PARK RIDGE, Ill. -- The National Highway Traffic Safety Administration could be on the verge of issuing a regulation that would put a microprocessor in every new tire, paving the way for semiconductor makers to provide automakers with 80 million chips a year.
The agency, still reeling after a U.S. Court of Appeals in New York threw out its earlier tire pressure mandate this summer, is said to be putting the finishing touches on the new ruling, which would bar automakers from using cheaper techniques to "infer" tire pressure. Industry sources said the NHTSA, which has been tight-lipped about its plans, will publish the new regulation before year's end.
"We have indications that NHTSA will move fast " possibly in the next couple of weeks, but definitely before Christmas," said one industry executive. "They have to, because the carmakers need to plan this into their production schedules."
The regulation is expected to be greeted with jeers from automakers, which insist the technology will add to the cost of their vehicles, and cheers from chip makers, many of which foresee a vast potential market aborning.
"Tire pressure monitoring is going to be the next major market for the semiconductor industry," said Jack Morgan, director of the Automotive Segment, North America, for Philips Semiconductors (San Jose, Calif.), a major chip supplier to the auto industry. Suppliers of pressure sensors, 4-bit microcontrollers and RF receivers said they now expect their markets to mushroom.
The federal mandate is expected to cover the 16 million new vehicles sold in North America every year, each of which typically has five tires (including the spare). That means that suppliers will be called on to dish out 80 million semiconductor chips and pressure sensors annually, and system suppliers to provide millions of RF receivers and dashboard displays.
Industry analysts said those enormous expectations could put a squeeze on small suppliers that don't have the wherewithal to produce chips in that volume. "It's going to be difficult for the smaller players to come up with the numbers that the market is facing now," said Thilo Koslowski, lead automotive analyst and director of GartnerG2, a division of Gartner Inc. (San Jose). "It does make the playing field smaller."
Still, the new regulation could be a windfall for some. "If I were in the automotive-electronics business, I would start investing in additional capacity now," said Clarence Ditlow, executive director of The Center for Auto Safety (Washington).
The NHTSA's initial mandate, released in the spring of 2002, was based on the so-called Tread Act passed by Congress. It made provisions for two kinds of tire pressure monitors: one using a chip at every wheel and another, known as the "indirect" method, that piggybacked atop a vehicle's existing antilock-braking (ABS) system. Three consumer advocate groups went to court to dispute
NHTSA's interpretation of the Tread Act, and a U.S. Court of Appeals determined in August of this year that the standard was "arbitrary and capricious" in its inclusion of indirect technology. In a written opinion, the court said that a four-tire standard would "prevent more injuries, save more lives and be more cost-effective" than the indirect method.
Advocate groups, which have pushed the chip-in-every-tire technology since the Ford-Firestone debacle involving rollovers came to light a few years ago, viewed the decision as a huge victory.
"The court went all the way on this," said Ditlow, whose Center for Auto Safety was one of the three advocacy groups that brought the suit. "It said that when NHTSA goes back and issues a new rule, it can't consider indirect methods, because they are so inaccurate."NHTSA has said the government will not appeal the ruling. The agency would not state publicly, however, when a new regulation will be released.
Industry insiders said they believe the agency plans to roll out a slightly revised regulation that eliminates references to indirect monitoring techniques. Most believe the rule will arrive before year's end.
"The word on the street is that they are going back to one of their earlier drafts of the legislation as a way of saving time," said one observer.
NHTSA also said it has recently surveyed electronics suppliers to determine how quickly they can ramp up to high-volume production. "The idea is to learn about the tire pressure-monitoring suppliers and find out how far along they are in terms of their plans for manufacturing," an NHTSA spokesman said.
Many observers believe that NHTSA's actions will set the stage for acceptance of the chip-in-every tire strategy, which has up to now been backed by electronics suppliers and tire manufacturers but resisted by automakers.
