Earlier, the PC chip giant Intel will exit the phones to the Internet of things, much attention has been paid to move across the chip industry, however, will be towards the Internet of things is not alone. Shrinking smartphone growth in the PC market, under the background of the Internet of things can really save represented by Intel chip manufacturer? For out of the woods they should to do?

The Internet of things really can save chip giant?

Smartphone growth is slowing, wide prospect of Internet of things

Data show that in the first quarter of 2016 global smartphone manufacturers shipped a total of 334.9 million units, compared with 2015 in the first quarter of 334.3 million increased slightly, year-on-year growth record low, qualcomm and mediatek's performance is affected. Qualcomm in 2016, the latest results show that the second quarter among MSM chip shipments for 189 million, 233 million decreased by 19% from a year earlier, compared with the previous quarter of 242 million decreased by 22%. For the third quarter, qualcomm, forecast is given, and the chip shipments fell 13% year-on-year to 22%, from 175 million to 195 million.

Look at mediatek, mediatek revenue in the first quarter of 2016 nt $55.91 billion ($1.72 billion), and before the company forecast 525-57.4 billion nt basic consistent, although march began to increase revenue, but compared with the previous quarter fell by 9.4%. With analysts forecast full-year 2016 mediatek's revenue will grow by more than 10%, but gross margin will be further compressed.

Qualcomm and mediatek in under the background of the global mobile phone market is saturated growth is slowing, the decline in the performance and greater competition let the dominant mobile phone chips to look for more potential market.

2015 Internet of things in the world market is worth $62.4 billion, up 29% from a year earlier. Market research firm IDC predicts that by 2020, the Internet of things will be a $1.46 trillion of the international market, and last year, this number is only 700 billion. For important networking equipment in the Internet of things, there are agency predicted 2020 global 24 billion iot devices connected to the Internet, and cisco, huawei, Ericsson is estimated number of connections between 50 billion and 100 billion, are far more than is now more than 70 department of mobile phone number.

In addition to the size of the market is huge, according to the application of iot market can be divided into intelligent industry, intelligent agriculture, intelligent logistics, intelligent transportation, smart grid, intelligent medical, intelligent security, intelligent household and so on, rich application has greatly increased the appeal to the chip manufacturers.

Chip makers are for the Internet of things

PC chip overlord Intel after market exit mobile phone chips, Intel CEO has issued an open letter again revealed company growth opportunities, "cloud and data center, Internet of things, storage, and the FPGA (field programmable gate array), they are closely connected by connectivity, and strengthened by the economic effect of Moore's law".

Intel has 55% of its revenue from its client computing business group, compared with income from the Internet of things is less than 10%. By the first quarter of 2016, Intel Internet sector revenue was $651 million, accounting for 5% of its revenues, $286 million, more than in the first quarter of 2013 increased by 78% in 3 years. Intel how to make the business growth of the Internet of things to catch up with the PC based business drop speed?

The hegemonic qualcomm in IoT chip sales last year of mobile phone chips has quietly realized $1 billion in revenue, its chips are used in all sorts of urban infrastructure projects, household appliances, automobile and wearable devices. Reportedly, a total of 120 million units last year with qualcomm chip intelligent household equipment shipment. In addition, 20 million vehicles, 20 kinds of wearable devices adopted qualcomm chip, chip this year 10% of the revenue will come from outside the smartphone IoT device.

ARM last month this year, more than half of the season 1 authorized chip shipments is to target the mobile device market. ARM's chief executive Simon Segars revealed that the company aimed at the Internet of things such as the mobile market has been for some time. Chip design development cycle is long, he said, now pay licensing fees is 5 years ago, even 10 years ago is the crystallization of the products development of 20 years ago. ARM rival Intel last year hit $16.7 billion Altera is considered to improve it in the data center, connecting equipment market competitive position of a big step.

