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Embedded Systems

Embedded chips and boards aren't hyped in TV and magazine ads like the slick chips destined for the desktop and they don't boast performance specs that would take one's breath away, but embedded chips and boards form the backbone of the electronics-driven world in which we live. As one analyst summarized, "they are part of almost everything that runs on electricity." From the remote control you use to change channels on your television set to the washing machine that washes your clothes, embedded systems are everywhere.

Hot markets like telecommunications, data communications, wireless and consumer electronics depend on embedded chips and boards. Their needs currently fuel much of the innovation and growth currently occuring at both the chip and the board level.

Embedded chips

According to Jack Quinn, Integrated Circuit Engineering (Scottsdale, Ariz.) senior analyst for micrologic research, the worldwide market for embedded chips is growing steadily.

What Quinn calls "true microntrollers" (as opposed to microprocessors that some manufacturers call microcontrollers) will total $9.9 billion this year, or about 3.2 billion units. Add the revenue for embedded microprocessors (about 30 percent of the total revenue for microprocessors this year, or approximately $3.9 billion,) and you have the total value for embedded chips in 1995---$13.8 billion. That's up from a little over $5 billion in 1994.

The growth hasn't stopped yet, noted Quinn, who expects the true microntroller market to reach $1 9.5 billion by 2000. That's not counting growing revenue for embedded microprocessors, which should remain significant.

Embedded microprocessors make up the majority of the worldwide unit shipments of microprocessors. In 1995, embedded microprocessors comprised 79 percent of the worldwide high-end processor unit shipments, or 262.4 million out of a total 330.8 million shipped, according to In-Stat (Scottsdale, Ariz.). Embedded microprocessors are a smaller percentage of overall revenue for microprocessors, however, because they are cheaper than chips designed for PCs. In 1995, In-Stat estimates that embedded microprocessors will generate $3.4 billion, compared to $14.1 billion expected from microprocessors headed for PCs.

Microprocessors, once designed only for the desktop and modified for embedded use, are now designed specifically for embedded applications, and such chips are being used in videogame devices, personal digital assistants and TV set-top boxes. They are cheaper than desktop microproce ssors and unlike their desktop cousins that are designed for high performance, embedded microprocessors are designed to be cost-effective and to integrate many functions.

Breakdown

Low-end microcontrollers, primarily the 4-bit and 8-bit versions, dominate embedded chip shipments this year and will continue to do so over the next four years. InStat Inc reported units shipments of 1.1 billion units for 4-bit and 1.4 billion units for 8-bit for 1994.

The top suppliers of low-end microcontrollers include Motorola, Mitsubishi, NEC, Philips, Intel, and Hitachi.

At the high end, shipments of 16-bit and wider processors for embedded totaled 173 million units, according to In-Stat. Growth over the next few years is expected to come from high-end chips (16-bit and wider), especially 32-bit and 64-bit processors that will be used in video games, personal digital assistants and TV set-top boxes. In fact, unit shipments of high-end embedded microprocessors (16- and 32-bit) will grow at doub le-digit growth rates through 1999, according to In-Stat. Shipments of embedded MPUs will increase from 262.4 million in 1995 to 865.1 million in 1999, In-Stat reported in a recent study.

Suppliers at the high-end include Intel, Hitachi, Mitsubishi, Motorola, NEC, National and Siemens.

Market Trends

"Embedded microprocessors and microcontrollers will give you more functionality at the same or slightly higher price than today," noted ICE's Quinn For instance, he estimated the average sale price of a microcontroller in 1989 at $2.62. The price in 1995 is about $3.19, and by 2000, a microcontroller will cost $4.29, on average. The price won't increase much, but the average functionality of the chip will be higher.

More integration on an embedded chip will mean more of the much-needed DSP (digital signal processor) functions, explained Quinn. " Over time, more and more embedded applications, such as wireless devices and automotive, will require such DSP functions as multiply and accumulate," noted Quinn.

Embedded boards

The market for boards used in embedded applications is growing as applications such as telecommunications and networking are demanding more and more embedded functions. Factory revenue from boards totaled $1.896 billion in 1994, up from $1.625 billion in 1993, according to Venture Development Corporation (Natick, Mass.). The market for boards consists of five major bus architectures: VME; ISA, EISA, Mutlibus I and Multibus II.

Of the total market, VME boards represent the largest share, or $937.9 million in 1994. Top applications for VME boards today are military, telecommunications and medical imaging.

The major players in the embedded board market have not changed much in the last year. Among the top five companies that supply VME boards are Motorola, Force Computers Inc., Interface, Radstone and Fore Sy stems.

Once the board of choice, VME is beginning to lose sales to ISA boards, according to Venture Development analyst Don Carey. Scientific research, test and measurement, industrial automation and transportation and even some telecommunications applications are moving to ISA. However, VME boards are expected to remain the board of choice for applications that require complicated engineering tasks and high reliability, like telecommunications, medical imaging and military applications.

ISA board sales totaled $396.5 million in 1994 and sales are growing at a faster rate than sales for VME boards, according to Carey. The reason: ISA boards are moving toward the compact PCI format that is attractive for a lot of applications including interactive voice response, telecommunications, central office equipment, and industrial automation. In addition, ISA boards are less expensive than VME boards and are not rendered obsolete within one year like VME boards. According to Carey, all industries are concern ed about getting the best technology for their money, not just the highest performance.

Top suppliers of ISA boards include: Adaptec, 3Com, Texas Microsystems, Digi Board and Keithley/Metrabyte.

EISA bus boards came in behind ISA at $276.8 million last year. EISA boards are king in the server and networking arena and that segment is expected to remain stationary with few changes, according to Carey. One exception: ISA boards are beginning to erode EISA 's market.

The top companies in EISA boards are 3Com, Adaptec, Eagle Technologies, Compaq Computer Corp. and Hewlett-Packard.

Multibus I is a small and relatively stable segment that exists solely for the Intel and Siemens AG customers that purchased systems with Multibus I boards 15 years ago, according to VDC's Carey. Multibus I boards are primarily used in rugged applications like heavy-industry data -acquisition equipment. Some of the main customers are sawmills in the Northwest. The boards are important to their customers, but problem wi th them is that the surrounding components are harder to get. The segment totaled $91.7 million in 1994.

The main Multibus I suppliers are Intel and Siemens and the rest of the market is divided amongst several small companies.

The Multibus II segment is slightly larger than Multibus I and is dominated by Intel. The segment totaled $193.1 million last year. A new hot-swapping feature on Multibus II boards is expected to be significant draw and increase 1995 sales. One important new area for Multibus II is telecommunications applications, especially overseas telecom companies.

Multibus II board vendors include Intel Corp, Micro Industries, Siemens and Central Automatismes.

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