for their end products. That help is now on the way. Industry veterans Paul Rosenfeld and Colin McCracken have started an organization to help people out of the woods when trying to select a small form-factor board, approach or processor. “We’ve seen customers make costly mistakes that they, in some cases, have had to live with for a long time,” says McCracken. “These could have been avoided,” he says. The newly formed company, Abacus, plans to help OEMs as well as board vendors to sort out the embedded board business. “There has been an explosion in the number and variety of formfactors,” continues McCracken, “from ultra mobility to conventional x86.” He says it’s not easy to sort out the right products particularly for OEMs that only have to make a decision every few years—and fortunately or not, have to live with that decision until the next cycle. Regulatory approvals from the military, FDA or other authority further complicate and delay the process. “There are so many more vendors,” says Rosenfeld, “with different chipsets and feature content, it’s not clear what the best alternatives might be.” McCracken and Rosenfeld have already been helping clients sort through the complex products out there. They can be reached at www.abacusipc.com.
Market Downturn
As this goes to press, the stock market—and perhaps the entire economy—is riding a turbulent cycle of ups and downs. A little earlier the NASDAQ (notable for its preponderance of hi-tech stocks) took a bath leaving the index 12% below where it began the year. And among the remaining publicly traded companies in the embedded-computer market there was not a lot of joy. Mercury Computer reported 2Q earnings and showed a $6.09 million loss on charges. The other players including RadiSys Corporation, Interphase and Performance Technology will be reporting earnings in February. Figure 1 is a chart of the relative stock performance of these companies for the past three months. As is evident, Mercury was able to hold its own until its earnings report and then it fell off a cliff. However, taken as a whole, the results are less than sterling. Not one of the companies closed out the three months higher than they began. Let’s hope 1) this is not indicative of the embeddedcomputer industry in general, and 2) that these companies will turn around quickly. As indicated last issue, many of the manufacturers of embedded computers remain bullish—however they are privately held companies and do not release their earnings publicly. As we noted, the fastest growing sector was in small form-factor products primarily in the control, medical, transportation and automation markets. Mercury is heavily skewed in the military and medical markets—though it does have specialty products in industrial automation and communications. RadiSys remains largely in the communications sector with its ATCA and AMC products, however it has a significant presence in some automation and control markets. Interphase and Performance remain largely in the communications market.
Roundup
Venture Capital investors sank close to $30 billion into U.S.-based companies last year, the most since 2001. A lot of the money went to “clean energy” and biotech firms. However, high-
SMA MRCY Daily
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Figure 1
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Realtime stock performance for the past 3 months.
tech electronic and computer start-ups still collected their share. STMicroelectronics saw a 93% profit fall based on restructuring and impairment charges. The Swiss chip maker also blamed the weak dollar. However, company executives expect to see growth of 4% to 6% this year. Motorola completed its sale of its Embedded Computer Group to Emerson Power Systems. That done, Motorola stumbled reporting an 84% decline in fourth-quarter net as its mobile phone division continued to struggle. It would appear that Nokia is picking up at least part of the slack, posting a 44% increase for its fourth quarter, outpacing all rivals in the mobile-phone business. Fujitsu is moving to split off its losing chip business. The company forecasts that its net will fall almost 40% through March—at least in part due to its semiconductor operations. Fujitsu apparently worked closely with Toshiba, which has been king of the hill as one of the world’s largest chip makers. It’s been aggressively expanding its semiconductor operations, signing deals last year to buy fab lines from Sony. Start-up Nextreme, Inc. is providing engineering samples of its heat removing technology, talking with virtually every major semiconductor manufacturer. Its microelectronic technology apparently integrates cooling into the copper pillar bumps on flip chips. For more information on Nextreme’s Thermal Copper Pillar Bump approach, visit its website at www.Nextreme.com.
Warren Andrews Associate Publisher February 2008
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