Adapting and Anticipating the Future

I’m very proud to be part of a truly great, world-class team taking S3 Semiconductors into its next chapter. Over the years, S3 Group has continually adapted its business to industry dynamics, going from a pure-play design services business to a much broader blend of products and services across a broad range of industries from TV and multimedia to industrial, mobile and healthcare.

However, this next step in our semiconductor journey is a particularly exciting one: taking everything we know and excel in, and bringing that together to create a new breed of semiconductor company. We are transforming ourselves into a highly-specialized chip vendor, that not only has exceptionally talented analog and digital chip designers, but the logistics expertise and partners to offer a quality of service that more than matches the biggest and best in today’s semiconductor industry. We intend to build on our highly successful engagements over the past few years with OEM’s in areas as diverse as industrial automation and communications, delivering uniquely optimized and customized products to OEMs and ODMs.

The semiconductor industry is profoundly changing

We can all see that the semiconductor industry continues to consolidate dramatically creating a handful of large companies that need to serve very high-volume markets in order to scale.

There are however many new and emerging markets that are not best served by the more standard hi-volume solutions. The real challenge therefore is how to create the next generation of innovative hardware platforms powering the smart and connected age, but without the benefit of a market size measured in hundreds of millions or even billions of units. Many of these products will not be driven by raw processing horsepower or amazing graphics, but by advanced mixed signal (analog combined with digital) circuitry which enables real-world interfacing, local processing and communications in a low power and highly secure manner. This is the core area where S3 Semiconductors operates.

Our customers are changing

As we work with our partners and customers around the world, we see a world changing like never before. Suddenly everything needs to be connected and smart. And everything needs to be cheaper and delivered faster in the face of ever-growing global competition, where distance is no longer any barrier to competitors. But how do businesses focused on the needs of their end customers suddenly add all these capabilities to their already stretched R&D capabilities?

Many of our customers are challenged to find all the engineering skills they need in addition to what they already have in-house to adapt their companies and products to these changing markets.  The skills they have assembled in-house have been built around their products more than the technologies used to build them. They continue to build their products – often at medium or low volumes – to ensure their customers get exactly what they want, however specialized and unique their applications might be.

However, now they face increased competition from much larger companies offering less optimized products, but using technologies such as custom chips to create products at much lower price points. They have always used off-the-shelf components to build their highly-specialized solutions – paying the inevitable price for using older technologies.

A semiconductor vendor – with a twist

We’ve always got the greatest satisfaction producing complete solutions for our customers. That’s why we feel that what we’re doing now is truly disruptive, but like so many of the best things, it is nothing more than a simple but powerful twist on a well-established business model.

Semiconductor companies today design, make and sell their own-designed chips. That’s what we do too. The twist is that the only chip designs we spend any time on are those for each customer. We don’t have any standard products. We don’t spend time thinking about how to specify a chip that can be used by hundreds or even thousands of different companies. We don’t spend any time or money trying to promote these chips to anyone else other than the customer who worked with us to specify them. And we don’t spend anything building an inventory of those devices, paying overheads for distributors, advertising and promotion, or anything else other than doing exactly what each customer needs.

Optimizing the system BOM

One of the most critical things we do that no semiconductor company we know of does: we optimize the BOM (Bill of Materials) of our customer’s entire electronics subsystem, not just the chip we design. By doing this, we’ve changed the fundamentals of how a semiconductor company engages with its customers.

Instead of us trying to convince as many people to buy the chips we’ve already designed, we sit down with our customer and go through their complete electronics design from RF to power supplies to connectors, and everything in between. We look at the total BOM cost, then apply our design knowledge to help them redesign the system to try to get as much of those components into a single chip – but only where it makes sense. That means we optimize not just the cost of the chip, but the overall cost of our customers’ entire electronics systems.

In some cases, our customers engage us up to a year in advance of any chip design work. They engage our system architects to work in their systems team. Our role is to identify silicon integration optimization opportunities at the highest level. This is where enormous value is created in downstream cost savings and product differentiation.

Because of our experience working in many different market areas, we can also explore with our customers’ new functions. These could include new functions such as additional interfaces that would enable them to communicate or sense in new ways, manage power better, or perhaps new software or services that could augment their core product. We don’t know any other semiconductor vendor who offers anything like this.

The electronics supply chain has advanced

We’ve seen how the tools and methodologies we use to design mixed signal as well as complex digital chips has been transformed over the past decade, enabling us to design chips faster and more reliably than ever before. However, the changes in the broader supply chain impact every aspect of designing and manufacturing semiconductors.

The “fabless semiconductor” business model transformed the chip business in the ‘90s and ‘00s and has resulted in the spectacular growth of a massive “chip foundry” industry, enabling any company to manufacture in exactly the same factories, to the same level of quality, as the biggest chip manufacturers like Qualcomm, Texas Instruments or NVidia.

In summary, we can get our chips manufactured and packaged in the best factories worldwide then tested and delivered to customers anywhere in the world, and manage the process in real-time 24/7.

S3 Semiconductors: a new breed of semiconductor company

We’re totally committed to growing our business of empowering our customers to utilize custom chips to enable them to optimize every aspect of their electronics subsystems. We’re especially focused on working with OEMs and ODMs with little or no chip design capability, but with a strong desire to adapt their products to the smart, connected age, while not losing focus on their core domain-specific strengths in the specialized markets they serve.

Together with our customers, we believe we can make a real difference to bringing the connected age to the myriad industrial and many enterprise and other niche markets. We’re going to see some exciting challenges for S3semi as we lead the industry in customized electronics, but one which we feel passionate we can deliver.

It’s been my privilege to lead the S3 Group since 2001. But this is perhaps the greatest opportunity I’ve ever seen for us to really make a difference, working with OEMs to realize exciting new products. I look forward to working with our customers old and new, both in new emerging markets and long-established traditional ones, to help them drive the next wave of disruption in the smart, connected industrial era.

2017-10-24T07:32:09+00:00 August 22nd, 2017|Blog|

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