The question is whether or not its competitors are worried amid an upturn in the 8-, 16- and 32-bit MCU markets. At least on the surface, Renesas’ rivals are not shaking in their boots, but they are keeping a close eye on the newly-formed upstart. Completing a merger transaction between Japan’s NEC Electronics Corp. and Renesas Technology Corp., the new combined entity--Renesas Electronics--commenced business operations on April 1.
Renesas (Tokyo), the world’s leading supplier of MCUs in terms of share, will continue to develop and support its various and incompatible MCU lines. But the company plans to put its weight--and R&D dollars--behind the previously-announced RX architecture.
Over the next year or so, the company will launch no less than 170 versions of its RX MCU line, a 32-bit, 90-nm family based on a complex instruction set computer (CISC) architecture. Last year, Renesas made a somewhat subdued launch of the RX, which is said to outperform competitive products from ARM, Atmel, Freescale, Microchip, MIPS, NXP, ST, TI, and others.
Still, the market is worried about the fallout between Renesas and NEC Electronics, at least according to competitors. At last count, the combined entity will sell and support no less than 16 separate MCU lines, including 4-, 8-, 16- and 32-bit products.
''Customers are concerned’’ whether or not the combined Renesas entity will support the legacy MCU lines, said Steve Sanghi, president and CEO of MCU rival Microchip Technology Inc. To cut support costs and simplify its portfolio, Sanghi contends that the Japanese company must ''eliminate some (MCU) architectures.’’
Neil Rice, technical marketing manager for the Microcontroller Business Unit at another rival, Atmel Corp., agreed. ''I can’t see how (Renesas) can support all of these architectures,’’ Rice said.
Dan Mahoney, president and CEO of Renesas' U.S. unit, Renesas Electronics America Inc., dismissed the notion that the company’s MCU customers are worried. “I don’t see that,’’ Mahoney said. ''I see that our competitors are creating FUD’’ (fear, uncertain and doubt) in the market.
In a recent interview, Mahoney also added that the new Renesas will continue to develop and support all MCU lines from the former Renesas and NEC Electronics entities.
Clearly, the R&D and investment are shifting towards the RX, said Ritesh Tyagi, director of MCU product marking at Renesas Electronics America. Regarding the other MCU lines from the company, ''as long as customers buy them, we will support them,’’ Tyagi added.
One analyst believes the new Renesas faces some major challenges on the MCU and other fronts. Besides MCUs, Renesas is also focusing on two other areas: analog/power devices and system LSIs.
''I literally asked a couple of MCU competitors about the renewed Renesas and they were unconcerned,’’ said Tom Starnes, an analyst with Objective-Analysis. ''They didn't like that there would be a new larger (vendor) to overcome for them to rise in the rankings tables, but they don't fear losing business.''
Clearly, Renesas' rivals don't want to pump up the Japanese firm. ''On the other hand, what would you think competitors would say: 'Damn, that new Renesas is going to cream us or we've had a tiger team working on a defense for six months,' '' the analyst said.
There are other issues beyond MPUs. ''I have previously given a position that the (new) Renesas will have difficulty working with the maze of similar and overlapping products, organization, and resources,’’ Starnes said. ''I don't know that the current Renesas hasn't shown the sort of pruning that other chip vendors have gone through.’’
Going forward, the new Renesas will be a publically traded company in Japan. When combined, the company had $10.212 billion in sales in 2009, making it the world's third largest chip maker, next to Intel Corp. and Samsung Electronics Co. Ltd.
In 2009, Renesas was the largest MCU player with 18 percent share, followed by NEC Electronics with 12 percent, according to Gartner Inc. This in turn gives the combined entity a staggering 30 percent share. In the MCU market last year, Freescale was third with 10 percent share, followed in order by Samsung (8 percent), Microchip (6 percent), TI (6 percent), Infineon (6 percent), ST (6 percent), Fujitsu (5 percent) and NXP (4 percent), according to the rankings from Gartner Inc.
Needless to say, the overall IC market, including MCUs, was horrible in 2009 due to the recession. Now, the MCU market is back on track and growing, thanks to some new and emerging markets, such as medical, smart grids and others, said Atmel’s Rice.
In 2010, the microcontroller market is expected to reach $12.3 billion, up 14 percent from 2009, according to Databeans Inc. The MCU market fell 21 percent in 2009, according to the firm.
