Vol. 23, No. 8◆◆ hansenreport.com October 2010

Semiconductor LTE Stirs Excitement and Technology Update: Skepticism SOI and 3D Chips Potential Infotainment, Telematics and “LTE provides a step function improve- Safety Applications ment over 3G and that will make a big I had the occasion to talk recently with difference in many applications,” said Herb Reiter, a well-connected semicon- When you listen to some of its champi- Derek Kuhn, who was responsible for ductor industry consultant, who believes ons, it’s easy to get excited about the po- emerging technologies, including LTE, at the automotive electronics industry tential impact of Long Term Evolution Alcatel-Lucent before joining software should consider the benefits of two semi- (LTE) wireless networks on telematics, maker QNX as vice president of market- conductor manufacturing technologies, infotainment and even safety systems. Ide- ing. While at Alcatel-Lucent, Mr. Kuhn one old and one new. Relatively mature, ally, LTE will provide cars with super-fast, founded the ng Connect Program to pro- silicon on insulator (SOI) technology has always-on, Internet Protocol (IP) data mote LTE adoption worldwide. been used for a number of years in high- communications equal to what many “LTE will facilitate cloud-based, ma- temperature automotive applications by people have at home. Verizon Wireless chine image processing and recognition Toyota and Denso, among others. New to expects LTE’s average data rates will be for things like driver monitoring,” Mr. the market are 3D chips—stacked die in- five to 12 megabits per second (Mbps) on Kuhn said. “And because voice goes over terconnected with through silicon vias. the downlink and two to five Mbps on the an IP connection, you can now use According to Mr. Reiter, semiconduc- uplink in real-world, loaded-network en- wideband voice and do natural language tor suppliers such as IBM and Intel have vironments. That’s about five times faster voice recognition in the cloud. Drivers 3D solutions for computing applications. than 3G. The air latency of LTE will be won’t need to use a command structure Qualcomm, STMicroelectronics, roughly half that of 3G: 27 milliseconds any more. They will be able to talk to Panasonic, Texas Instruments and compared with 55 to 60 milliseconds. their vehicle and it will figure out what Samsung have developed prototype 3D And LTE is coming soon. Heavily in- they want.” ICs for the cell phone industry that are vested in the new technology, Verizon is Another LTE champion, Aparna smaller, lighter and consume less power on track to launch LTE networks in 25 to Khurjekar, executive director in Verizon’s than 2D versions. 3D stacked chips could 30 U.S. markets, covering 100 million business solutions group, expects that LTE potentially find high volume cell phone people, by year end. Verizon plans to roll will enable new and improved telematics applications in as soon as two years. out LTE over its entire U.S. footprint by solutions that will invigorate the tele- Despite the fact that the auto industry the end of 2013. matics industry. Verizon’s 2G network is not usually inclined to adopt brand new presently supports OnStar, the world’s technology, Mr. Reiter feels that the ad- Potential LTE Applications number-one telematics service provider. vantages are great enough that it should “There is an enormous amount of excite- While most are doable over existing 3G begin exploring possible automotive ap- ment among the OEMs about LTE. Most networks, they will almost certainly work plications for 3D ICs. “In addition to of the top-ten carmakers who are not yet better over LTE. Multiple applications can space and power savings, the technology doing telematics have indicated that not run simultaneously. lets you combine a very smart 28-nano- only do they want to do safety, security ◆ Crowd-sourced traffic information meter processor in the same package with and diagnostics [OnStar’s business case] in ◆ Dynamic, up to the moment maps a proven semiconductor switch to drive the next two to three years, but they want ◆ Off-board natural language speech an automotive actuator. ... Another ben- to grow beyond that into convenience recognition (voice texting) efit with the stacked chips closer together and infotainment,” Ms. Khurjekar said. ◆ Remote maintenance (vehicle software is RF radiation is less of an issue.” According to Ms. Khurjekar some of and application updates) 3D devices are made by stacking chips LTE’s most promising automotive applica- ◆ In-car hotspot: Wi-Fi access for portable made from wafers that have had 95% of tions include mobile hotspots that will let devices the silicon material removed. “The cir- passengers connect their smartphones and ◆ Streamed radio, TV and video content cuitry that is doing the work is only in the tablet computers seamlessly to the Web, from the cloud top 10 micrometers or the top 1% of the and the ability to do video calling from ◆ Always-on access to richer traffic wafer,” said Mr. Reiter. “So there is an the vehicle. information Turn to Semiconductors, page 3 Turn to LTE, page 2 LTE... Continued from page 1 Despite the enthusiasm, not only from Safety According to Mr. McNamara, automo- pioneers but from people I’ve spoken with I got fired up about LTE after talking tive OEMs would