Freescale channels embedded

It takes a strong ego to climb aboard a large, well-established, well-liked company that's in distress and think you can turn it around. Ninety days into his tenure, Rich Beyer, the no-nonsense, straight shooting chairman and CEO of Freescale Semiconductor Inc., still thinks he has what it takes. Beyer used the recent Freescale Technology Forum to layout just how he plans to do it.

While it was no surprise to hear the new boss will continue to emphasize automotive, a sector in which Freescale has always done exceptionally well, he also took great pains to hammer home the centrality of embedded.

"Freescale, at its heart, is an embedded-processor company," Beyer said. "We serve those applications with additional functionality, such as analog, sensors, RF and software. That strength in processors is the essence of where our company is leading to," he added.

Underscoring that message, Freescale used the four-day conference to the QorIQ, a multicore processor designed to enable advanced network processing, or what Freescale marketers call "the Net Effect."

The prospect for innovation
"The processor's flagship device will have eight cores, although it will take some time to develop the tools to support that level of functionality," said Lisa Su, chief technology officer, Freescale.

Beyer and his team of executives and technologists spoke in the forum as one on how the company's strengths and customer relationships will form the paths to a turnaround. Along with embedded, automotive will continue to be an essential element, especially as hybrid vehicles raise the electronics bill of materials. Cited as crucial to Freescale's future are also wireless, analog and sensors, combined with a new emphasis on the fast-turnaround consumer market in general and the "green," health and network-processing areas in particular.

Learning from experience
While the new QorIQ processor signifies the top-end of the embedded spectrum, the company is no less passionate about the lower-end, microcontroller segment. "We have a God-given right to be a leader in microcontrollers," said Henri Richard, senior VP and chief sales and marketing officer, referring to Freescale's long history in the space. Richard noted, however, that through error, the company eventually ceded ground in the 8bit arena and made some poor distribution-channel decisions.

In an interview during the opening day of the forum, Beyer had no illusions about the task ahead of him. "Clearly, we have had a series of challenges over the past several years and have shared the pain with former parent Motorola," he said.

But the new boss believed that his experience as CEO of Intersil Corp. and Elantec Semiconductor leaves him well equipped for the road ahead. When asked about his knowledge about the market and the product families, he affirmed he has dealt with these issues before so they will come handy. He described Freescale as in good, if not great, shape, adding, "This is a company that I want to be successful."

What must be done
Three months on the job have led Beyer to conclude that Freescale to be successful, it must focus on its strengths and change its business practices and models in some areas right down to its roots.

"We do not have deeply in our gene pool the DNA for consumer products," he said. "We need to invest in markets that will see return in 18 to 24 months, but we also need to invest with more stable returns," he added. The marriage of the company's i.MX processing platform with the recently acquired SigmaTel Inc.'s low-cost analog/mixed-signal expertise is a move in that direction.

While SigmaTel hit it big with its iPod design win, Beyer is not betting the bank on a repeat. "We're not depending on hits, since you need an awful number of strikeouts to get those home runs," he said. "But we're in enough applications that we'll have many singles," he added.

Besides directing his business team to come with a three-level product-development plan that calls for near-, mid- and long-term revenue returns, Beyer is also looking to improve on customer execution, in part by not overcommitting the projects. "We try to do way too many things: It leads to failure," he said.

The combination of a push deeper into embedded and a strong integration story puts the company right up against Texas Instruments Inc. (TI). "TI has recently started to talk about itself in the context of embedded processors, but they're not really an embedded-processor company," said Beyer. "That's never been a central market for TI," he added.

What others think
TI begs to differ. When asked about Beyer's comment, Mark Dennison, VP, strategic marketing, TI, argued that the company has been shipping processors into embedded applications such as base stations, voiP equipment and software-defined radio. TI also has a strong microcontroller line, signified by the MSP430.

"We've shipped a few billion ARM cores, and in February we launched the 3500 series," Dennison said. "I'm a little confused as to where Freescale is coming from," he added.

Jeff Bier, president of research and analysis firm BDTI, agreed. "To say TI is not embedded is ridiculous," he said. To Will Strauss, president of Forward Concepts, it's all semantics, given the wide range of "embedded processor" definitions. "Put a Pentium in anything besides a PC, and it's embedded," he stressed.

Dennison also commented on Freescale's claimed integration and analog advantage, pointing to TI's power management, amplifier RF and converter lineup. "We can integrate all those technologies," he said, "whether it is on stacked dice, multichip modules or package-on-package."

- Patrick Mannion
EE Times