Impact of AI on automotive and IoT, and opportunities in China€¦ · INTERNATIONAL BUSINESS STRATEGIES, INC. 632 Industrial Way | Los Gatos CA 95030 | USA | 408 395 9585 | 408 395

INTERNATIONAL BUSINESS STRATEGIES, INC.

632 Industrial Way | Los Gatos CA 95030 | USA | 408 395 9585 | 408 395 5389 (fax)

www.ibs-inc.net | [email protected]

IMPACT OF AI ON AUTOMOTIVE AND IOT, AND OPPORTUNITIES IN CHINA

SEPTEMBER 16, 2019

IBS

© 2019 INTERNATIONAL BUSINESS STRATEGIES, INC. ALL RIGHTS RESERVED. MS-FDSOI9.1619 SLIDE 2

INTERNATIONAL BUSINESS STRATEGIES BACKGROUND

▪ Has been in business for over 30 years

▪ Interface with most global leaders in electronics industry, with customers in U.S., Europe, South

Korea, Japan, Taiwan, China, India, and others

▪ Interface with and support major global corporations such as Intel, Qualcomm, Broadcom, Microsoft,

Nokia, Samsung, SK Hynix, Sony, Toshiba, Apple, Cisco, Huawei, IBM, Fujitsu, Canon, NEC,

Hitachi, Renesas, TSMC, STMicroelectronics, TI, ARM, Cadence, Synopsys, Mentor Graphics,

Seagate, Globalfoundries, SMIC, NXP, and others

▪ Interface with and support financial institutions such as Goldman Sachs, Carlyle, Blackstone,

CitiGroup, Warburg Pincus, Walden, KKR, Morgan Stanley, Credit Suisse, BNP Paribas, Bain

Capital, Bank of America, TPG, and others

▪ Published following books on China: China’s Globalization (How China Becomes No. 1),

Chinamerica (McGraw Hill), and Artificial Intelligence: How AI and IA Reshape the Future

Contributed to Wall Street Journal, Economist, New York Times, Forbes blogs, China Daily, Global

Times editorials, EE Times, Xinhua, and others

IBS HAS HIGH MARKET SHARE ON TECHNOLOGY AND STRATEGY BUSINESS

http://www.chinasglobalization.com/

http://www.chinasglobalization.com/

IBS

© 2019 INTERNATIONAL BUSINESS STRATEGIES, INC. ALL RIGHTS RESERVED.

$471.3B

$407.6B$432.4B

$467.5B$508.2B

$554.4B

$606.1B

$663.7B

$727.3B

$797.6B

$875.2B

$961.1B

$1,056.5B

$0B

$285B

$570B

$855B

$1,140B

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Sem

iconducto

r M

ark

et

MCU

DSP

Standard Cell ASIC

FPGA

Special-Purpose Logic

General-Purpose Logic

Display Driver

Analog

MOS Memory

MPU

Other Semiconductor

MS-FDSOI9.1619 SLIDE 3

SEMICONDUCTOR MARKET BY PRODUCT

SEMICONDUCTOR MARKET WILL BE $1 TRILLION IN 2030

IBS


SEMICONDUCTOR MARKET BY PRODUCT (CONTINUED)

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

MPU ($M) 47,294 43,922 45,073 47,809 51,256 55,325 59,928 65,190 71,116 77,900 85,504 94,080 103,666

Growth rate (%) NA (7.13) 2.62 6.07 7.21 7.94 8.32 8.78 9.09 9.54 9.76 10.03 10.19

MCU ($M) 18,272 16,124 16,512 17,440 18,441 19,535 20,709 21,980 23,361 24,853 26,474 28,263 30,242

Growth rate (%) NA (11.76) 2.41 5.62 5.74 5.93 6.01 6.14 6.28 6.39 6.52 6.76 7.00

DSP ($M) 3,194 3,124 3,282 3,458 3,649 3,858 4,087 4,333 4,598 4,884 5,195 5,532 5,891

Growth rate (%) NA (2.19) 5.06 5.37 5.52 5.71 5.94 6.02 6.11 6.23 6.37 6.48 6.50

Standard cell ASIC ($M) 9,235 8,503 8,853 9,352 9,986 10,741 11,616 12,611 13,748 15,060 16,560 18,274 20,237