welcome some govern- from the automotive industry, some some months ago with Dan Dodge, CEO ment involvement in establishing a clear people are pretty skeptical, not only about of QNX, whose software supports the ng set of requirements and network standards telematics but also about LTE’s impact on Connect Program’s LTE Connected Car for vehicle-to-vehicle communications. that industry. “Don’t believe the hype,” concept vehicle. Mr. Dodge described “I’m personally convinced it is going to be cautioned industry veteran Russ Shields, how he envisions the role of LTE in auto- very difficult for private industry to take who believes that LTE’s impact won’t be motive safety applications: off the shelf technology and apply it to an felt until 2015 or 2016 at least. He cited a “I’m driving along, and my chassis automotive safety system,” he said. number of reasons for this: First, the LTE control system detects that the wheels Gee Rittenhouse, vice president of modem will initially be quite expensive slipped. I should be able to upload that to wireless research for Lucent Technolo- and coverage in rural areas insufficient a backend server that aggregates that data, gies’ Bell Labs, has similar doubts. “Even early on. Second, Verizon will probably looks at the GPS coordinates of the cars if LTE was able to satisfy the safety have to charge a premium for any LTE behind me and sends them a notification application’s technical requirements, it data plan to pay back its multibillion dol- to slow down, the road is slippery ahead. doesn’t necessarily follow that you would lar investment. Verizon spent $9 billion Or if several vehicles hit their brakes be- want to do that on a commercial system, for the rights to spectrum in the 700 MHz cause of fog, the aggregator could inform it would have to be optimized,” he said. band on which it is building its LTE net- cars coming up over a hill that there is a “It also depends on how it is deployed and work. And lastly, as it was with OnStar’s slowdown ahead. There are vast resources who is going to take responsibility for the transition from an analog to a digital wire- in the cloud that could distill that infor- associated risks for such system.” less network, the transition to LTE will be mation and send it back out without the complicated. need for big [government] investments in Off-Board Voice Recognition In Mr. Shields’ view, “Open multime- infrastructure.” Nuance Communications, the global dia platforms such as Genivi and While LTE might well be applicable to leader in automotive voice recognition Continental’s Android-based AutoLinQ driver alert systems such as fog or slippery and text-to-speech software, is in the will have a much bigger impact on the road warnings, it will not be a replace- midst of transitioning its automotive busi- industry in the next four or five years than ment for car-to-car or car-to-infrastructure ness from relying exclusively on embed- LTE. ... Connected multimedia platforms systems based on DSRC (dedicated short ded computers for speech recognition to a and downloaded applications will replace range communications) systems. hybrid approach. In the new model, some telematics,” he said. Mr. Shields is chair- “With DSRC-based car-to-car commu- voice processing is still done in the ve- man of Ygomi LLC. nications, each vehicle sends out a signal, Continued on page 3 According to a product development and whoever can hear it picks it up,” ex- executive at a tier-one infotainment sys- plained Tom Schaffnit, advanced safety tem supplier, who wasn’t authorized to systems engineer at Honda R&D Ameri- © 2010 Paul Hansen Associates, 150 speak with The Hansen Report, carmakers cas. “There is no network processing of Pinehurst Rd., Portsmouth, NH 03801, are showing plenty of interest in LTE, but the signals. Even with its lower latency, an USA. Telephone: 603-431-5859. Fax: 603- not much can happen in the near term. LTE network can’t support safety. The ex- 431-5791. Email: [email protected]. “The first LTE modules and LTE base sta- ample I like to use is, you are entering an All rights reserved. Materials may not be tions to test them on won’t be available intersection and see a car you might get reproduced in any form without written until 2012 or so. At this point, we don’t into conflict with. You want to [automati- permission. even have pricing information. I expect cally] call that car to tell him to watch out the first modules will be very expensive for you. But what number do you call? The Hansen Report on Automotive Electron- and they will probably have some bugs,” The cellular network would have to keep ics is published 10 times a year, monthly; he said. track of where all the cars are and then July/August and December/January are Jeff Orr, principal analyst for mobile identify and call any vehicle in a conflict combined issues. The annual print subscrip- devices at ABI Research, which has been situation. Rather than a cellular network, tion rate is $787. Back issues are available following LTE developments since 2006, we need something that works more like a for $50 each. Index and multi-user electronic isn’t buying all the hype either: “Verizon’s sensor on an autonomous safety system.” subscription information is available at LTE network won’t soon be everywhere Dave McNamara, an automotive con- www.hansenreport.com. Paul Hansen Asso- [in the U.S.] that 3G is today, and 3G sultant and former top electrical engineer ciates is a strategy and market research firm networks are certainly not available ev- at Ford, agrees that LTE would be prob- consulting to the electronics industry. erywhere. As you go to different places, lematic in safety applications. “If you’re Publisher/Editor Paul Hansen whether it’s urban canyons in metropoli- hitting the event horizon of a traffic jam Managing Editor/ Brianne Wolfe tan markets or rural markets, the coverage over the hill and you need to brake, Circulation Manager wanes.” would you trust 4G or 3G for that? I don’t Director of Marketing Michelle Long think so.” ISSN 1040-1105