Samsung also released a specially designed for the system level chip Artik IoT devices. Behind this chip, is the software ecosystem, samsung is the samsung acquired SmartThings iot clouds and development kit, there are a large number of partners: the Arduino and Arduino IDE, Tembook software stack, iot analysis platform Medium One SigFox, provide wireless Internet connection.

Chinese chip manufacturer huawei last year shows the Agile IoT system, including a control basic equipment, operating system, called LiteOS this is huawei to the field of Internet of things the most important step. Huawei has joined the Cloud Foundry open source community, in order to help create a iot application development platform.

Iot tuyere chip manufacturers under challenge

The chip vendor's train of thought, mostly led technology accords with the demand of the mainstream market, they have enough level under guarantee and profits and to define specifications. To safeguard function instead of mostly do addition, and then select the process best for wafer foundry enterprise, and the encapsulation testing standards. Chip sales is more than 1 to more directly to hardware manufacturers, even different equipment manufacturers in the field of application, such as mobile phone chips and flat gm, flat chip and onboard, surveillance camera is the same.

Iot market size, application is rich, the precision of each area on the chip, performance, power consumption, and even packaging test requirements are different. So it is hard to exist a standardized processor chips, can satisfy the demand of all. At the same time, because the quantity of networking equipment has greatly increased, the difficulty of the replacement battery, so the Internet of things device chip for low power consumption demand is significantly higher than smartphones. For chip design, according to the product characteristics, field characteristics, the choice of precise chip IP, interface, process, packaging, testing is under the Internet of tuyere face huge challenges.

Chip makers should do?

In order to meet the demand of the chip customized iot market, chip makers need and subdivision depth system application in the field of enterprise, to understand the needs of the market application, and will be hosting service, the requirements into specifications and can according to different application scenarios do subtraction, remove the redundant function module, and then select the IP resources one of the most abundant wafer foundry enterprise rapid flow production, customized test according to the requirements of application fields and choose different encapsulation mode, finally, the application of the chip to the specific market. At present, there has been a chip designer in customized chips based on the application of the market demand, such as Shanghai clever according to the industrial 3 axis machine tool, or 3 d printer control requirements, customize the no.6 DAC output of the MCU chip MCU (usually only two road DAC).

Face daunting and expensive cost of development, the enterprise can choose from the frills, through more emphasis on open source hardware IP function block with the board, so as to create a service oriented source of revenue. Can be reprogrammed chips for the semiconductor industry also bring a lower development and manufacturing costs, and create new sources of revenue opportunities. Chipmakers can sales which has the function of minimizing a single configuration, OEM or end user to pay for additional features, rather than for each application inventory different editions of the chip. By providing "function as a service" system architecture, can significantly extend the market scope of chip design for each style, at the same time still accord with the requirement of customers.

So, the Internet of things can really save chip manufacturer?

After over half a century of continuous growth and innovation, semiconductor sales and profits in consumer trends, market momentum and start the slowdown in the pace of innovation, etc. Gartner forecasts, Internet of things is expected to contribute $43.5 billion semiconductor sales in 2020, but the only takes up at the appointed time will reach the $400 billion into left and right sides of the semiconductor market of the whole; Sensitive to the cost of the Internet market, may not be big buyers of the chip.

Chip development costs continued to rise and profit less and less of the existing mode, the Internet of things can't exert all its potential. Even if the Internet of things to cater to optimistic forecast, design and build as low as $1 sensor to monitor the refrigerator temperature or urban parking space, a variety of applications such as cannot produce how much profit.

So for the chip giant, what is the growth of the Internet of things market can bring the hope still needed a business model innovation to improve the performance is still worth thinking about.

In contrast, domestic chip manufacturers, statistics show that more than seventy percent of the chip design company is not making money, more than $100 million in annual sales of chip design companies only a dozen, and sustainable development ability of only 1 ~ 2. Homogeneity of the product specification in the mid-range chip market price competition is very fierce, in the mobile growth iot a vast market and chip giants are moving targets, domestic chip company also need to transform ideas, overcome the difficulties to find a new blue ocean.