Growth rate (%) NA (7.93) 4.12 5.64 6.78 7.56 8.14 8.57 9.02 9.54 9.96 10.35 10.74

FPGA ($M) 5,192 5,116 5,460 5,855 6,291 6,774 7,311 7,922 8,614 9,405 10,272 11,225 12,270

Growth rate (%) NA (1.46) 6.72 7.24 7.45 7.68 7.92 8.36 8.74 9.18 9.22 9.28 9.31

Special-purpose logic ($M) 85,209 78,128 81,050 86,659 93,037 100,238 108,378 117,611 127,890 139,413 152,309 166,687 182,956

Growth rate (%) NA (8.31) 3.74 6.92 7.36 7.74 8.12 8.52 8.74 9.01 9.25 9.44 9.76

General-purpose logic ($M) 1,766 1,538 1,571 1,606 1,642 1,675 1,706 1,734 1,758 1,779 1,798 1,815 1,831

Growth rate (%) NA (12.91) 2.16 2.22 2.24 2.00 1.87 1.63 1.37 1.19 1.06 0.99 0.84

Display driver ($M) 6,204 5,725 5,950 6,198 6,577 6,996 7,451 7,957 8,523 9,156 9,884 10,685 11,568

Growth rate (%) NA (7.72) 3.92 4.17 6.12 6.37 6.51 6.78 7.12 7.43 7.94 8.11 8.26

Analog ($M) 57,963 53,175 55,164 58,623 62,633 67,036 71,835 77,036 82,552 88,405 94,611 101,196 108,168

Growth rate (%) NA (8.26) 3.74 6.27 6.84 7.03 7.16 7.24 7.16 7.09 7.02 6.96 6.89

Subtotal Nonmemory ($M) 234,329 215,355 222,915 237,000 253,512 272,178 293,021 316,374 342,160 370,856 402,606 437,758 476,829

Growth rate (%) NA (8.10) 3.51 6.32 6.97 7.36 7.66 7.97 8.15 8.39 8.56 8.73 8.93

DRAM ($M) 99,842 70,528 77,490 86,726 97,446 110,348 124,891 141,090 158,938 178,217 199,496 222,897 248,552

Growth rate (%) NA (29.36) 9.87 11.92 12.36 13.24 13.18 12.97 12.65 12.13 11.94 11.73 11.51

NAND Flash ($M) 55,561 42,993 48,307 54,157 60,623 67,637 75,368 83,780 93,004 103,178 114,394 126,886 140,881

Growth rate (%) NA (22.62) 12.36 12.11 11.94 11.57 11.43 11.16 11.01 10.94 10.87 10.92 11.03

Other memory ($M) 4,325 4,127 4,435 4,749 5,098 5,492 5,933 6,421 6,964 7,574 8,264 9,054 9,956

Growth rate (%) NA (4.57) 7.46 7.07 7.35 7.74 8.03 8.22 8.46 8.75 9.11 9.56 9.97

Subtotal Memory ($M) 159,728 117,649 130,232 145,632 163,167 183,477 206,193 231,290 258,906 288,969 322,153 358,836 399,389

Growth rate (%) NA (26.34) 10.70 11.83 12.04 12.45 12.38 12.17 11.94 11.61 11.48 11.39 11.30

TOTAL IC ($M) 394,057 333,003 353,146 382,632 416,679 455,655 499,214 547,665 601,066 659,825 724,759 796,594 876,218

Growth rate (%) NA (15.49) 6.05 8.35 8.90 9.35 9.56 9.71 9.75 9.78 9.84 9.91 10.00

Other semiconductor ($M) 77,196 74,631 79,258 84,917 91,473 98,699 106,862 115,987 126,229 137,741 150,441 164,552 180,251

Growth rate (%) NA (3.32) 6.20 7.14 7.72 7.90 8.27 8.54 8.83 9.12 9.22 9.38 9.54

TOTAL Semiconductor ($M) 471,254 407,634 432,404 467,549 508,152 554,354 606,075 663,652 727,295 797,566 875,200 961,146 1,056,469

Growth rate (%) NA (13.50) 6.08 8.13 8.68 9.09 9.33 9.50 9.59 9.66 9.73 9.82 9.92