Page 2, October 2010 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com LTE... Continued from page 2 hicle, for instance audio selections or tele- ful embedded computer with less memory, ments to roll out 158 LTE networks, with phone functions, but the more computer since some content can reside off board. It an additional 89 networks potentially on intensive processing, such as interacting will be a huge step in our ability to pro- the way. In China two operators, China with Web-based content and services, is vide speech services,” he said. Mobile and China Telecom, are planning done on backend servers. Perhaps the most promising applica- LTE deployments. In Japan, NTT While Nuance is already doing some tion to benefit from off-board speech pro- DoCoMo launched a pre-commercial LTE off-board voice processing for OnStar and cessing will be the ability to create text network in June 2010, and KDDI plans to others using 2G and 3G wireless connec- messages while driving without risking launch in Q4 2012. In South Korea KTF tivity, LTE connectivity will reduce laten- your life using SMS (Short Message Ser- Corp. is to launch this year and LG cies as well as provide better overall vice) dictation. Nuance expects automo- Telecom will launch in 2011. In Germany coverage, according to Arnd Weil, general tive revenues to double over the next a Vodafone D2 deployment is underway, manager of Nuance Automotive. three to five years largely as a result of while T-Mobile expects to launch in “By taking advantage of connected hosting connected speech services. 2011. A number of other LTE rollouts in speech services, developers will be able to Western Europe are planned. In the U.S., do things that are too complex and de- Rest of World Metro PCS has had its LTE networks up manding to do on the embedded platform. According to www.4gamericas.org, op- and running since September 2010. ◆ And they will be able to use a less power- erators worldwide have made commit-

Semiconductors... Continued from page 1 enormous space savings compared to the through silicon via technology that age. SOI devices are more expensive than multichip modules, which have been used interconnects the die layers. regular CMOS devices, which has limited by the automotive industry for 20 years. their adoption by the auto industry, but The multichip modules I have seen are SOI their high-temperature performance about the size of a match box or a little bit In contrast with 3D ICs, silicon on in- makes them well suited to hybrid- and smaller. That same functionality in a 3D sulator is a mature technology from which electric-vehicle applications. They are package could fit in less space than a semiconductor devices can be produced used by Toyota in the Prius for motor con- penny, 100 times smaller.” that can withstand operating temperatures trol and in the braking system, as well as Among the challenges that will keep ranging as high as 300 degrees C. Utilizing in conventional models in throttle, sus- 3D devices from automotive applications this key SOI advantage will help extend pension and body control applications. for at least another four or five years is the operating temperature range of 3D Among Mr. Reiter’s clients is the Glo- their currently limited temperature range solutions. bal Semiconductor Association, where he and thus power limitations. Other chal- SOI devices are made by separating the serves as chairman of the 3D/TSV Work- lenges 3D chip developers are still ad- top, active layer of the chip from the bot- ing Group, driving development of design dressing include high-productivity design tom 99% with a layer of insulation, which tools and methodologies for 3D chips us- flows (from system level planning to de- reduces parasitic capacitance and leads to ing through silicon vias. He also works for sign transfer to manufacturing), perfecting significantly improved performance, lower the SOI Consortium. Contact Mr. Reiter the wafer thinning process and maturing active power consumption and less leak- by email at [email protected]. ◆ Feature Trends: Active Safety Penetration Continues Safety systems once reserved for high Volvo introduced radar-based adaptive Ford made adaptive cruise control with priced luxury cars eventually find their cruise control in 2006 on the S80. It has collision warning and brake support avail- way down to smaller and more affordable since refined the technology and intro- able on the 2010 Taurus, as well as on the cars, sometimes through government duced Pedestrian Detection with Full Lincoln MKS and MKT, reporting about a mandates, as was the case with electronic Auto Brake this year on the all new S60. 