A significant new trend has been emerging in the automotive electronics industry over the past few years. Major semiconductor makers such as Freescale and Infineon are beginning to license some of their proprietary and standards-based IP through companies such as IPextreme. This arrangement is accelerating the adoption of these technologies across the entire automotive industry.
IP licensing represents a major paradigm shift in the automotive market in that it "decouples" the technology choice from the supplier choice. No longer is a particular technology "captive" to a particular supplierallowing more flexibility in choosing suppliers and, thus, lowering costs with "the right solution for the right price."
In the past, manufacturers and Tier 1 integrators were locked into a certain technology that was only available from certain semiconductor providers. Now, automotive companies can select the technology they wish to use in their next-generation vehicles and instruct their supply base to license that IP.
Because automotive companies can select the technology they wish to use and instruct their supply base to license that IP, companies such as IPextreme are changing the electronic supply chain.
This model significantly reduces automaker and Tier 1 vendor time-to-market; improves the overall quality of products; and frees up vendor design resources so they can focus on their core technologies.
Vision systems design
As an example, IP licensing is playing a significant role in the development of Sensata Technologies second generation automotive Vision Sensor. The system uses vision-sensor technology that detects an immobile object in the line of sight of vehicles and takes appropriate avoidance action, such as reducing speed. Sensata's vision technology is being is incorporated with a number of supporting functions on a system-on-chip (SoC) architecture. Sensata is licensing some of those supporting technologies rather than develop them in-house.
"Our 20-person team does not have the resources to create all the individual pieces of the design," says Jean-Pierre Giacalone, design manager for Sensata's DSP systems architecture. "Licensing IP means we don't have to go down paths that have already been explored. This has significantly reduced our time to market as well as overall R&D expenditures."
Safety standards in the automotive industry are rigorous and allow no room for downtime or failure. Licensing proven IP allows companies such as Sensata to shop the semiconductor industry's best offerings and choose the highest-quality products. "We can pick the best available technology, and the overall quality of our end-product is not degraded just because we didn't design the whole thing ourselves," says Giacalone. "These are proven technologies that our customers can analyze if they need to. But I think it is very reassuring to customers that we aren't going out and reinventing the wheel."
Sensata, in turn, can focus its resources on its core vision technology. "A vision sensor isn't a product with two gates; it can have several," Giacalone explains. "Imagine if we needed to design every single gate. The first hundred or so would likely be perfect but eventually vigilance would wane. [Licensing] allows us to prioritize the things we need to concentrate on."
The bigger picture
In a broader sense, IP licensing also allows the implementation of standards to be quickly propagated to the market. Automotive standards enable a vibrant industry ecosystem by ensuring interoperability across the supplier base, increasing the number of participants by leveling the playing field and ensuring multiple "winners."
Standards also: Foster efficiencies industry-wide, lowering costs across the board
Encourage improvement through competition
Increase safety by establishing baselines that can be independently verified
Enable a replacement parts industry for products with very long lifespan
When General Motors designs a dashboard, for instance, it decides what the radio should look like and how it connects to the chassis. Any number of vendorssay, Alpine and Beckercan compete for that space. Both design systems that look the same and connect to the car the same way. But inside, the electronics are completely different. The result is that GM now has at least two players competing for that space on its dashboard, but the differentiation between the two productsand consumer dynamicsdetermine that neither vendor will "win."
Competition, in turn, drives efficiencies throughout an industry by lowering costs across the board and encouraging continuous improvement. The automotive industry is notoriously price-sensitive, so in case of car radios, Alpine and Becker compete to provide high-quality systems to GM at the lowest possible cost. The radio vendors, in turn, push this cost-sensitivity down throughout their supply chain thus, Alpine and Becker suppliers are also competing on both quality and cost.
Finally, standards enable replacement parts for products with very long lifespans. Unlike the consumer electronics industryin which cell phone designs change every six monthsautomotive specs are around for years, even decades. Even if a vendor discontinues a product or goes out of business, the replacement market guarantees that it is economically viable for another vendor to manufacture a part that meets the original spec.