As Rivals Tussle, Silicon Labs Soars

　　Silicon Labs is riding high. The Austin, Texas-based chip vendor has taken a methodical approach in its pursuit of the IoT market, focused keenly on expanding its wireless portfolio and developing a multiprotocol environment among different wireless networks.

　　These efforts, most recently, resulted in a record $100 million in revenue from the company’s IoT products in the third quarter of 2017.

　　Silicon Labs CEO Tyson Tuttle, buttonholed at the Consumer Electronics Show, conceded that his company has benefited from turmoil among its rivals, who have been preoccupied with M&A upheavals.

　　Tuttle explained that during the prolonged M&A fever, companies facing uncertainty about the future tend to start either canceling programs or losing talent. Instability breeds confusion and anxiety among both customers and employees. “People tend to think, ‘we’ll wait for what will happen,’” said Tuttle.

　　Silicon Labs, on the other hand, has been able to snag a few stars who were formerly with Freescale or NXP Semiconductors. NXP’s acquisition by Qualcomm, originally scheduled to close at the end of 2017, is still pending. Meanwhile, Qualcomm might be acquired in a hostile takeover bid Broadcom launched late last year.

　　Silicon Labs’s edge, for now, is that “our customers know that we are in the IoT business for the long haul,” the CEO said. Silicon Labs is expecting its IoT business to grow at a compound annual growth rate (CAGR) of 25 percent, Tuttle told us. Noting that a half of the company’s IoT revenue is generated from wireless products, he added, “Our wireless business is growing at a 40 percent (CAGR).”

　　Focus on wireless

　　Last month, Silicon Labs announced a plan to acquire Sigma Designs for $282 million in cash. The deal is designed to broaden Silicon Labs' IoT connectivity product portfolio to include Z-Wave, a wireless mesh technology using low-energy radio waves for IoT smart home devices.

　　The acquisition has not closed yet, so Tuttle declined to detail plans for Z-Wave. However, the addition of Z-Wave would mark a crowning moment for Silicon Labs. It has spent several years steadily expanding its wireless portfolio — which now includes Bluetooth, Thread and Zigbee — and patiently developing multiprotocol solutions.

　　According to the Z-Wave Alliance, more than 2,100 interoperable Z-Wave uses have been developed, and more than 70 million Z-Wave products sold since 2001.

　　What about WAN?

　　So, what’s next for Silicon Labs? Any plans to get into NB-IoT or any other low-power Wide Area Network technologies?

　　Tuttle said, “Wide Area Network (WAN) is something we are monitoring,” but the company has no immediate plans in that market.

　　Silicon Labs’ focus has always been on Personal Area Network (PAN) and Local Area Network (LAN), but not WAN. Tuttle remains skeptical of WAN, when [cellular] operators get involved in building IoT networks. The issue for IoT device vendors is, he asked, “How are you going to make money” if you have to shell out fees to cellular networks?

　　Silicon Labs, thus far, has never had to build any relationships with [cellular] operators. For his company, Tuttle sees in WAN “market risks, time-to-market problems and uncertainty of overall development.”

　　He noted that Silicon Labs is no Qualcomm, MediaTek, Huawei or Intel. “We find WAN a difficult landscape for us. Besides, we don’t want to jump in the market where we can’t become a leader.”

　　Tuttle did mention last week’s announcement of a collaboration with Hager Group (Obernai, France). Hager is rolling out a new smart RF module incorporating Silicon Labs’ wireless Gecko SoC, combining 2.4GHz Bluetooth, sub-GHz KNX and Sigfox LWAN connectivity. The module is designed to enable “energy-efficient multiprotocol and multiband connectivity at 2.4 GHz, 868 MHz and 433 MHz,” according to the two companies.

　　In contrast, MediaTek’s CFO David Ku, asked about his company’s IoT strategy, told us, “I think we were too late to get into the low-power wireless home networking technology like Zigbee.” MediaTek, instead, is opting to play to its strength by connecting IoT devices to gateways and the cloud. “Take a look at voice assistant devices like Amazon Echo. We essentially see it as a tablet without a screen,” Ku said.

　　Asked about the company’s lack of wireless technologies such as Zigbee or Z-wave to connect lights in a building, Ku countered that IoT for consumer applications at home is already well established with Wi-Fi, Bluetooth, GPS and 2G and 3G modules. He said, “I’m not sure if consumers need a daisy chain (network topology, like Zigbee.”

　　Separately, MediaTek is probing the notion of installing a small AI SoC in every home-connected device, such as light switches. MediaTek’s low-power AI processor, able to recognize 20-30 key words, is designed to control connected devices by voice. “You can turn lights on and off at home” without using a smartphone or installing Amazon Echo in every room, he explained.

　　Challenges of broad IoT market

　　The biggest challenge facing Silicon Labs, as Tuttle sees it, is “how to make R&D more efficient.” The fragmentation of the IoT market has generated hundreds of IoT applications, with thousands of customers seeking different implementations.

　　Silicon Labs needs to deliver a differentiated portfolio that responds to those needs across varying applications. Designing a separate product for each and every company, however, is inefficient and not scalable. “That’s why it’s so important for us to develop a common platform,” Tuttle said. The goal is to offer one piece of hardware supported by multiple protocols in software, which then aggregate many functions.

　　This is where RAIL comes in, said Tuttle. The company developed a common RAdio Interface Layer, called RAIL, on which both Bluetooth and Zigbee stacks run. Notably, Silicon Labs acquired in 2016 real-time OS supplier Micrium. Silicon Labs’ engineering team has “bent its RTOS kernel for connected IoT applications,” as Daniel Cooley, senior vice president and general manager of IoT products at Silicon Labs, told us in a previous interview with EE Times.

　　Silicon Labs designed a Radio Scheduler, which manages requests from the protocol to access the radio while the Micrium OS kernel resource-sharing between the stacks. In short, IoT device developers can use RAIL as a common API and interface to share the radio.

　　Tuttle said that prioritizing projects and simplifying IoT designs for its customers is critical. Developing modules is also important. “Modules can help. In fact, 25 percent of our IoT revenue comes from our module business.”

　　Tuttle sees Silicon Labs’ advantage today is that “our customers know that we’re committed to the IoT market. We are a one-stop shop for IoT, supporting everything from software to hardware, and all the way to modules.” That market confidence — the notion that Silicon Labs “will be always there with a complete IoT solution including the company’s own software” —can carry his company a long way into the future, Tuttle explained.