25% take rate for the option. With the stability control, and sometimes as the The S60’s collision/pedestrian avoidance introduction of the new 2011 Edge, Ex- way a carmaker differentiates its product. system is equipped with a dual mode radar plorer and Lincoln MKX, Ford says it has Volvo is a good example of this approach. sensor in the grille and a camera inside, doubled the availability of the feature. NHTSA (the U.S. National Highway behind the rear view mirror. If the system The brake support function gives the Traffic Safety Administration) now factors identifies a pedestrian in the vehicle’s driver a warning, followed by partial brak- in the presence of ESC, lane departure path and the driver takes no action, full ing and, when required, pre-charges the warning and forward collision warning in braking power is engaged to bring the ve- brakes for aggressive braking if the radar its new safety ratings tests. hicle to a complete stop, a first according Continued on page 8 to Volvo. The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com October 2010, Page 3 The Company Profile... Renesas Electronics

Thumbnail Sketch Renesas Electronics Sales Renesas Electronics Automotive in ¥ billions NEC Electronics acquired Renesas Sales by Region Technology Corp. on April 1, 2010; the FY 2006 to FY 2009 CAGR: -13.3% Total FY 2009 Sales: ¥222.3 billion merged company is Renesas Electronics 1,644.9 1,638.2 North America, 7.9% Headquarters: Nippon Bldg., 2-6-2, Ote- Europe, machi, Chiyoda-ku, Tokyo 100-0004 Japan 1,249.2 1,062.4 18.3% FY 2009 Sales*: ¥1,062.4 billion ($12.615 Japan, billion) 952.6 950.5 61.1% R&D: 18% in Q1 2010 702.7 591.4 Rest of Operating Loss*: ¥113.3 billion ($1.3 Asia, 12.7% billion) 692.3 687.7 546.5 471.0 Ownership: NEC, 34%; Hitachi, 31%; FY 2006 2007 2008 2009 Mitsubishi Electric, 25% 2006 to 2009 CAGR Renesas Electronics Automotive Products: Microcontrollers, system large Renesas Technology -14.3% Sales by Product Line scale integrated circuits, analog and power NEC Electronics -12.0% Total FY 2009 Sales: ¥222.3 billion devices Shareholders’ Equity: ¥388.0 billion Renesas Electronics Automotive Sales Analog and ($4.61 billion) as of June 30, 2010 Power, 19.9% FY 2006 to FY 2009 CAGR: -5.3% Market Capitalization: ¥465.09 billion Micro- ($5.52 billion) as of September 17, 2010 System controllers, FY 2010 Sales**: ¥1,190.0 billion ($14.1 on Chips, 69.5% billion) in ¥ billions 10.6% FY 2010 Operating Income**: ¥7 billion ($83.1 million) 261.9 290.5 232.1 222.3 275.0 Employees: 48,800 as of June 30, 2010 and president of Renesas Electronics FY 2009 Automotive Sales: ¥222.3 billion America, eliminating redundancies and ($2.64 billion) reducing overhead will naturally produce Key Automotive Products: FY 2006 2007 2008 2009 2010* improvements in efficiency: “The combi- Microcontrollers, system on chip solutions, *Renesas estimate nation of Renesas Technology and NEC and analog and power devices Electronics gives us an increase in overall *NEC Electronics and Renesas Technology combined meant it could no longer use the NEC mass and the ability to invest in strategic **Renesas estimates as of July 29, 2010 name. NEC Electronics therefore changed market segments. Another important ben- Note: FY 2009 ended March 31, 2010. its name to Renesas Electronics to lever- efit is it makes us a more strategic partner age the brand recognition Renesas has to our customers. Our customers abso- For more information on the history of NEC established over the past seven years. lutely want to minimize their vendor base, Electronics and Renesas Technology, please refer Renesas Technology and NEC Elec- and they want to do business with compa- to their most recent company profiles in The tronics were already the world’s two larg- nies who can provide a broader range of Hansen Report. NEC Electronics was profiled in solutions.” December 2006; Renesas in July 2004. est microcontroller suppliers before the merger, and MCUs accounted for 70% of While both NEC Electronics and Background Renesas Electronics’ 2009 automotive Renesas Technology were strong in The 2010 merger of Renesas Technol- sales. The company also produces system microcontrollers, the merger fills in some ogy with NEC Electronics created the on chip (SoC) solutions and a broad gaps in product coverage. “Renesas had a world’s third-largest semiconductor sup- range of analog and power devices. gap at the lower end; the 78K [from NEC plier, behind only Intel and Samsung The parent companies reached a de- Electronics] fits that perfectly. At the Electronics. On April 1, 2010, NEC Elec- finitive agreement on how to integrate other end Renesas Technology had a gap tronics acquired Renesas Technology, a their businesses in September 2009. between the 16-bit families and the 32-bit joint venture formed in 2003 when Among their primary goals was to pool RISC. The V850 [from NEC Electronics] Hitachi and Mitsubishi Electric combined development resources and effect econo- is a perfect fit there,” explained Mr. their semiconductor operations. As a re- mies of scale in many different areas of Mahoney. sult of the acquisition, NEC Corporation, operations in order to more effectively Following the merger, Renesas Elec- the parent of NEC Electronics, no longer compete in the global semiconductor mar- tronics conducted an analysis of all of its owned 50% of the surviving entity, which ket. According to Daniel Mahoney, CEO businesses, placing them in one of three

