended to support the gradual shift to programming in C and C++, and even some of the higher-level graphical languages offered by The Mathworks and National Instruments, with low cost. "ARM for a buck" was how Luminary Micro put it, by indeed offering $1 MCUs in its portfolio.

ARM by no means created the 32bit MCU with the M3. ARM7 and ARM9 cores are already available inside MCUs and there are plenty of companies who have sold 32bit devices into this space for some years. But ARM's increased focus has spurred a new wave of competition. Renesas Technology, the MCU market leader, has its own aggressive 32bit family based around proprietary technology. MIPS Technologies, ARM's perennial competitor in processor intellectual property (IP), launched the M4K core into the 32bit MCU space a little over a year ago, securing Microchip Technology as a licensee shortly after. Atmel, meanwhile, has both taken an ARM license and offers its own AVR32 architecture.

Take all this together, and you find analysts at Frost & Sullivan who remain willing to commit to MCU market growth from $14.6bn in 2007 to $19.1bn by 2011, while Semicast pegs the 32bit-and-above space at $8.6bn today rising to $14.2bn by 2013. Indeed, while executives themselves admit to varying shades of concern and even gloom over broader economic prospects, MCUs continue to generate cautious optimism - even the occasional takeover bid with a $2.3bn offer for Atmel still on the table from Microchip and ON Semiconductor as this article went to press.

On a more general note, ARM CEO Warren East had this to say in picking out where MCUs may be poised for substantial growth, at his company's US Developers Conference in October: "Energy efficiency is the new killer feature in consumer products." He also acknowledged the role the MCU market has played in boosting ARM's licensee roster.

The company returned to the theme this month at its European Technical Conference in Paris on 20 November. Where once the speaker line-up would have been dominated by mobile comms executives, MCU managers from the likes of NXP Semiconductors, STMicroelec-tronics and start-up Luminary Micro took centre-stage.

So, let's track the growth. MCUs have always played a major role in controlling energy consumption and managing motors, particularly at the industrial level. East's decision to link this functionality to potential in the consumer market requires some further exploration, particularly as most of his rivals are headed down the same track.

ARM made its name in the world of consumer electronics as its technology came to underpin power-efficient and increasingly multi-functional mobile devices. However, the consumer market the company now has in its sights is dominated by end products more traditionally termed 'white goods' or 'household appliances'. The best known examples are fridges, washing machines and dishwashers, but think of anything big in your house and chances are it would benefit from some MCU-based power management.

Power efficiency of cunsumer technology

One awkward piece of marketing wisdom holds here. Today, 'greener' performance might actively lead a consumer to swap out his existing mobile phone for a new one. However, in the white goods business, very few owners sit staring at the dishwasher and decide it is too power hungry. More likely, the active part of the decision is spurred by a product's end-of-life, an expansion of the household, installing a new kitchen or - perhaps more rare right now - moving house. Then, power efficiency does matter, but it is not initiating these purchases.

"What you can say, though, is that those dynamics are still very important to our customer, and he's the guy building the washer or whatever," says Geoff Lees, vice president and general manager for the MCU product line at NXP. "What he knows is that, to close the sale, his product has to have the better energy efficiency. Even though it may not be exactly why consumers are in the showroom, it's still a big part of the choice they make. They're looking at the sticker on the front and they're expecting to see the product meet certain targets."

In short, this is a numbers and a performance metric rather than a question of fashion. Given that, a second driver is global regulation, as Jean-Anne Booth, chief marketing officer at Luminary Micro, notes.

"It's a kind of context where it's almost embarrassing to be a US-based company, because we are just about the only major country that hasn't gone there recently," she says. "Everywhere else, governments have brought in regulations, new ways of rating device performance, and all those initiatives are influencing how our customers look at their products. It isn't just the consumer - sometimes, some authority out there is saying, 'Sorry, you can't do things that way anymore'."

