Chips can't be ruled out in Toyota failures, says Freescale CEO

The first keynote speaker here at IEF was Rich Beyer, Freescale’s CEO and  chairman, who forecast the ways the market had changed and how it will change in the future.

But he also talked about Toyota. He said that when Toyota had to recall its vehicles, he thought hard about whether semiconductor companies could rule themselves out as a potential cause.

He said: “Toyota is a modest customer of Freescale. We don’t have any components in the area that they have had difficulties with. I thought that is there anything we provide that could be associated with these kinds of problems, and I cannot say categorically not.”

However, he said, the automotive industry has the most stringent quality standards of anything Freescale provides. He said that the goal is zero parts per million (PPM) defects Freescale measure ourselves very stringently on the introduction of new products. For consumer markets, 40 PPM is sufficient, he said.

Some crises will cause the rest of the industry, including the software industry, to rise to the challenge.

Talking about the industry itself, Beyer said that there will be three segments in the semi industry. One  type will be commodity products, the second sector will be highly  specialised components developing at their own pace. But, he said, the  overwhelming part of the semiconductor industry will be when companies  provide a solution that’s integrated with the processor.

He said that over the last 30 or 40 years there have been particular periods of growth including energy, computing, the internet, and mobile communications. He said: “The ups and downs of our industry closely mirror the ups and downs of our GDPs.”

On the basis of Moores Law he said that Freescale was adding more and more functionality to chips. A multicore CPU from Freescale now has over 625 million transistors.

At the same time, he said, the cost and complexity of making these circuits have gone up at a similar astronomic rate. He said that in 1980 a new fab cost $50 million on 1.5 micron technology on 150mm wafers. By 1990, he said,  things started to get much more challenging, it took $500 million to build a fab. TSMC changed the world in the 1990s. In 2000, a 300mm wafer 90 nanometer technology cost $5 billion, beyond the reach of practically every semiconductor company in the world, including Freescale. He said that companies in the semi industry have had to change, and

Freescale has too. He said that Freescale has had to move to a fabless model, with foundries playing a very significant role. He said that Freescale has had to form alliances, to live in a world of interoperability and the models are changing quite significantly in  the industry.

Freescale is a $4 billion semiconductor company, he said, and focuses on networking, automotive space, industrial space and selected areas

He said: “What we bring to the market first and foremost are embedded processors, including MCU, MPUs and DSPs. We sound those with quite a bit of software, sensors, RF and control (analogue).”

He said that in the automotive industry, the electronic content began in the late 1970s. He said: “Today automobiles are absolutely swamped with  semiconductors from the engine into all elements of the body, into  infotainment and into safety and so forth. From 35 years ago when  expectation was we would provide a very simple component, we have to provide the operating system, communication drivers and some relatively low level application software.”

He said that companies that were once competitive now have to cooperate. Freescale  is cooperating with TRW and Denso to develop safety standards in  automobiles.