Page 4, October 2010 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com The Company Profile Continued

Automotive Semiconductor Suppliers Automotive MCU Suppliers Distinctions Claimed by by Worldwide Market Share, 2009 by Worldwide Market Share, 2009 Renesas Electronics

2009 Total: $14.4 billion Total Market: $3.6 billion ◆ World’s number-one MCU supplier Renesas ◆ World’s number-one 32-bit, 16-bit and 8-bit Others, 27% Renesas Electronics, 13% MCU supplier Electronics, ◆ World’s third-largest semiconductor Infineon, 9% 42% Others, supplier after Intel and Samsung 47% Freescale, 8% TI, 6% ◆ World’s number-one low-voltage power Infineon, 6% MOSFET supplier STM, 7% ◆ World’s number-one LCD driver supplier NXP, 6% Freescale, 19% ◆ World’s number-one supplier of MCU- Bosch, 5% Data: Gartner Toshiba, 5% embedded flash devices Data: Strategy Analytics those cuts will come in FY 2010 and will ◆ World’s number-two optical-coupler be completed by March 2013. Renesas supplier Renesas Electronics Market Share by expects to scale back the amount of devel- ◆ World’s number-one automotive semicon- Automotive MCU Application, 2009 opment engineering it outsources to two- ductor supplier thirds of its current volume. In addition, ◆ World’s number-one automotive MCU Worldwide Japan Renesas will increase its number of over- supplier Navigation* 78% 97% seas employees from 29% of the total in ◆ America’s number-two automotive MCU Car Audio 50% 91% FY 2010 to 32% by March of 2013. supplier with 21.7% market share Dashboard 33% 43% The new company’s organizational ◆ Renesas owns 78% of the global market Body 52% 60% structure includes four product business for MCUs used in navigation equipment, Airbag 40% 69% units: two SoC business units, an MCU including SoC devices. Powertrain 31% 92% business unit, and one that covers analog Braking/Steering 26% 63% and power devices. tually these technologies will be merged *Including SoC devices Renesas maintains 12 wafer fabrication into a future generation product. Data: Strategy Analytics and Renesas facilities, 10 of which are located in Japan. “Once development costs have been categories: expanding and growing; ongo- Including subsidiaries, it also operates 26 sunk, it isn’t very expensive to maintain ing core business; or shrinking business. assembly and test facilities; 18 of those are production of a device,” noted Mr. By concentrating management resources in Japan. Mahoney. “The real savings from the on businesses in the expanding and grow- Renesas’ major competitors in Japan merger will come from aligning develop- ing category, such as next generation are Fujitsu and Toshiba. ment roadmaps and eliminating redun- wireless solutions, SoCs for smart grid ap- dant product development activity.” plications, security, and electric and hy- Automotive Renesas Electronics expects the auto- brid vehicles, the company expects to Renesas Electronics already has a 42% motive semiconductor market to grow achieve an average annual growth rate of share of the automotive market for over the next five years at 8% per year, on 7% to 10%. MCUs, well ahead of the number-two average. Over the same period, the com- With its markets in Japan nearly satu- supplier, Freescale. Renesas produces pany expects to grow its own automotive rated, Renesas will have to grow foreign semiconductors that are used throughout sales at 10% per year, roughly. sales much more quickly in order to meet the vehicle in virtually every domain. All While some semiconductor suppliers its growth objectives. The company plans Renesas MCUs have embedded flash have run hot and cold in their dedication to grow sales to customers outside of Japan memory; MPUs (microprocessor units) to the auto industry, Renesas says it has from 44% of the total in FY 2009 to 60% have no embedded flash. Its SoCs typi- stayed committed to the industry for more in 2012. cally use no embedded flash but have a than 30 years. Why automotive? Yoichi Renesas anticipates that the merger’s high level of integration, usually much Yano, executive vice president and mem- synergies will yield savings of ¥40 billion higher than MCUs or MPUs. ber of the board of Renesas Electronics, ($475 million) from FY 2010 through FY Following the merger, Renesas Elec- responsible for technology development, 2012. Those savings will come mainly tronics will continue to manufacture all of was succinct. “The biggest reason is that from integrating development environ- the computing cores that either NEC we are strong in microcontrollers, and au- ments and technology platforms, from Electronics or Renesas Technology were tomotive is the single biggest microcon- combining material procurement volumes, making or had committed to offering, and troller market segment.” In FY 2009, and from sharing various facilities. will continue to do so for the next few automotive customers accounted for 21% Renesas Electronics will cut about years at least. These products include the of the company’s sales. 4,000 workers from its roster; most of V850, 78K, R8C and SuperH cores. Even- continued on following page