IBS


KEY ISSUES IN SEMICONDUCTOR MARKET

▪ Semiconductor market is projected to decline by 13.50% in 2019 but grow by 6.08% in

2020

▪ Special-purpose logic market will decline by 8.31% in 2019 and grow by 3.74% in 2020

Projection for special-purpose logic market is $183.0 billion in 2030 compared to $85.2

billion in 2018, indicating CAGR of 6.57%

▪ MPU market is projected to be $103.7 billion in 2030 compared to $47.3 billion in 2018,

indicating CAGR of 6.76%

Processors represent key IP in most applications

▪ Analog market will decline by 8.26% in 2019 and grow by 3.74% in 2020

• TI and ADI are gaining market share in short term

• Companies in Asia are increasing their emphasis on high-volume analog products

such as power management

IBS


KEY ISSUES IN SEMICONDUCTOR MARKET (CONTINUED)

▪ DRAM market is projected to decline by 29.36% in 2019 and grow by 9.87% in 2020

• Samsung’s 12Gb LPDDR5 is getting strong demand

16Gb LPDDR5 is planned for volume production in Q4/2019 or Q1/2020

• U.S.-China trade dispute is positive for Samsung and SK Hynix but negative for

Micron

▪ NAND market is projected to decline by 22.62% in 2019 and grow by 12.36% in 2020

• Growth of GB volume is projected to be 39% in 2019 and 43% in 2020

• GB pricing of SSDs is <$0.08 for consumer products

• 96-layer QLC 3D NAND products will be in high volume in Q4/2019

INCREASE IN TARIFFS RAISES PRICING FOR MANY CONSUMER PRODUCTS IN U.S.

AND WILL RESULT IN WEAKENING CONSUMER BUYING POWER, WHICH WILL

IMPACT GROWTH OF SEMICONDUCTOR MARKET

IBS


WHERE IS AI AT EDGE TODAY AND WHERE WE ARE GOING?

▪ AI improves productivity of people as well as machines

• Machines already have high physical power such as aircrafts and excavators

• AI will provide brain power and analytics capabilities to machines

Machines will have much greater brain power than humans for many tasks

• Many industries and structures of society will be transformed by AI capability

• While intelligent machines will eliminate many job positions, new ones will be created

▪ AI in cloud and at edge is enabled by processors, algorithms, data, and connectivity

• Combination of many technologies is required to optimize benefits of AI

• In many cases, sensors represent key source of data inputs

• Increase in intelligence of machines will have major impact on people’s lives as well as

commercial environment

IBS


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Human Muscle Power

240 Years

24 Years


WHERE IS AI AT EDGE TODAY AND WHERE WE ARE GOING? (CONTINUED)

INCREASING MACHINE INTELLIGENCE HAS DISRUPTIVE IMPACT ON HOW ANALYSIS IS DONE

PERFORMANCE OF MACHINES VS. HUMANS

IBS


WHERE IS AI AT EDGE TODAY AND WHERE WE ARE GOING? (CONTINUED)

▪ AI at edge is already in high volume, eg, camera functionality on smartphones

• Approximately 3.5 billion smartphones are in use globally, and picture taking is one of key benefits

Picture-taking capabilities on smartphones are based on highly sensitive image sensors and

5TOPS to 7TOPS NPUs for image enhancement, where cost of NPU is $0.03

Application processors have 7nm, 6.9 billion transistor count, and $1.30 manufacturing cost for 1.0

billion transistors

• Autonomous driving is example of IoT at edge, with 100TOPS needed for levels 4 and 5

autonomous vehicles

▪ Emergence of smart cities, smart homes, smart factories, smart agriculture, smart logistics, and other

applications will drive adoption of IoT

▪ 5G will provide high bandwidth into cloud

However, with tens of billions of IoT-based data generators, local AI-based processing is critical

SEMICONDUCTOR AND ELECTRONICS INDUSTRIES ARE POSITIONED FOR HIGH GROWTH,

BUT WITH NEED FOR INNOVATION

IBS


STEPS FOR AI

1. AI will automate tasks done by humans

• Eg, image optimization on smartphones, automated warehouses and factories, autonomous

driving, automated financial transactions, automated call centers, and voice recognition

