Apple (s aapl), with the introduction of the iPhone, upended the world of user experience with the device’s multitouch technologies. To be sure, Apple’s iPhone wasn’t the first to use touch technologies, but it put them to such good use that it’s since become de riguer to use touch in cellphones and other connected devices.
I’ve been fascinated by the touch revolution and have often wondered who will win from this big shift. The answer came to me this morning via Ashok Kumar, an analyst with Northeast Securities. In a research note, titled Cypress Semiconductor in Pole Position for the Next-Generation Touchscreens, Kumar writes:
Our checks indicate that Cypress has captured bulk of the new design wins for multi touch capacitive smart phones. The differentiating attributes include higher level of functionality, attractive cost, lower power consumption and a tightly integrated software stack. Based on current design activity, we expect Cypress to displace Synaptics and become the dominant supplier of touch screen chip solutions in 2010.
I was especially intrigued because Cypress (s cy) is among the chip companies I’ve barely thought about since I stopped actively covering the space some seven years ago. So before heading out to Le Web here in Paris, I called Kumar to learn more.
He explained to me that Cypress had just introduced a new class of chips called Trutouch, which are going to help accelerate the shift from the module-based design approach to touchscreens made popular by Synaptics to a more chip-centric design approach. What differentiates Cypress is the software, which has allowed the company to sign up pretty much all the major cell phone makers as potential customers. The software inside Cypress’ chips makes the touchscreens more sensitive and provides more tactile feedback, and would turn most phones into good touch devices with higher functionality. For instance, Samsung is going to use these chips in its Omnia line-up of phones, while LG is looking to incorporate them in its Arena and Chocolate phones. Nokia (s NOK) is another likely customer, perhaps by the summer of 2010. Even Palm (s palm) and RIM (s rimm) are using Cypress’s products. As Kumar’s wrote in his note:
Samsung and LG are expected to shift their high end smart phone touch screen chip designs to Cypress based solutions. We also expect Cypress to increase its footprint at Nokia and Motorola at the expense of Synaptics and Atmel respectively.
That would leave Apple as a holdout. But since Apple uses Broadcom (s bcrm) chips that run its own proprietary software (which remains unmatched), Cypress doesn’t have much of a chance with the Counts of Cupertino. Bottom line: Touch might revive Cypress’ fortunes, but in the end the big winners are going to be consumers, who will get phones with higher touch capabilities. Of course, I’m already wondering what Apple will do next in order to stay miles ahead of its competitors and further the touch paradigm.
Image of LG Chocolate courtesy of Verizon
Cypress’s really neat technology is the PSoC (and the main reason I expect them to do well): a microcontroller with programmable analog blocks. TrueTouch is based on the PSoC, as well as CapSense and EzColor (LED lighting). I think the newer PSoC 3 (8051) and especially PSoC 5 (ARM Cortex M3) will really give Cypress a boost, since many embedded developers know and love those architectures.
Tony
Thanks for this input. Makes perfect sense. I would love to know more about this and which directions can this PSoC be extended?
I think the PSoC 5 is very important, because it’s based on the very popular ARM core. When the PSoC 5 ships next year, I plan on getting a dev kit and seeing what it can do, but I’m not that interested in the other lines. Then again, I’m not designing consumer equipment where every penny matters.
Cypress’ software (PSoC Designer and PSoC Creator) looks interesting and is critical: they need a way to make using the programmable analog easy for digital guys. I haven’t used either one yet.
I find Cypress’ web site frustrating. On the web, two good approaches are to search for PSoc projects to get an idea of how people are using it (e.g. at Circuit Cellar which ran a PSoC contest in 2002: http://www.google.com/search?q=psoc+site%3Acircuitcellar.com&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a ) and searching electronics trade magazines for sales info and analysis (e.g. EE Times; here’s a recent article featuring TJ Rogers and an analyst: http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=220600179 )
I’m sure someone from Cypress would be willing to talk, too.
Synaptics is one of the few companies able to provide capacitive touch screens, which allow the user to zoom in and out as well as complete other actions using multiple fingers. That’s Synaptics’ addressable market that’s doubling this year and will likely double into next year. Synaptics will likely be one of the only semiconductor companies posting revenue growth in 2009. Synaptics’ technology is used in phones such as Research in Motion Ltd.’s BlackBerry Storm, Google Inc.’s G1 and LG Electronics Inc.’s Arena, which was recently released in Europe. Synaptics captured virtually every design win outside the iPhone in 2008. It has proven itself to be one of the few companies that can design and deliver products that work for mass market products
Sounds like someone owns some Synaptics stock…
I don’t have a horse in this race. For a more balanced view on Atmel, Synaptics, Cypress, and Microhip touchscreen controller market outlooks, check out this EETimes article:
http://www.eetimes.com/news/semi/showArticle.jhtml;?articleID=222001330
All a chip company like CY can do is make a chip based solution. The guy who wrote your article clearly doesn’t understand the biz because he goes on to explain how chip bases solutions are going to replace module based solutions. Yeah? Well what about the screen? What about all the sensitive receptors in the screen? All those things are required to make a touchscreen work. It’s called a MODULE. You can’t have just a chip telling the processor what to do. You need the entire solution, ie, a module along with the chip. But if you buy a CY chip, then you also need a third party to then make the screen and everything involved with that. Then what? You then need someone to engineer it all. They are getting multiple new design wins because these large manufactures find it easier to deal with one company who meets their exact standards and does it all, rather than having to go out to two and three different companies.
CY is being so heavily pumped up on such nonesense it’s unbelievable. The company loses money.
The problem with the interenet and blogs, is anyone can say anything. With stocks, there’s so much motive to try and pump or kill stock prices, you can’t take any of these bloggers seriously.