New-Tech Europe Magazine | July 2017

the consumption of RF products. They shape the RF market and the RF supply chain. Because the trend in this volume market is gravitating toward ever more integrated, more repeatable solutions, the popular viewpoint has emerged that the market for RF products is becoming commoditized. With that viewpoint comes a parallel argument that RF application support is unnecessary for a true, fully integrated system- on-a-chip solution. Pick a catalog part, plug it in, and it works. Performance is a guarantee. Value, they might say, comes down to competitive price, fast delivery, and superior logistics and distribution. In this newworld of highly integrated, super-cost-sensitive solutions, a few, very large suppliers are fully dedicated to supporting those high volume applications. However, while these suppliers are offering fully integrated system-on-chip solutions, the prediction of a true plug-and-play commodity paradigm has yet to be fulfilled. In fact, these suppliers have entire teams of engineers embedded with their customers to help them integrate products, to understand and anticipate customers’ future trajectories, and to make sure that their own product development is meeting the demand of those customers a year or two in advance. So while there’s a perception that system-on-chip solutions are virtual commodity items, or they’re headed that way, those suppliers still extend heavy resources to maintain close collaboration with their customers at the engineering level. While most of the headlines in the RF & Microwave market are focused on these volume markets, there is still a substantial market for RF

product, or maybe a small product line in a few cases. They all had niche specialties. One person was the owner, the chief designer and the applications engineer, and products evolved through regular, direct communication with customers. These were very tight- knit relationships: customer-supplier teams, where customers worked closely with their preferred suppliers, and suppliers specialized to specific customers’ needs. “Commodity” wasn’t even in the vocabulary. We were inventors, creators, pioneers, even artists, creating innovative solutions to specific customer challenges. Fast forward fifty years. The markets for RF technology have ballooned. The number of applications has grown from just a few in the post- World-War-II period to the order of hundreds,andmaybeeventhousands today. In 1985, Martin Cooper and Motorola released the world’s first cell phone. That was an inflection point in the growth of the industry. Around that time, Mini-Circuits was supplying Motorola with 200 units a week for their cell phone; today the weekly volume for cellular handsets is well into the millions of units. The popularity of applications created through cellular, WiFi, eventually IoT and all the consumer RF devices and services those technologies enabled drove massive demand for volume and pressure on price. In that landscape, and in the transition leading up to it, the cottage industry of suppliers was no longer equal to the demand, so the industry had to evolve. Suppliers had to adapt to achieve performance, quality and competitive pricing at the scale these new markets demanded, and

most adapted through consolidation. The surge in demand brought about an evolution in quality standards in terms of sigma. Quality has always been and remains inseparable from the definition of value: customers expect performance that meets their system requirements with a high degree of repeatability between units, and the assurance that parts won’t fail through the operating life of the system they’re designed into. But as the industry has grown, suppliers have innovated design tools, processing techniques, ESD safeguards, measurement methods, and statistical approaches to achieve quality at an astounding level of precision. As a result the standards for product quality are higher now than they’ve ever been. At the birth of the industry, 1000 failures per million was considered exceptional, whereas today it’s not unusual to have a requirement for 10 failures per million or less. Finally, products have evolved from a diverse universe of single-function components to highly integrated, digital-type solutions aiming toward total plug-and-play compatibility, where one part is a form/fit/function drop-in replacement for another part. Where hardware is secondary to the software and firmware that wraps around it. Where, dare I say, the tight-knit, specialized customer- supplier team seems, on the surface, to have diminishing relevance. Does this new paradigm work? In some ways it seems hard to deny. Commoditization: New Paradigm or Misguided Perception? Today, giant companies like Apple, Samsung, and their peers dominate

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