Austin American-Statesman Plugged In column

Jan 05, 2013 (Austin American-Statesman - McClatchy-Tribune Information Services via COMTEX) -- Some of the smart folks in the semiconductor industry have decided that the Internet is too important to be devoted primarily to your Facebook page, your Google searches and your YouTube videos.

The chip visionaries say billions of new devices should be brought onto the Internet -- cars, home security systems, televisions, thermostats, the smart meters that will talk to the new smarter utility grids and then much of the equipment you and others use at work.

The concept, which has been poking around for several years, is now known as the Internet of Things, or IoT for short.

The IoT is still in its formative stage. It's not really a cohesive market yet. It's more like a concept that one day could grow into a series of interconnected markets. The end result might be a sort of George Jetson world where our homes, offices, factories, stores, cars and highways all have ways of talking to one another and working in more automated fashion for human convenience and efficiency. At least that is the positive spin on the vision.

Austin's Freescale Semiconductor wants to play in the IoT market as it evolves. So do several other substantial chip companies including Qualcomm, Texas Instruments and Intel Corp., the technical driving force behind the personal computer industry.

For Freescale, IoT is an interesting target to shoot for as the company prepares for its business comeback.

Freescale's predecessor (Motorola Semiconductor) used to be one of the largest global chip makers. That is no longer the case.

But the company is plotting a comeback with a revamped executive team, a slimmed down strategy, a healthier culture and a lot less intellectual clutter.

Kaivan Karimi, head of strategy and business development for Freescale's microcontroller business, explains.

"When I joined the company in 2003, we had 21 different chip architectures to support. The goal then was to bring it down to 14," Karimi said.

But now that number is three.

Microcontrollers are processing chips that have their own software program embedded in the chip. Freescale and its predecessor have made billions of them for many, many years. The good news for Freescale is that supporting fewer chip architectures means more engineering focus, which should tend to speed up the product development cycles. The two most important of its remaining chip architectures are Power and ARM.

Power is a high-performance processor architecture that Motorola developed in collaboration with IBM Corp. Freescale uses it in performance-centric product lines like network processors and automotive engine controllers.

The more recent change has been to ARM, which Freescale has embraced with full force after Motorola fought it for years.

ARM, you might remember, is the United Kingdom-based company that has developed a family of very low power engines for chips that have become the brains of most smartphones and media tablets in the world.

Dozens of chip companies and systems companies, including Samsung Electronics Co. and Apple Inc., are allied with the sprawling ARM ecosystem. It is an efficiency play. There are so many software developers aligned with ARM that new customized solutions for customers becomes quicker and less complicated.

Freescale hasn't always been in love with ARM. When it was part of Motorola, it declared war on ARM in 1997 with its own low-power chip family called MCore. But MCore is no more, at least in terms of new product development. ARM rules.

The challenge with ARM is differentiation. Since dozens of chip companies potentially have access to the same basic ARM processing cores, they have to work hard to develop specialized modifications and software to meet customers' needs.

Geoff Rees, Freescale's new general manager for microcontroller products, says his company is well-suited to play in the ARM world, which is moving rapidly toward more muscular 32-bit processing cores.

The Austin company has a wealth of systems engineering expertise and long experience with the long list of wired and wireless communications technologies needed to connect smart devices to internal networks or the wider Internet. The company also has a growing list of sensor chip technologies that can be integrated into the ARM world.

"We still do have products based on other architectures, but virtually 100 percent of our research and development is directed toward 32-bit ARM-based (chips)," Rees said.

More and more of that R&D is software. Rees says Freescale's customers are looking to it for the systems expertise and some of the software smarts to develop new products. To meet those needs, Freescale is working to be more nimble and to turn out new designs more quickly.

It can do that because engineers will be reusing some of the same basic building blocks and then adding more specialized circuitry and software.

Software will be the challenge, says analyst Patrick Moorhead with Moor Insights & Strategies. "They have to gear up in software and prove to people that they can be effective in this new economy," he said.

The new approach fits well with the new strategy articulated by CEO Gregg Lowe, who joined the company last June. Lowe said he would survey the company, prune away its weak spots and "double down" on its strengths.

Lowe started giving details of that strategy in late October. Some product areas for power management chips and signal processors, would go away. The company would cut 5 percent of its global workforce and it would shift more of its sales people toward Asia, where the largest segment of customers is based.

So Freescale has dropped a lot of its dead-end chip architectures in favor of ARM, but Karimi says the company has held on to key groups of veteran engineers that have the systems expertise to help the company succeed in an ARM-centric world.

"When the company was going through tough times, we kept a core group of engineering people who were extremely valuable. We kept them around and now they are addressing these new systems," he said.

One other thing had to change as well, the last vestiges of the toxic old Motorola culture known as the "warring tribes" mentality. It was a culture based on nasty turf battles and rival empires that competed for resources within the company. In the new nimble and collaborative ARM-based world, that had to go.

"We have built our team," Rees said, "around people who can cooperate and work well together." ___ (c)2013 Austin American-Statesman, Texas Visit Austin American-Statesman, Texas at www.statesman.com Distributed by MCT Information Services

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