At present, MCU demand is strong ''across the board,’’ said Microchip’s Sanghi. ''All lead times (for MCUs) are long.’’ For example, Microchip’s lead times have extended from 4-6 weeks to 8-12 weeks, said Doug Freedman, an analyst with Broadpoint.AmTech.
Over time, Freedman expects a sea of change in the MCU landscape. ''In the MCU space, I do believe there is more share shift than other markets as the landscape has changed. (There is) the new Renesas. We also have a refocused Freescale, and newcomers like Cypress,’’ Freedman said.
The question is whether the new Renesas will gain or lose share going forward. In MCUs, Renesas currently sells 16 MCU lines, including the M16C (16-bit), H8S (16-bit), R32C (32-bit), H8SX (32-bit) and the SuperH, a 32-bit RISC line. NEC Electronics sells the V850 and other MPU line. The V850 is a 32-bit line.
Over time, Renesas said it will ''rationalize’’ its MCU lines. But for now, ''nothing is going to be suddenly stopped,’’ said Renesas’ Mahoney. ''You can’t do this to MCU customers.’’
While Renesas will continue to push those products, it is throwing its weight behind its new architecture, the RX. Unlike many of its rivals, Renesas did not take the ARM route for the RX. The new architecture is a proprietary 32-bit, CISC-based MCU line.
It’s a big gamble. Renesas could see better margins with the RX--provided the product line takes off. Many companies have licensed ARM’s architecture and are competing with similar products. “I am not saying that ARM is good or bad, but we decided not to go that route,’’ said Tyagi. ''The RX supports most applications.’’
Renesas has been working on the RX for years. Last year, it rolled out the first RX products. The first devices, dubbed the RX610, is built around a new CISC-based, 32-bit CPU core, said to deliver performance of approximately 1.65 MIPS per MHz at its maximum operating frequency of 100-MHz. The basic structure of the CPU core is a five-stage pipeline and a Harvard architecture.
In March, Renesas released its second-generation products in its RX family. The new RX62N and RX621 lines comprise a total of 16 models and 31 individual products.
The two products are geared for communication functions. They include an Ethernet controller, USB 2.0 and CAN. Applications include building management, industrial equipment, factory automation systems, office equipment and others.
The RX62N line integrates three key on-chip functions: Ethernet controller, USB 2.0 and CAN (selectable as an option). The RX621 line provides USB 2.0 and CAN. The two groups are pin-compatible, allowing customers to choose the group that best matches their products and to reuse existing development resources.
The RX62N and RX621 line have maximum 512 kilobytes of flash memory. Renesas’ metal oxide nitride oxide silicon (MONOS) structure within the MPUs are used to achieve approximately twice the high speed operation of Renesas existing 32-bit CISC MCUs, enabling the maximum operating frequency of the CPU.
In addition, the lines have 32 kilobytes of data flash memory with a background operation (BGO) function that enables data to written at the same time a program is executing. This functionality allows data writes without slowing program execution, making it ideal for backup applications.
Also, in March, Renesas expand the line. It released twelve models (and 40 individual products) in the RX62T line, which is designed for motor control in consumer equipment such as home appliances. The chips include timer and analog functions on the same chip.
By year’s end, Renesas will roll out the RX63T, RX63N, RX631 and RX630, according to its roadmap. The RX63T is a new version of the MCU for motor control. The RX63N and RX631 are new versions for communications. And the RX630 is a general-purpose device.
In 2012, Renesas is expected to roll out 65-nm versions. ''Renesas will have some additional products and technologies under the umbrella and will be able to take advantage of those, but it will time some time to link them on block diagrams and later maybe blend them on-chip,'' said Starnes of Objective-Analysis. ''But other large vendors have numerous product lines too so it's hard to see Renesas as completely unique.''
Still, there is a lot of work to be done at the new Renesas. The company must integrate the operations of NEC Electronics and the old Renesas.
That's no small task. And many of the tough decisions have yet to be made. It has not been decided which fabs and leading-edge processes to keep. There also could be product overlaps and workforce redundancies. And profitability is a concern, as both NEC Electronics and Renesas lost money last year.
Renesas’ Mahoney believes the new and combined entity has the right formula, products and technologies. Thanks to the upturn and the right product mix, Renesas ''will growth faster than the market average,'' he said. In fact, business is strong, as the company's fabs are ''running at full utilization.''
