Synaptics CEO Targets AI on Edge Devices

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Synaptics CEO Michael Hurlston rescued the chip designer from the collapse of a billion-plus-dollar business when it lost Apple as a customer a few years ago. Now, Synaptics has assembled a new technology portfolio aimed at winning designs that add AI to edge IoT devices.

The company, founded 36 years ago by industry luminaries Carver Mead and Federico Faggin, has created much of the technology behind touchpads, fingerprint sensors and display controllers. Through acquisitions in recent years, Synaptics is developing new chips for growth markets like IoT in virtual reality and electric vehicles.

“One of the things we want to dig into is artificial intelligence at the edge of a network,” Hurlston told the EE Times. “We want to make decisions on the chip instead of going back to the data center and using a lot of compute and bandwidth.”

Synaptics is still taking advantage of the straightforward algorithms that would run on its chips.

“We need machine learning algorithms and models,” Hurlston said. “We are moving forward to solve that problem with this Emza acquisition.”

In October, the company bought Emza Visual Sense, an Israeli artificial intelligence developer. Synaptics is testing its first chip incorporating Emza’s AI.

“The application is present in front of a PC where the PC, to save power, will turn off if you walk away,” Hurlston said. “One of the big things people worry about is privacy. If someone is looking over your shoulder, they can sense that too and dim the screen and put it in privacy mode.”

Hurlston is still not satisfied with the results, saying, “We need to work on it.”

The AI ​​runs on Synaptics’ Katana chip, the first version of which was released almost two years ago. In addition to visual sensing, the Katana does audio, temperature, and environmental sensing.

Synaptics is counting on IoT, its core business, to continue driving sales. However, the expansion of the overall IoT chip business will slow due to strong growth in previous years, according to market research firm Gartner.

acquisition trace

Hurlston joined Synaptics as CEO in August 2019. Since then, the company has bought three other companies that fuel the company’s IoT and wireless connectivity business, including DisplayLink and DSP Group. DisplayLink technology allows displays to connect to any computer that supports USB or Wi-Fi. DSP Group adds voice processing and wireless technology to the mix. The third acquisition includes the assets and manufacturing rights associated with Broadcom’s former wireless IoT business. Hurlston previously headed Broadcom’s wireless division.

Synaptics is the backbone of most security systems, including those sold by ADT, he said. “Those acquisitions drove that.”

The IoT businesses acquired by Synaptics have had “astronomical” growth rates, Hurlston said, adding that the company’s internal IoT businesses grew at rates of up to 40% during the Covid pandemic. “You had a lot of growth drivers where people were bringing devices into the home, and we benefited from that.”

IoT security is a vulnerability that Synaptics aims to address with its edge AI push.

“One of the drives is to make more decisions local to the device itself by not transmitting information back and forth, for example, to a data center or anywhere else,” Hurlston said. “You are contained within that ecosystem, so the ability to hack is much less. Attacks are taking place as information is transmitted over the Internet or over the wireless link.”

When Synaptics devices transmit over Wi-Fi or Bluetooth, they use standard security protocols.

“We have the best security in the industry on our Wi-Fi chips, the most advanced security out there,” he said.

hit by apple

Before Hurlston joined Synaptics, the company had what he calls “a mammoth dependency on Apple” that generated about $1.6 billion in annual revenue. “Almost all of the revenue actually came from a single plug at Apple, which we knew would go away.”

Synaptics was supplying a display driver for Apple’s iPhones until the smartphone maker decided to switch from LCD to OLED as its display. In that transition, Synaptics lost the socket to OLED glass supplier Samsung, which also makes display controllers.

“Mobile in the semiconductor world from 2005 to probably 2015 was really the place to be,” Hurlston said. “Mobile was growing like crazy. Everyone wanted a smartphone. Probably in 2015, 2016, the world changed, and all of a sudden mobile wasn’t so cool.”

Synaptics has had to diversify its portfolio.

“Obviously we like Apple as a customer, maybe not on the mobile phone side, but on their PC and gadgets business,” he said. “We certainly continue to look for ways to engage those guys. We’d love to see if there are ways to get them involved on PCs or some of their IoT devices.”

Apple is by far the biggest spender in the semiconductor market, Hurlston said. Synaptics continues to count other big names like Amazon and Google among its customers for smart home products.

synaptic synergies

If you look at the platforms rather than just the technologies, you start to see some of the synergies at work at Synaptics, Hurlston said.

“We think a lot about platforms, and video conferencing is one. The PC entry point (docking stations or wireless monitors) is another platform where we can bundle multiple technologies together.”

Synaptics supplies docking station chips to Dell.

The company’s new concept is to make a wireless docking station that applies various Synaptics technologies. Synaptics envisions wireless monitors that would eliminate all physical connections except a power cord.

Video conferencing systems are another opportunity, Hurlston said, noting that his company has the necessary voice over Internet protocol (VoIP) technology, as well as technology to play video.

Automotive is a growing business for Synaptics.

“Here, we’re combining two of our historical technologies that are going to a totally different end market, and that’s touch technology and display controller technology,” Hurlston said. “We can go and apply that to these larger screens that come in the car, primarily for infotainment.”

Inventory correction

Synaptics expects to emerge from an industry-wide inventory correction during the second quarter of 2023. Despite the drop, the company predicted during its most recent earnings call that gross margin will remain around 61%.

The company is already seeing a recovery in the Chinese smartphone business. The PC business is expected to pick up next, followed by consumer electronics.

“We thought net-net, we started clicking all those deals in the second half of the next calendar year,” Hurlston said.

The industry downturn has caused Synaptics’ chip foundries to cut prices by as much as single-digit percentages in recent months.

As a result of its recent acquisitions, Synaptics has 10 foundry providers. Hurlston aims to reduce that number to two for more pricing power.

“Our predominant type of foundry is TSMC [Taiwan Semiconductor Manufacturing Co.]and they are the biggest supplier for us, but we work with GlobalFoundries, UMC [United Microelectronics Corp.]PowerChip, Silterra – the list goes on and on.”

Synaptics wouldn’t survive without TSMC, but UMC has also been a good partner, Hurlston said: “We have a lot of specialized processes. Our car requires a high voltage process and we have really been pleasantly surprised with UMC. They have done a good job with us in ultra high voltage. That would be a relationship that we would likely look to expand in the coming years.”

Synaptics mainly uses track nodes ranging from 28nm to 130nm.

“The chips we make like display controllers or touch circuits or even combined Wi-Fi and Bluetooth devices are very heavy analog,” he said. “With that, you don’t get economies of scale as you go through the process. Our analog circuitry is really complex, and below 7nm sometimes you just can’t get it to work.”

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