The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com October 2010, Page 5 Renesas Electronics

Having already captured a very large dent in charge of Renesas Electronics Top Ten Automotive Customers share of the Japanese automotive semi- America’s automotive business unit. conductor market, Renesas will focus Listed alphabetically market development efforts on its non- ◆ Integrated Device Manufacturer Top 5 Japanese automotive customers. Renesas (IDM) Aisin AW is presently the number-one supplier of All of Renesas’ automotive devices Continental automotive semiconductors worldwide come from in-house wafer fabs, which Denso with a 13% share of the market, but when means Renesas has better control of deliv- Hitachi Automotive you exclude its Japanese customers, ery than its fabless competitors. That ca- Pioneer Renesas ranks number five worldwide, pability proved beneficial as the auto Next 5 with an 8% share. Ahead of Renesas in industry recovered from the recession Bosch the non-Japanese automotive market are when semiconductors were in short sup- Delphi Infineon (11%), Freescale (10%), ply. “Because we have control of our fac- Fujitsu-Ten STMicro (9%) and NXP (8%). tories, we haven’t had to stand in line to Keihin request wafer allocations from outside Panasonic Automotive Competitive Strengths in Automotive foundries, like many of our competitors ◆ Experience have,” said Mr. Mahoney. Green Cars, Safety and Cockpit Renesas’ automotive business, which Electronics began solidly in Japan, owes much of its ◆ Product Breadth In order to participate in the fastest success to the experience it earned serving No automotive semiconductor supplier growing parts of the automotive electron- Japanese carmakers. “We got our start in offers a more complete line of microcon- ics industry, Renesas planners are focusing Japan serving Toyota, Nissan, Honda, ac- trollers and system LSI devices than on three application areas: vehicle electri- tually every Japanese carmaker. After that Renesas, from entry level to high end and fication, active and passive safety, and we went global,” said Shinichi Iwamoto, down to very low power. And while it of- what it calls “comfort,” especially cockpit senior vice president of Renesas Electron- fers some discrete power devices and some electronics including infotainment. ics’ microcontroller business unit. analog devices, it plans to broaden those offerings considerably. Renesas’ product Electrification ◆ Global roadmaps include plans for a total of more For several years Renesas has supplied The automotive business is organized than 300 new products. MCUs for hybrid vehicle applications in- globally. Each of the four regional auto- cluding running motors and generators, motive headquarters—in Japan, China, ◆ Quality engine controllers and battery manage- the U.S. and Europe—has its own sales, Renesas describes its attention to qual- ment systems, and it is eager to leverage marketing, engineering and quality con- ity as uncompromising. Indeed, as its fail- that experience as more carmakers and trol organizations that meet regularly with ure rates have declined, it has begun to tier ones become actively engaged in hy- their global counterparts to coordinate report some devices, some power transis- brid and electric vehicle development. activities. Regional automotive develop- tors for example, on a parts per billion “We want to be part of the electrification ment work is conducted in Japan, China, (PPB) basis. Even microcontroller failure wave,” said Mr. Yano. India, Vietnam, Malaysia, Singapore, the rates are way down: In 2009 Renesas “Two areas of experience that will be U.S. and Germany. shipped approximately 85 million V850 very helpful to green applications are our “We are in constant discussions to 32-bit MCUs with a total failure rate of motor control micros and low-power ver- make sure that we are not just taking one just 1.3 PPM. Fourteen million R8C 16- sions of our MCUs,” said Mr. Yano. Ac- region’s product roadmaps and sending bit MCUs shipped in 2009 with a total cording to Renesas, its low-power flash them out to other regions, and that our failure rate of just 0.2 PPM. “We strive to MCUs consume less than half the power development plans are based on the global continuously improve to zero defects,” its competitors’ devices require. Next- community,” noted Jim Trent, vice presi- said Mr. Trent. generation flash MCUs from Renesas made from 40 nanometer processes will Major Renesas Partnerships require just 0.5 mA/MHz of current. Renesas is already well established in Date Formed Partner Description hybrid and electric vehicle applications 9/2007 Vector Japan Joint development of Autosar-compliant software with its microcontrollers, and plans to go 9/2008 Geensys SAS Joint development of Autosar-compliant software after that market with its IGBTs, diodes 10/2009 KPIT Cummins Collaboration developing Autosar 3.0 compatible solution and other power devices as well. The 1/2010 Genivi Renesas became a member company’s roadmap includes a broader 7/2010 Nokia Joint development following Renesas’ acquisition of offering of automotive power MOSFETs, Nokia’s wireless modem business IGBTs and power ICs.

