CY2012 proved to be more than just a challenge. For some new Semiconductor Timing players, it meant acquisition, while others struggled to maintain market shares and $$ revenues during significant socioeconomic challenges. Others were assimilated or ran out of funding...
Indeed, we did see growth, while almost miniscule at 0.8% - 1.04% in revenues while volumes are up some 6-8% across Semiconductor Timing as a whole. Volatile $ASP's made it hard and more difficult to compete in the world of COGS vs. $Price. Significant volatility in device $ASP's made it harder to maintain value added especially in low end solutions for XO's in LVCMOS from kHz up to 150MHz today.
Strong growth in the Gigabit Ethernet 10/100 space, keeps target frequency sweet spots at 32 KHz, 25 MHz, 62.5 MHz, and 125 MHz respectively. This continues to be the number one volume point in XO's today for low end commodity, complex commodity, and precision class solutions.
Higher end Oscillators and Semiconductor Clock and Timing solutions relate much more to Communications in both wireline and wireless applications where value added is appreciated by the OEMS in order to maintain high speed serial I/O growth into higher data rates and increased spectrum and support for wireless needs in RF Timing.
In Quartz, we saw continued growth as an indication of the increasing trend for integration of many traditional external stand-alone solutions. Coupled with cost limits and reduction, this makes for many more challenges to the supplier base in timing.
Last year we made specific note of a trend observed while at the CES in 2012 in which we noted concern over the new SmartPhone culture with its totally connected world we now live in. We said that this trend will and is now effecting the fewer mid-range and high end PC's, Consumer applications pushing for that single chip solution, and more.
PC shipments continue to slip and seem more and more to be relegated to business while tablets, pads, and slates along with SmartPhones are now ubiquitous and more focused upon content, connect-ability, and accessibility rather than hardware features and potentials. These changes have, and continue to affect semiconductor timing in big ways. We said then that this trend will create increased pressure for integration of the timing function as well as fierce competition from the MEMS and Compensated CMOS based suppliers making entry now. This would impact our segment in big ways and it is indeed happening now, and we believe it will increase as time moves on and the younger generation begins to spend and stimulate even more growth and pressure for smaller, faster, cheaper, and more. All of this translates into less semiconductor content with the timing function being integrated as a value added element at all-time highs. This is the biggest point of pressure we now face as industry, and while the high end continues to show the value added appreciation for the precision and ultra-precision class solutions required in order to keep these functions external, the low end pressure is at all-time highs making it difficult to compete with the cost/price pressures.
As noted, in the low end, cost without compromise in performance, stability, and/or accuracy is driving sustainability for many suppliers today. While in the mid-range and high end applications, the value added is still evident and appreciated by the consumption base. In Physical Layer timing for wired applications and in RF modules and components for WiFi/WiMax and broadband in general, growth continues while the suppliers continue to jockey in the top tier for position and profit.
The supplier base is undergoing some changes as well as the consolidation that has been evident over the last three years. MnA activities seemed to be at an all-time high in CY2012 with some big deals being noted at IDT, TI's integration of the NSC Timing BU, Micro Semi, Micrel, ADI, and more. We expect to see this trend continue into 2013 noting technologies up for grabs and the need for the big guys to stay competitive with new technologies and new products that can compete. There are however, fewer startups and new technology to make additional impact. Look to our section on MnA for more detail...
Suppliers in the Oscillator segment are looking much more at vertical integration to control costs as well as making deals with some of what were disruptive technologies like MEMS and Compensated CMOS solutions. Bringing ASIC capability internal has proven key. This is making a difference for the Semiconductor Clock and Timing folks who have traditionally been supplying ASIC silicon solutions into the FCP supplier base, thus limiting and reducing sales of Die into FCP for 2012 and going into 2013 as well.
Off shore suppliers in Taiwan, China, and Korea are making direct inroads on the Market by going direct and competing head to head where before they traditionally provided manufacture for many US based Suppliers where costs are challenged. TXC showed this in 2012 by rising another notch to be the number 3 WW supplier by revenue, and the number 2 WW in XO's. Adjustments in our numbers based on specific research, shows Siward and Taitien to be in the Top ten suppliers in Xtal and Oscillators adding to the illustration, and as noted, we are expanding the supplier update section due to additional requests. In Semiconductor Clock and Timing, IDT remains at the top of the list in Revenues, but in the second half of 2012, after making the Fox Electronics acquisition, and the loss of Fred Zust, they seemed to become confused and trying to re-organize around a new group. Making the Fox acquisition was in our opinion, a great move serving as a channel for packaged Mobius Technology (Was originally called CHO for CMOS Harmonic Oscillator, and then renamed by IDT to SFC for Silicon Frequency Control), and keeping viability in terms of profit Vs. cost of sales. Today, IDT has a full portfolio of technologies to draw upon for a given solution, and by participating across virtually all lines of Semi Timing product categories, and with a great channel, and their unique print position, they are a tough number one. Communications remains the key target for mid-range and high end timing solutions suppliers.
Could it be possible that we have reached a crescendo in Semiconductor Timing? Could we be experiencing the high water mark for this critical segment? The answer may well be yes. We see the highest level of integration of the timing functions ever, coupled with supplier base contraction and consolidation are making impact felt all over the industry in all segments and product categories. At the very same time, what has been referred to as “Disruptive Technologies” like SiMEMS and Compensated CMOS are making their impact felt and are gaining SOM in Consumer, Industrial, Computing, and trying very hard in Data and TeleCom. Now proved very much viable, the SiMEMS players have continued to be very visible as they compete head to head with the traditional Quartz based Oscillators. Now we have two distinct camps in SiMEMS; Piezo Mechanical (SiTime, Discera, NXP, TXC, Maxim) which is in play and shipping in volume today, and Piezo Electric (IDT's pMEMS, and Avago's FBAR) which utilizes Aluminum Nitride (AlN) to create very high frequency resonators (>1GHz), and uses integer dividers to provide required frequencies. Today, most all of these solutions require a Fractional N PLL to deal with calibration and for the initial frequency offset, so today, power consumption prevents them from Mobile applications, but SiTime is making announcements for support of Mobile low voltage and low power solutions this month (March 2013) that could change this and open more market opportunity for the SiMEMS players.
Compensated CMOS using high performance compensated LC based designs, and now compensated RC's for 32kHz in a pure silicon play exists, and many OEM's continue to make deals, partnerships, and continue making Mergers and Acquisitions to expand their respective technology and product offerings.
This report contains information covering the Quartz, MEMS, and Compensated CMOS based Semiconductor Timing MarketScape (Includes Die sales into FCP plus RF components and modules. CS &A provides detail TAM's, Supplier Base, Technologies, Products, applications and the consumption base with unique tools and Top Down/Bottoms up Methodology.