Saturday, November 14, 2009

Freescale's Smart Meter on a Chip

Freescale Semiconductor has a new chipset that incorporates all the primary functions of a smart meter. Similar ‘systems-on-a-chip’ have seen mixed success to date.

Freescale Semiconductor has a proposition for smart meter makers – take its new "smart meter on a chip" as a template, and have smart meters rolling off the manufacturing line within months.

That's one promise of Freescale's new "system-on-a-chip" metering reference design announced Tuesday, which integrates many smart meter functions now performed by discrete components, as well as a few features hard to find in today's meters.

That's according to Jeff Bock, global marketing manager for Freescale's industrial microcontroller division. With pretty much every smart meter function integrated except for the choice of communications - wireless mesh, powerline carrier, cellular, etc. - the new system is "functionally a productized meter [with] all the software and hardware necessary for someone to go build a state of the art system," he said.

The chipset will sell for $3.60 to $4.22 apiece for orders of 10,000 or more, depending mainly on how much flash memory and SRAM the customer wants and whether they're meant for single-phase residential and small commercial meters or heavier three-phase industrial meters, the company said.

Smart meters represent a small but growing market for chipmakers like Freescale, Texas Instruments, NEC and Analog Devices as they look for growth amidst an economic downturn that's hurt sales in their traditional markets. Smart meters could be a $2 billion opportunity for semiconductor companies through 2012, according to a report from Gartner.

But for the most part, that business has been in sales of discrete products that meter makers integrate themselves. Which companies might be customers for an integrated meter-on-a-chip system?

Well, the big established North American and European meter makers – that's General Electric, Landis+Gyr, Itron, Sensus and Elster, for the most part – "may choose to use pieces, or in some cases, large portions of the design in their own designs," Bock said (see 8.3M Smart Meters and Counting in U.S.).

But in emerging markets like India, China and Latin America, "Their first intent may be to do as little to modify it as possible," he said. "They may even consider taking our design" and branding it as their own, he said.

That may be a clarion call to the developing world's more fragmented smart meter industry.

Bock notes that the new chipset is aimed at the medium to high-end meter manufacturer, with features including high-accuracy electricity measurement and a system to keep the meter running while new software is being uploaded.

But Freescale - formerly Motorola Semiconductor - also has incorporated some key features that, while useful for all smart meters, do sound as if they're targeted for problems mainly faced in emerging markets.

For example, the chipset includes an anti-tamper device and real-time clock to fend off attempts to hack into meters to steal electricity, as well as lower power usage in general to allow meters to run off batteries longer on a grid that sees a lot of brownouts and blackouts. Those are all problems that are far more common in markets like India and Latin America than in the United States and Europe.

Another key challenge facing such emerging markets is cost - that is, as low a cost as possible. Freescale has been targeting low-cost solutions for China's smart grid needs, for example (see Cutting the Cost of Smart Grid in China).

"The overwhelming trend is a drive for integration... and a drive for cost," Bock said. Freescale isn't the only one picking up on those trends, of course.

Teridian Semiconductor Corp., for example, makes chips to measure voltage, current, power factor and other features of electricity that are now found in smart meters from about 52 manufacturers, including big ones like General Electric, Landis+Gyr and Elster, said Jerry Fitch, Teridian's CEO and president.

Teridian also incorporates time of use, anti-tampering and display functions, as well as software, into complete systems, said Jerry Fitch, president and CEO. The Irvine, Calif.-based company sells its chips at prices ranging from about $1.25 to about $4, depending on the functionality demanded, Fitch said.

While North America and Europe have been and continue to be Teridian's biggest market, China and India "are becoming much bigger parts of our business than they've historically been," he said.

China could see 30 million to 40 million meters per year deployed under a new government smart grid push, and India is probably deploying about 10 million meters a year, about 3 million of which will contain Teridian chips, he said.

But so far, meter makers haven't taken to systems-on-a-chip as quickly as chip developers would have hoped. At least, that's the experience of Analog Devices, which launched just such an integrated system last year. While it supplies discrete components to at least one of the big five smart meter makers, as well as Siemens and several Chinese smart meter makers, it hasn't seen much uptake of those "SOC's," said Ronn Kliger, Analog Devices' product line director.

"Most of the world still does designs using discrete components," he said. "The reasons are, the flexibility it gives them, the uncertainty of future requirements, and frankly, the ability to get suppliers to compete with each other on price."

India has been an exception to that rule, Kliger said. In India, Texas Instruments has seen more widespread success for its system-on-a-chip that includes a microcontroller and analog-to-digital converter to read electricity and convert it to digital format, but doesn't include software for doing that.

That's cheaper than including the software, and in India, "it just so happens that they have a lot of software expertise" to fill the gap with homemade code, so to speak. That helps drive down cost in a market Kliger sees as "the most cost-sensitive" in the world.

Still, the course of the semiconductor business has favored integration, and smart meters are no exception, he said. It's all a matter of timing.

"There may very well be market niches where customers have kind of standardized on what they need, and are perfectly open to system on chip solutions," Kliger said. "That's just not in the mainstream" today.

Ben Schuman, an analyst with Pacific Crest Securities, agreed that "the industry isn't really standardized enough, or set on one type of architecture, so that those cost savings would outweigh what you'd give up in the way of flexibility."

And, of course, integration is the "bread and butter" of meter makers, a role they might not want to give up, he added.

Perhaps Freescale will break through with its chipset. While Bock wouldn't name which smart meter makers Freescale is working with, or what its market share in the industry might be, he said the company is already working with "significant large alpha customers here and around the world, many of those in the millions of units."

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