• Intelligent machines will displace hundreds of millions of jobs

2. Creation of new industries using AI

• Preventative medicine with special sensors that can detect blood sugar content will represent very

large opportunity because of ability to increase longevity and improve productivity of humans

• Digital twin concept will become very large market

Initially being adopted for specific components in jet engines

Every component and semiconductor product shipped in future will have digital twin

• AR and VR devices will also be very large market

These devices will allow interactive and immersive interfaces in work, at home, and social

activities such as gaming

IBS


STEPS FOR AI (CONTINUED)

• Gaming will be key area for developing many areas of AI-based technology

NVIDIA is highly visionary in gaming applications

Google, Sony, Microsoft, and others are promoting gaming in cloud

• Robots, drones, and autonomous vehicles will also be large market

Factories will be dark, and 3D printing will produce high volume of products as well as prototypes

3. AI will involve adopting virtual digital twin of people

• IQ of virtual digital twin will be 1000X more powerful than human brain for many tasks

Analytics will be done by machines, but some capabilities of human brain cannot be replicated

such as emotion

• Human capabilities may dramatically increase through interface with virtual digital twins

People will not be required for many existing tasks

MANY AREAS OF TECHNOLOGY WILL NEED TO BE ENHANCED TO OPTIMIZE AI CAPABILITIES

IBS


WHERE ARE WE WITH IOT?

▪ Market for IoT is positioned for high growth because of effective connectivity

into cloud with NB-IoT and other protocols in LPWA

5G will be another important connectivity into cloud

▪ There will be multiple levels of cloud

Each level will require processing, analytics capabilities, and connectivity

▪ IoT will have billions or tens of billions of units

• It is critical to have local processing and data analytics as well as security

• Amount of processing power that can be supported will be based on trade-off

of power, performance, and cost as well as available algorithms

• Analysis indicates that FD-SOI-based processors represent best option for

many IoT applications that need ultra-low power and RF connectivity

IBS


WHERE ARE WE WITH IOT? (CONTINUED)

▪ IP ecosystem will need to be built for many edge-based applications

• Sensors are key IP

• Europe has leadership MEMS sensor technology

Leaders are CEA-Leti, imec, and Fraunhofer-Gesellschaft institute

• Key requirement will be establishment of required manufacturing capacity to

maintain high market share of global markets

IOT GROWTH WILL ACCELERATE AS DATA MONETIZATION CAPABILITIES

BUILD MOMENTUM

IBS


Low performance Medium performance High performance

Water meters

Electricity meters

Gas meters

Street lighting

Parking meters

Moisture measurement for agriculture

Tracking and tracing systems

Smart logistics systems

Smart locks

Bike sharing devices

Low-end fitness trackers

Baby monitors

Smart thermostats

Tens of thousands of other devices

Smartwatches

Smart fitness trackers

Smart glasses

Level 2 autonomous vehicles

Smart cameras

Augmented reality (AR) devices

Levels 3, 4, and 5 autonomous vehicles

3D facial recognition and security systems

Simultaneous translation devices

Medical diagnostics tools

Virtual reality (VR) devices

Industry 5.0 products

Smartphones


IOT SEGMENTATION

IOT AND AI WILL BE KEY FACTORS IN GROWTH OF SEMICONDUCTOR MARKET

IBS


IOT SEMICONDUCTOR MARKET

IOT ASSPs REPRESENT KEY GROWTH AREA

$17.8B

$20.4B$22.6B

$25.0B$26.9B

$29.7B

$32.9B

$36.5B

$40.6B

$45.2B

$50.5B

$56.7B

$0B

$20B

$40B

$60B

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

IoT S

em

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ark

et

Analog

Controllers/Processors

ASSPs

Connectivity

Memory

IBS


KEY ISSUES IN IOT AND AI

▪ Segmentation of IoT into various performance levels provides visibility into technologies

required to support applications

▪ Processor engines represent key IP along with supporting AI-based algorithms

CUDA concept of NVIDIA is effective for building application base for GPUs in high-

performance applications

▪ Sensor technology is critical for many applications

Image sensors represent key IP for many applications

Leaders in image sensor market are Sony, Samsung, OmniVision, and ON Semiconductor

