Recently I have been trying to describe how semiconductor companies differ from all other companies. What is their core attribute? I have sometimes said it is their following Moore’s Law, but it is much deeper than that. So how can I explain it better?

Last week SiTime’s CEO, Rajesh Vashist, described it perfectly: “If cars were made by semi companies then Ferrari’s would cost $25.” And that is it, that is the whole thing.

First, it’s about performance; always striving for more performance. Second it’s about value; always striving for more value. It is not necessarily about price. In semiconductors we do lower costs, but it is much more than that. We make things better at the right price.

Would you buy a Ferrari for $25? No! If you wanted to go fast you might buy a McLaren F1 for $250. And what would Ferrari do? They would enhance their “low end” machines. Their new cars would be so good, so well appointed, so fast, so safe, and use so little fuel that you would surely prefer them to today’s F1’s.

That is the core belief we hold in the semiconductor industry, that everything must offer higher performance and better value, and we are continuously extending what we mean by performance and value, we are continuously moving the goalpost. This is the core of what SiTime is doing, and we are bringing this to the quartz timing industry.

Passive components include resistors, capacitors and resonators. They are called passive because they do not increase signal power. In contrast, active devices do increase signal power, and include amplifiers, digital logic and oscillators.

Passives used to dominate circuit design. A tube-based TV from 1965 might have had ten active tubes and a hundred passive resistors and capacitors. Now my smart phone has millions of active transistors but only a few hundred passives. (I’m counting the discrete passives here.) The ratio of active to passive components has increased a million fold.

Why does this matter in precision timing? Timing is divided into two parts: precision oscillators for high performance applications, and resonators for low cost applications. And MEMS oscillators have been replacing quartz oscillators in high performance applications, but not quartz crystals in low cost applications. So that is active replacing active.

But that is not the whole story. Silicon is moving down in cost faster than the quartz. MEMS oscillators will soon be lower cost than quartz crystals. And actually, we are seeing that some folks are already using MEMS oscillators where they had been using quartz crystals. Someday, and that is not tomorrow or next year but is soon enough, active MEMS oscillators will replace both active quartz oscillators and passive quartz crystals. MEMS oscillators will be used in both high performance and low cost applications.

And that is another example of how it looks when silicon replaces incumbent technologies.  Actives replace passives.

Following my discussion that SiTime is the fastest growing semiconductor company, I would like to discuss what precision analog and MEMS means to the semiconductor industry and why precision timing is now in the semiconductor sector.

In Deloitte’s Fast 500TM ranking of the fastest growing semiconductor companies in North America, MEMS companies are ranked as #1 and #2. SiTime is #1 and InvenSense is #2. These are not microprocessor companies, not memory companies, not RF companies, not general purpose linear companies, but rather companies that leverage precision analog and MEMS technologies.

Twenty years ago, MEMS was outside of the mainstream. Twenty years ago a colleague told me MEMS was destined to be a small side attraction in semiconductors, almost a curiosity. He said, “You are carrying a microprocessor on you, some memory, and analog circuits, but no MEMS components.” Well, now we rely on MEMS accelerometers, gyroscopes, pressure sensors, filters, oscillators, and more. Virtually none of our new cars would run without MEMS, and MEMS timing is ubiquitous. And indeed, I am carrying MEMS in my phone.

But MEMS is shorthand for MEMS and precision circuitry. The small mechanical elements need very precise analog circuitry to work. And it is this marriage that is dominating the new applications. At SiTime we think of ourselves as a precision analog company that is enabled by MEMS. Or sometimes as a MEMS company that relies on precision analog. Both views are equally right; it is this combination that is critical.

This combination is why the incumbent quartz companies can’t build MEMS oscillators on their own. Most of them don’t have MEMS, and most of them don’t have precision analog. None of them have both. Precision timing used to be about quartz, but now it is about silicon. And that is why precision timing is now part of the semiconductor industry. Combine that with the growing need for timing, and you can see why MEMS and precision analog are at the core of the fastest growing semiconductor companies.

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