Page 6, October 2010 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com The Company Profile Continued

Automotive Products Facilities Automotive ICs Memory Automotive Development Centers Body: V850 SRAM Musashi, Japan Low-end body: 78K, R8C, K Series EEPROM Kitaitami, Japan Powertrain: SuperH, V850 ASICs, System in Package Tamagawa, Japan Chassis: V850, SuperH Gate arrays Takasaki, Japan Dashboard: V850, 78K, SuperH Cell-based ICs Munich, Germany Airbag: SuperH, V850 Analog masters Dusseldorf, Germany Car audio, connectivity: V850, SuperH Mixed signal ASICs Delhi, India Car navigation: R-Car Customizable MCUs Bangalore, India ADAS: IMAPCAR, SuperH, V850 SIP solutions Beijing, China Discretes These automotive MCUs are also supported: M16C, Shanghai, China R32C, H8, H8S, H8SX. Power MOSFETs Ho Chi Minh, Vietnam As required, automotive ICs include these interfaces: IGBTs Malaysia CAN, LIN, FlexRay, SPI, Ethernet and USB. Triacs Singapore Standard ICs RF and microwave devices Santa Clara, California, USA Power ICs Other transistors Dallas, Texas, USA Operational amplifiers/comparators Diodes Standard logic Optical devices USB Devices Manufacturing Facilities Assembly and Test Front End Safety Cockpit Electronics and Infotainment China China With more than one million lives lost Renesas is particularly enthusiastic Beijing (2) Beijing and more than 20 million people injured about the growth prospects for cockpit Suzhou Japan in motor vehicle accidents worldwide ev- systems, including dashboard instrumenta- Japan Kochi ery year, there is powerful motivation for tion, infotainment and connectivity. Aomori Kofu carmakers and suppliers to create new and “Multimedia is going to explode in the Fukui Kumamoto better safety systems, and to find ways to vehicle,” said Mr. Trent. “But this market Fukuoka Naka make those systems more and more afford- segment is not without challenges, for ex- Hakodate Saijo able. That work is unceasing. ample driver distraction is a serious issue, Kumamoto, Otsu Shiga Headquartered in Japan, Renesas Elec- and we intend to be part of that solution. Kumamoto, Nishiki Takasaki tronics has been well positioned to work We see a lot of potential for synergy in the Nagano Tsugaru with Toyota, Honda, Nissan and others on cockpit between navigation, connectivity, Oita Tsuruoka active safety innovations. IMAPCAR de- multimedia and the dashboard.” Tokyo Ube vices—image processors with advanced Renesas sees great potential for con- Ube U.S. parallel processing capabilities for auto- necting the vehicle to the Internet to take Yanai Roseville, CA motive safety systems, first introduced by advantage of cloud computing. “This is a Yonezawa NEC Electronics in 2006—were crucial to huge opportunity for Renesas; it perfectly Malaysia (2) the world’s first pre-crash safety system on fits our strengths in communications and Singapore the Lexus LS460. Renesas expects the connectivity,” said Mr. Mahoney, who be- market for active safety systems to grow lieves that cloud computing will not only apace, as advanced safety systems such as serve infotainment applications but also hardware and software platform that will driver monitors, front collision warning, safety. support future product developments in pedestrian detection, lane recognition and Navigation and infotainment systems, three domains, all of which are becoming traffic sign recognition trickle down from which in their most basic form combine increasingly interconnected: R-Mobile, high-end vehicles to mid-priced vehicles. head unit navigation with audio, got their for mobile devices; R-Home, for set-top “While active safety is becoming more start in Japan where Renesas’ MCUs and boxes, Blu-ray disc players and digital TV; and more important as radar and vision SoCs presently own 97% of the naviga- and finally, R-Car. In R-Car, Renesas will systems proliferate, passive safety—airbags tion market (78% worldwide) and 91% of develop SoCs targeted at three categories and restraint systems—are certainly not the car audio market (50% worldwide). of navigation systems: entry-level, mid- going away,” noted Mr. Trent. “If addi- This past September, Renesas intro- range and high-end systems. Among the tional airbags are integrated in a vehicle duced a new business strategy for its sys- R-Car developments Renesas will under- model, they stay there.” Renesas has al- tem on chip business that will leverage its take are gesture recognition technology ready won a 40% share of the airbag strength in multimedia applications. The and connectivity features. ◆ MCU market. company is developing an integrated SoC The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com October 2010, Page 7 Major OEMs’ and Suppliers’ Ten-Year