▪ Monetization of data from IoT applications will represent large market opportunity for data

aggregation companies

It will be important to have security of data

MULTIPLE REVENUE STREAMS IN IOT AND AI HIERARCHY

IBS


$39.6B$37.4B

$40.3B

$44.3B

$49.0B

$54.4B

$60.7B

$67.9B

$76.2B

$85.7B

$0B

$23B

$46B

$69B

$92B

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

Sem

iconducto

r in

Auto

mto

vie A

pplic

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ns MCU

DSP

Standard Cell ASIC

Special-Purpose Logic

General-Purpose Logic

Display Driver

Analog

Memory

MPU

Discrete and Other

FPGA

Fusion Processor

Sensor


SEMICONDUCTOR MARKET IN AUTOMOTIVE

HIGH GROWTH POTENTIAL FOR FUSION PROCESSORS, SENSORS, AND

POWER SEMICONDUCTORS

IBS


KEY ISSUES IN AUTOMOTIVE SEMICONDUCTOR MARKET

▪ Automotive semiconductor market is projected to be $85.7 billion in

2027 compared to $39.6 billion in 2018, indicating CAGR of 8.96%

▪ Fusion processor market is projected to be $16.8 billion in 2027

▪ Discrete and other product category includes power devices for

supporting electrification of vehicles

▪ Number of semiconductor companies that were effective in automotive

market in past will experience decline in market share in future

This provides opportunities for new companies

AUTOMOTIVE MARKET IS GLOBAL, BUT CHINA WILL HAVE

HIGHEST GROWTH

IBS


1.2 2.0 3.3 5.4 8.513.1

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PRODUCTION VOLUME OF ICE-BASED VEHICLES AND EVs

EVs WILL REPRESENT LARGE MARKET OPPORTUNITY FOR SIC

IBS


TECHNOLOGY DECISIONS FOR AI

▪ FinFET is in high-volume production at 7nm

• One billion transistors cost $1.30 at chip level based on TSMC’s wafer cost

• Apple’s A12 chip has 6.9 billion transistors and costs $18.26

▪ GAA with nanosheet structures at 3nm is expected to be in volume production in 2021

• With EUV, 3nm GAA will require 12 to 20 layers

• 20mm² die will have 10 billion transistors (not needed for most IoT applications)

▪ Lower limit of bulk CMOS is 22nm

(20nm is difficult as demonstrated by TSMC and Samsung)

▪ FD SOI is best option for most IoT applications

• Transistor cost for 28nm, 22nm, 14nm, and 12nm FD SOI is comparable to bulk CMOS and

FinFET

Key reason for cost competitiveness of FD SOI is lower number of mask steps

IBS


TECHNOLOGY DECISIONS FOR AI (CONTINUED)

• FD SOI has lowest combination of active and standby power consumption of any technology

Use of back biasing gives lower threshold voltage than any other technology

• FD SOI also provides more effective support for RF connectivity and baseband functionality

than any other technology

60GHz 802.11ay-equivalent chips are expected to be in high-volume production in H2/2019

• Migration to 12nm is realistic

10nm is potential for FD SOI

Key requirement is to build strong design ecosystem, with access to broad base of qualified IP

▪ Other technologies such as III-V compounds will also be important for specialty applications

▪ Material research continues to have high level of importance for development of new applications

TECHNOLOGIES WILL NEED TO BE DETERMINED BY UNIQUE REQUIREMENTS OF

APPLICATIONS

IBS


SOME AREAS OF EMPHASIS BY CHINA

Area of emphasis Situation in 2020 Situation in 2030

5G infrastructure China will be leader by two years or more over most countries

with exception of South Korea

Many industries in China will be global leaders because of

access to high bandwidth, low latency, and low cost

5G smartphones China is projected to have 65% of global 5G smartphone market China will likely have very high market share and

strengths in augmented reality and imaging

Automobile electrification China will be volume leader, but Tesla is technology leader China will be volume and technology leader for mass

market, with emphasis on exports as well as local market

Autonomous vehicles China will lag leaders by two years China will be volume leader for mass market, with internal