An interesting part of the story behind Booth's company is that, while it is a start-up, it is also the poster child for marrying notions of low-cost to both 32bit MCUs and ARM's brand name technology. It did this by launching its first ARM-for-a-buck Stellaris devices in Spring 2006, and has continued to build the range since.

"And what we've known throughout the process is that we are part of a system issue. An MCU isn't a smart on-off switch. It's actually something that is harder for most people to get a handle on," says Booth. "Once you're working with 32bit technology and you've got the kind of signal processing power in these MCUs, you have the computational power at hand where your can keep a real-time model of the engine. Now, you're really in the domain of improving the system, and that applies just as much if you are talking about a security application or something in connectivity."

The promise of 32-bit MCUs

So, there are basically two agendas at work. East has, as ARM CEO, the ongoing pressure to prove that the company can expand into new markets. His description of where MCUs are going is easy to understand. But the reality, as Booth may well be painting it, is at a much broader system level.

Either way, put all this potential together and as more customers do acknowledge the system-level pitch, you can see why both Booth and Lees see 2008 as something of a tipping point, the year when 32bit became firmly set on track to be the largest MCU market over both 8 and 16bit.

This transition may be more significant than any supposed greening of MCUs. Certainly, the shift underway becomes clearer when one looks at how MCU products are being packaged and the markets beyond power that they are starting to exploit: particularly, automotive, security and communications.

"We still accept that there is a need for a lot of support in getting customers to migrate," says Jacko Wilbrink, product marketing director for ARM MCUs at Atmel. "Some of that - tool support, for example - will come from ARM and from vendors; some will come from vendors alone. But customers are beginning to understand where the technology fits in."

Atmel and all its rivals in 32bit MCU - regardless of whether they use ARM processor cores - have worked heavily to develop partnerships that give users tools that let them drag and drop software features into the code. Also intended to make the whole process of building a system quicker, platform designs are now common and have proved particularly important for sales achieved through distribution in creating demand for the higher end MCU devices. Those same devices have also grown enormous ranges of peripherals around the base functions. And the well-established trend in Flash-based programmable chips has blossomed into a widespread appearance of configurable MCUs.

ARM & NXP

But as this wave of performance-based competition has spread across the MCU space, so have fears of commoditisation. Thus, on one hand, all of ARM's partners publicly praise the commitment it has shown to the MCU market and it was important to them that East mentioned the sector so frequently.

"People forget that ARM really did break with its own approach when it picked a start-up among its partners to enter this market," says Luminary's Booth, drawing a fair contrast with the company's conservatism up until that point.

"When we began this relationship, ARM had just a few people with an understanding of microcontrollers; now, it's a pretty big team of people and they have a very deep knowledge of the market," says NXP's Lees. "And they built all that up very quickly."

But privately one vendor also expressed some fears about branding. "We know what Renesas is saying," the executive told E&T. "They argue there is very little to differentiate one ARM-based MCU from another - and what they are doing is trying to turn back all the marketing that has been put behind the ARM name in the market, almost like judo. We have to play against that and strongly."

And he was not alone in articulating similar concerns. Frost & Sullivan's analysis also specifically identifies a burgeoning range of MCU peripherals - USB, CAN and so on - as having become a key way in which all the vendors are making themselves stand apart.

Luminary's Booth also says that knowing how to pitch your reference design, particularly in terms of how far it 'solves' a problem is important.

"The history is that the companies selling the silicon often have not known that much about where it goes. Distribution does a lot better now, but you still want the products to be able to find new markets," she says.

Booth expands on her point by describing a couple of 'reference' products that Luminary has or is about to launch. One will help to enable mid-range RFID applications; another exploits CAN in terms of machine-to-machine networks. Both plant seeds rather than clearly define, or restrict, the end use.

The result is that MCUs retain their own brand of conservatism and a wisdom based on maturity. And, of course, the other thing you notice about such auntie-type figures: they typically know exactly how to manage their holdings when times were tight.

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