If that's the case, several major electronics manufacturers could stand to gain, including chip makers, vendors of MEMS-based pressure sensors and system integrators. Makers of semiconductor chips for tire pressure applications include Infineon Technologies, Motorola, Philips Semiconductors, STMicoelectronics and Texas Instruments. Pressure sensor makers include GE NovaSensor, Motorola, Schrader Electronics and SensorNor ASA (recently acquired by Infineon), among others. System integrators include such companies as Bosch Automotive, Delphi Automotive, Siemens VDO, SmarTire Systems, TRW Automotive and Visteon.
Typically, chip manufacturers will provide a 4-bit RISC-based microprocessor with an RF output, A/D converters and small amount (approximately 4k) of ROM that can be subsequently integrated with transmitters or sensors. Companies such as Infineon and Motorola can do both, integrating the microprocessor with pressure sensors based on microelectromechanical systems (MEMS). Finished sensor modules-which include the processors, transmitters, supporting circuitry and lithium batteries " are typically mounted on the rim or in the valve stem of a tire.
Some tire manufacturers are also getting involved. Goodyear Tire and Rubber Co., for example, is teaming with Siemens VDO on a batteryless system called Tire IQ, which not only measures tire pressure and temperature, but also stores information on the number of miles driven while the tire is underinflated. Similarly, Michelin Group is working with TRW Automotive and SKF Automotive Division on a system that automatically repressurizes underinflated tires.
Electronics and chip suppliers claim that the daunting, 80 million-per-year figures are doable. "We've always been optimistic that tire pressure monitoring would be a high-volume market, and we've planned for capacity accordingly," said Allan Losey, manager of business development for Siemens VDO's Car Body Group (Troy, Mich.).
Still, industry analysts question whether electronics manufacturers will be able to ramp up to volume production quickly enough to keep costs at a reasonable level for automakers. "If there's a shortage " and there will be one in the very short term " prices will go up," said Koslowski of GartnerG2.
Total system cost, which is said to range between $65 and $200 per vehicle, has been a bitter pill for many auto executives, who often fight over pennies. Their concerns have led them to lobby hard for alternatives to the chip-in-every-tire scenario. Early last year, they reportedly even leaned on the White House for support. Eventually, the White House Office of Management and Budget called for NHTSA to reconsider its proposals, and NHTSA made accommodations for the cheaper, indirect sensing techniques, which employ ABS hardware already in place in most vehicles.
General Motors, which has already implemented the indirect method on more than 2 million vehicles, said recently that it is still hoping NHTSA will allow an alternative to the use of a chip in every tire. The automotive giant said it would prefer that the government permit GM's engineers to develop their own solutions, even if NHTSA calls for more stringent sensing standards.
"We want to choose an approach that would meet the requirement without putting a lot of extra cost on the vehicle," said a GM spokesman. "We're confident we can develop a technology to meet their needs."
GM also said that it hopes NHTSA will listen to automakers' feedback during the standard period for comment after the new regulation is released. "We certainly plan on using that opportunity to voice our opinion," the spokesman said.
Industry analysts suggested that heat from automakers could ultimately slow the process of implementing tire pressure monitoring but could not stop it. "GM might want to delay the process long enough so that the market can catch up and provide sensors in sufficient numbers to keep the price down," Koslowski said. "They could even get an extension if they scream loud enough, but eventually they will have to implement the technology."
Most electronics suppliers believe that a production ramp-up, like the one called for in the initial 2002 NHTSA regulation, would help both automakers and electronics manufacturers. That plan called for 10 percent of new vehicles to employ the technology in the first year, 35 percent in the second, 65 percent in the third and 100 percent in the fourth.
"It's true there's going to be a problem meeting demand at first," said Erwin Bartz, director of technical operations for SmarTire Systems Inc. (Richmond, British Columbia). "But it's a surmountable problem. Suppliers will just have to work together to make it happen."
By most accounts, suppliers are willing to do that. "Eighty million sensors a year is a challenge," said Losey of Siemens. "But it's a challenge that we would welcome."