supply of key processors and supporting algorithms

Factory automation Chinese factories are competitive because of support from Hon

Hai Precision Industry (Foxconn Technology Group) and others

China will be global leadership with usage of smart robots,

blockchain technology, and strong supply chains

Medical electronic China will lag leaders by over two years China will have strong capabilities because of its imaging

technology and high-bandwidth communications

Cashless society Alipay and WeChat Pay are leaders China’s leadership position will strengthen, with high-

security financial transactions

Smart agriculture China will lag leaders by two years or more China will become leader through vertical agriculture

concepts, IoT, and algorithms

Virtual reality China will lag leaders by two or three years China will become global leader in adoption of VR for

many applications

AI China will lag leaders by two or three years China will provide globally competitive AI, with use in

many applications

IBS


Δ0.6 Δ1.0 Δ1.2 Δ1.4 Δ1.60.2

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SUB-6GHZ 5G BASE STATION INSTALLATION IN CHINA

REPRESENTS KEY FOUNDATION FOR MANY APPLICATIONS

IBS


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5G SMARTPHONE VOLUME

CHINA IS LEADER IN 5G SMARTPHONES

IBS


6.2% 8.5% 10.6% 11.2% 13.5% 15.9% 18.6% 22.2% 27.2%

0.3%0.8%

2.1%

4.1%$129.9B

$139.0B

$164.2B

$212.3B $215.8B

$251.6B

$304.6B

$372.7B

$458.3B

$0B

$100B

$200B

$300B

$400B

$500B

2011 2013 2015 2017 2019 2021 2023 2025 2027

Sem

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a TOTAL SEMICONDUCTORMARKET IN CHINA

Supply from Foreign Semiconductor Companies

Supply from Chinese Semiconductor Companies

Impact of Tariffs

Supply from Chinese Semiconductor Companies (without Tariffs)


SEMICONDUCTOR SUPPLY IN CHINA

IBS


2.6%

1.6%

2.0%

3.0%

8.1%

$129.9B$139.0B

$164.2B

$212.3B $215.8B

$251.6B

$304.6B

$372.7B

$458.3B

19.6% 27.7% 34.6% 39.7% 43.3% 47.9% 53.0% 60.0% 64.2%

$0B

$125B

$250B

$375B

$500B

2011 2013 2015 2017 2019 2021 2023 2025 2027

Sem

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Foreign Electronics Equipment Companies Chinese Electronics

Equipment Companies

Impact of Tariffs

Chinese Electronics Equipment Companies (without Tariffs)


SEMICONDUCTOR CONSUMPTION IN CHINA

IBS


CONCLUSION

▪ AI is at initial stage of mass adoption and will have disruptive impact on many industries and

lifestyle of people

• Key building blocks for AI are algorithms that provide intelligence to machines

• Scalable performance of machines is based on processors and algorithms

▪ Cost of one billion transistors for 7nm FinFET is $1.30 (12nm FD SOI will have comparable

cost)

• This allows high-performance processors to be used in AI-based edge applications

• Key complementary capability is in sensors

• Image sensor volume will be 21.1 billion units in 2027

Manufacturing capacity will be almost one million wafers per month

• Other sensors may also have very high volume

Important requirement will be adequate manufacturing capacity

IBS


CONCLUSION (CONTINUED)

▪ Autonomous transportation is AI-based edge application that needs high-performance

processors, eg, 100TOPS

• Power consumption should be under 10W

• Requires connectivity to camera modules, radar modules, and potential LIDAR

• Needs 5G connectivity to give low latency

▪ Smart cities and smart homes will need installation of billions of smart IoT devices

• One key requirement is to have battery lifetime of many years

• This requires ultra-low power or self-powering capabilities

▪ Wearable devices for preventative medicine will be very high-volume application for AI and IoT

Key requirements are specialty sensors and low-power processors

AI WILL REPRESENT ONE OF LARGEST OPPORTUNITIES THAT WILL OCCUR IN

SEMICONDUCTOR AND ELECTRONICS INDUSTRIES

Documents

Impact of AI on automotive and IoT, and opportunities in China€¦ · INTERNATIONAL BUSINESS STRATEGIES, INC. 632 Industrial Way | Los Gatos CA 95030 | USA | 408 395 9585 | 408 395