Growth and Decline Just three years ago, Siemens VDO was Major Suppliers 1999 Sales (USD) 2009 Sales (USD) CAGR (%) the industry’s fastest growing supplier and Hyundai Mobis 1.4 billion 9.2 billion 20.7 global vehicle production was barreling Continental Automotive 3.4 billion 16.0 billion 16.8 toward 73 million units. Of course, the Aisin Seiki (FY ending 3/00 and 3/10) 11.8 billion 24.1 billion 7.5 global economic turbulence that began Denso (FY ending 3/00 and 3/10) 22.3 billion 35.2 billion 4.7 early in 2008 took a toll on all carmakers Yazaki Group1 9.5 billion 13.8 billion 3.8 and the suppliers who serve them. A snap- Autoliv 3.8 billion 5.1 billion 3.0 shot of the carmakers’ and suppliers’ sales JCI Automotive (FY ends September) 12.1 billion 16.0 billion 2.8 growth or decline over the past decade Bosch Automotive 25.2 billion 29.0. billion 1.4 illustrates which companies have profited TRW 11.3 billion 11.6 billion 0.3 the most from Detroit’s waning influence Valeo 10.2 billion 9.9 billion -0.3 and how successfully or unsuccessfully the Lear 12.4 billion 9.7 billion -2.4 major players have handled the industry Visteon 19.4 billion 6.7 billion -10.1 upheaval. Delphi 29.2 billion 10 billion2 -10.2 Between 1999 and 2009 GM and Ford Note: All conversions are to 2010 dollars. each lost more than 4% of their market 1 FY ending 6/00 and 6/10; approximately 85% of sales is automotive share and their production volumes de- 2 Hansen Report estimate creased in the range of 3% per year. Sales Carmakers by Region unit production > 1,000,000 in 2009, plus Chrysler of their major suppliers, Delphi and 1999 1999 Market 2009 2009 Market CAGR of Visteon respectively, shrank at approxi- Production Share % Production Share % Production mately 10% per year during the period. Asia 1999-2009 (%) Toyota, despite its recent recall prob- Chana Automobile 171,000 0.3 1,425,777 2.4 23.6 lems, increased vehicle production at Hyundai-Kia 2,103,000 3.8 4,645,776 7.7 8.3 close to 3% per year and its suppliers Suzuki 1,524,000 2.7 2,387,537 3.9 4.6 Aisin Seiki and Denso benefited. Toyota Toyota 5,462,000 9.8 7,234,439 12.0 2.9 has ownership in both companies. Honda 2,425,000 4.3 3,012,637 5.0 2.2 Hyundai-Kia, the world’s most profit- Nissan 2,455,000 4.4 2,744,562 4.5 1.1 Total 14,140,000 25.2 21,450,728 35.5 4.3 able major carmaker, had a 7.7% global United States market share at the end of 2009 and 10% General Motors 8,421,000 15.0 6,459,053 10.7 -2.6 of the booming Chinese vehicle market. Ford 6,638,000 11.9 4,685,394 7.7 -3.4 Hyundai Mobis grew along with the Chrysler 2,963,483 5.3 953,694 1.6 -10.7 carmaker, and through acquisitions. Total 18,022,483 32.2 12,098,141 20.0 -3.9 In Europe, Continental’s robust growth Europe is primarily a result of acquisitions. During Volkswagen 4,784,000 8.5 6,067,208 10.0 2.4 the last ten years, Continental purchased PSA 2,515,000 4.5 3,042,311 5.0 1.9 the automotive electronics businesses BMW 1,147,000 2.0 1,258,417 2.1 0.9 Renault 2,347,000 4.2 2,296,009 3.8 -0.2 spun off by Mercedes (Temic) and Fiat 2,631,000 4.7 2,460,222 4.1 -0.7 Motorola, and it acquired the much larger Daimler 1,865,000 3.3 1,447,953 2.4 -2.5 Siemens VDO, which at the time of the Total 15,289,000 27.3 16,572,120 27.4 0.8 acquisition in 2007 had sales of more than Others 8,557,517 15.3 10,378,170 17.2 2 10 billion euros. Continental was taken Total Global Production 56,009,000 100.0 60,499,159 100.0 0.8 over by Schaeffler KG in 2008. ◆ Data: OICA and OEMs

Features... Continued from page 3 senses a possible collision. Ford’s low- 2004, was brought to the 2010 Prius as an protection to the next level with Active speed “City Safety” system, which auto- option on the V model. Blind Spot Assist. If the car moves too matically brakes the car in traffic at speeds Blind spot warning systems have close to the adjacent lane after the system under 20 mph, is now available on the gained popularity over the past several issues visible and audible warnings of a new Ford Focus, along with a Lane Keep- years. In J.D. Power and Associates’ 2010 vehicle in the blind spot, the wheels on ing Assist system that nudges the steering U.S. Automotive Emerging Technologies the opposite side of car automatically wheel if the car starts to drift out of its Study, blind spot detection scored the brake. The resulting yaw movement cor- lane. highest level of consumer interest, 77%, rects the car’s path and minimizes the pos- Toyota’s version of adaptive cruise before the price was revealed. But the sibility of a collision. ◆ control, first introduced on the Lexus in 2011 Mercedes CL class takes blind spot

Page 8, October 2010 The Hansen Report on Automotive Electronics, Portsmouth, NH USA www.hansenreport.com