Cliff Hirsch, Publisher, Semiconductor Times

An inside look at innovative semiconductor start-ups

The Q4 2009 revenue numbers are rolling in, and it's clear that the semiconductor industry has made a miraculous recovery from an unprecedented low in 2008. Some would say it's a jobless recovery and that the strong generally got stronger while several weaker players withered away. Such is the law of the jungle.

If top-line revenue growth, cost cutting and free cash flow were the focus for 2009, what does that mean for innovation? Even with semiconductor investment at historic lows, more than a few areas saw major progress. Light-emitting diode (LED) innovation is pressing on as the world embraces solid-state lighting. Many companies are driving the migration from III-V processes to lower cost, higher integration CMOS for wireless power amplifiers (PAs) and front-ends. In general, wireless continues to see much activity, ranging from front-end to baseband, low-frequency radio frequency identification (RFID) to 60GHz, and miles to millimeters. The next generation of high-speed links is beginning to emerge, including Universal Serial Bus (USB) 3.0, 60GHz wireless and Intel's LightPeak 10G high-speed optical cable technology.

Video continues to see innovation in areas such as mobile video communications, codec standards, and 3D and Quad-HD displays. Although not a semiconductor, but intimately related, the pace of battery innovation is increasing, from automotive- to chip-scale batteries. 2009 was the year of the consumer microelectromechanical systems (MEMS) gyroscope, and the pace of MEMS innovation is accelerating. Lastly, the printed electronic industry is still in its infancy, but making great strides.

With all that said, my favorite start-up during last quarter was Energy Micro AS, a company founded in 2007 to develop "the world's most energy friendly microcontrollers." Those that know me know I am not a fan of new processor architectures. They are a dime a dozen, success is rare and graveyards are littered with commercial failures. The microcontroller arena is also subject to the market power of incumbents, channel breadth and depth, and challenges related to building scale based on thousands of low-volume designs.

Countering these points, Energy Micro uses the industry-standard ARM Cortex-M3 architecture, leveraging ARM's dominance and tool chain. And the company is already engaged with high-volume customer partners.

Energy Micro is 100 percent owned by its founders and employees, and has raised a scant US$6 million to date. I like capital efficiency, sweat equity and when founders' capital is on the line. The founders hail Chipcon, which they sold to TI for $200 million in January 2006. Prior success is worth a lot.

In talks with the company, it is clear that they have really thought through the issue of power consumption, not only addressing one or two issues, but approaching it as a comprehensive, holistic and system- and application-level problem. Energy Micro's EFM32 Gecko microcontroller family incorporates numerous energy-saving features such as peripheral operation without central processing unit (CPU) intervention and, while the CPU is sleeping, fast wake-up, ultra-low standby current, multiple energy modes, ultra-efficient peripherals and low active mode current consumption.

Energy Micro argues that its innovations in the EFM32G have been proven to extend battery life by a factor of four, compared to existing 8-, 16- and 32-bit microcontrollers from companies such as TI, Silicon Labs, NXP, ST, Microchip and Atmel, whether based on proprietary or standard architectures such as the 8051 and ARM Cortex-M3 and M0.

The EFM32G family is comprised of 22 different microcontrollers with a variety of features such as an analog-to-digital converter (ADC), DAC, liquid crystal display (LCD) controller, timers, general purpose input/output (GPIO), universal asynchronous receiver/ transmitter (UART), direct memory access (DMA) and advanced encryption standard (AES) block. The devices are available in a variety of packages and are fabricated by TSMC in an 180nm process.

The devices have been designed in close partnership with leading companies within the energy metering, home and building automation, alarm and security, and medical systems industries. Energy Micro believes that these applications collectively comprise a billion unit opportunity.

The first products are currently sampling with lead customers. Kamstrup A/S, a leading European energy metering company, plans to introduce products containing the EFM32 in 2010. VELUX A/S, one of the strongest brands in the global building materials and home improvement industry, is also an early partner customer.

A large, growing market opportunity, comprehensive product family, product shipment and customer wins in a few short years with only $6 million in capital is quite impressive. That's why Energy Micro is my pick this quarter.

Geir Førre, President and CEO Øyvind Janbu, CTO Eirik Jørgensen, VP, Engineering John Helge Fjellheim, VP, Worldwide Sales Hilde Mobekk, Director, HR and Administration Zalina Shaher, VP, Operations

P.O. Box 4633 Nydalen N-0405 Oslo NORWAY (T) +47 23 00 98 00 (F) +47 23 00 98 01 (W) www.energymicro.com

Cliff Hirsch (cliff@pinestream.com) is the publisher of Semiconductor Times, an industry newsletter focusing on semiconductor start-ups and their latest technology. For information on this publication, visit www.pinestream.com.