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With demand for electronic components increasing in rapidly growing IoT markets, enhance the product portfolio through the acquisition of antenna companies
Jacky Hsu 氏
There has been a sharp rise in data utilization and application at various companies. They collect various kinds of data with sensors, process it with AI (Artificial Intelligence) and other functions, and use the obtained results for their real business. For the success of these steps, a large volume of useful data must be gathered in the first place. To this end, markets for IoT (Internet of Things) devices, where sensors are connected to the Internet via wired/wireless transmission to collect various data, are rapidly growing around the world. By 2025, the number of IoT devices is expected to be over 75 billion if mobile equipment, household appliances, automobiles, and other similar devices are also counted.
Such growth markets normally attract the attention of many companies. One such follower is TE Connectivity, a manufacturer that provides a wide range of electronic components, such as sensors, connectors, relays, and antennas. TE Connectivity has started a full scale expansion of its product portfolio of electronic components for IoT devices. For this article, we interviewed Mr. Jacky Hsu, Senior Sales Manager of IoT Sales & Business Development Division at TE Connectivity’s Data and Devices (D&D) Business Unit, about various topics such as the future growth forecast for the IoT device market, the specifics of TE Connectivity’s product portfolio expansion, and IoT applications that are expected to grow in the future.
(Interviewer: Katsumi Yamashita, technical journalist)
Please tell us about the Data and Devices (D&D) Business Unit.
Figure 1: Sales of D&D Business Unit
TE Connectivity’s D&D Business Unit sales were USD1.6 billion in FY2023. As the entire market size is USD6.9 billion, the D&D Business Unit still has large room for growth.
Jacky The D&D Division mainly aims to provide various electronic components, such as sensors and connectors, which are used in data centers, cloud computing, communication base stations and other electronic equipment for data exchange processing. The sales revenue reached $1.6 billion in fiscal year 2023.
So why does data and equipment develop so quickly? The reason is that data is an integral part of our lives. At this very moment, numerous data under exchange processing is underway. It is not just infrastructure equipment such as data centers and communication base stations that are involved in data exchange processing. Smartphones, cars, household appliances, etc., can also be connected to the Internet, through which numerous data are subject to exchange processing. More and more devices will be connected to the Internet in the days to come. Undoubtedly, the commercial scale at a higher level is anticipated.
With conventional forecasts, the D&D Division predicts that the target market sales will reach $6.9 billion in fiscal year 2024. However, the sales revenue has only $1.6 billion in the preceding fiscal year. Thus, there is a vast space for development.
Does TE Connectivity have any business units that handle connectors and sensors separately? Moreover, what is the relationship between such product-specific business units and the D&D Business Unit?
Jacky Our business units are based on business areas. The D&D Business Unit covers data and devices, such as data centers and clouds while the Appliance Business Unit handles household appliances, and the Industrial Business Unit focuses on industrial equipment.
In such a business unit structure, who has the best products for the IoT market? The D&D Business Unit. That is why our unit came to handle products such as sensors and connectors for IoT devices.
Does the D&D Business Unit develop and design electronic components such as sensors and connectors for IoT devices?
Jacky All R&D works for products such as sensors and connectors are carried out within the D&D Division. It means the sole responsibility for product development and production. However, if the electronic components processed by the D&D Division will be used in other areas, such as industrial equipment, we may work with the Industrial Division to provide the tailor-made products, to be used for the Division.
Innovation by 800 engineers
Why do you think TE Connectivity products are chosen by client companies?
Jacky There are five reasons. Firstly, we are a company that can innovate. In the area of IoT devices, the speed of communication (data transfer) is increasing on a daily basis as various information and communication technologies advance. To make the entire communication system faster, electronic components such as sensors and connectors must also be able to cope with higher speeds. In other words, supporting high speed is a key point even for sensors or connectors for IoT equipment, and technological innovation is expected for them. Not many companies invest in such technological innovation. Client companies value us as a company that can innovate and choose our products.
Secondly, we deliver high performance. Having said that, it does not mean that all we should do is to just improve performance. Electric components such as sensors and connectors must perform stably even in a tough environment. Therefore, we prepare products that can achieve high performance even at high temperature and maintain communication speed even when miniaturized.
Thirdly, we provide quick and flexible service. We are a global manufacturer but we always offer quick and flexible service close to the client companies. Of course, we have such a service system in Japan.
Fourthly, we support end-to-end connection. We provide products and technologies related to communication/connection as a whole, not only for infrastructure equipment such as data centers and clouds but also for mobile equipment and household appliances that are located at the end points of communication systems.
Lastly, we are committed to realize a sustainable society. We do not just develop the electronic industry but also always consider environmental protection. For example, we make efforts to reduce plastic materials, waste, and CO2 (carbon dioxide) emissions. This activity is also appreciated by our clients.
How many engineers do you have to develop and design electronic components?
Jacky There are 800 engineers in the D&D Business Unit alone. The entire company employs more than 8,000 engineers. Out of all 92,000 employees, about 10% are engineers. With so many engineers, the company has managed to cope with the rapid technological advancement in this industry.
Can you explain the speed increase in the IoT area in more detail?
Figure 2: IoT market trend
Jacky In the IoT area, not only the speed of communication (data transfer) but also the number of connected devices (to the Internet) and traffic (the amount of data per unit time) are increasing substantially (Figure 2). This is an important point. The number of connected IoT devices were 36 billion in 2021 but will reach 75 billion in 2025. The growth rate is effectively 20% per year. Traffic was also 100,000 GB/sec in 2020 but reached 150,000 GB/sec in 2022.
What is clear from such market information is that the number of devices per user is increasing and that Wi-Fi and other radio communication technologies which were not needed very much 10 years ago are now essential. Various companies promote the use of big data and find their cost for data management is reducing at the same time. As a result, devices and traffic are increasing rapidly. Currently, we cannot live without data.
Does the approach to IoT differ by country or region?
Jacky IoT devices are introduced earlier in North America and Europe than in Japan and other Asia Pacific countries. Devices introduced earlier are naturally upgraded to the next version sooner. Consequently, the IoT market is driven by North America and Europe.
Looking at the market in terms of IoT applications, countries and regions have different focus areas. For example, the United States and China actively introduce IoT in renewable energy while South East Asian countries vigorously promote introduction of industrial IoT (IIoT).
Expand the portfolio through the acquisition of companies
What precisely are the electronic components for the IoT market that the D&D Business Unit provides?
Figure 3: List of electronic components provided by the D&D Business Unit
The D&D Business Unit provides a wide range of electronic components for radio communication modules and main boards (MCUs). Examples are connectors, antennas, spring fingers, and battery holders.
Jacky The D&D Business Unit delivers the products shown in Figure 3. In terms of electronic components, IoT devices need three elements: sensors, coupling parts including connectors, and controls.
TE Connectivity already provides a variety of sensors. As our company started out as a connector manufacturer, we also sell a wide range of connectors even now. For example, this includes fine-pitch connectors for cameras and modules, and connectors that can be used on both radio communication boards and control boards (main boards). However, coupling parts are not limited to the existing connectors for physical/mechanical connection. Antennas providing electric connection with radio signals are also considered as coupling parts. That is why we include them in the product lineup.
Can you explain the antenna product lineup more specifically?
Figure 4: Acquisition of two antenna companies
TE Connectivity acquired two companies (Laird Connectivity and Linx Technologies) to expand its antenna product portfolio. Laird Connectivity is a manufacturer specialized in external antennas, and Linx Technologies is a manufacturer of IoT embedded antennas for end devices.
Jacky We already had some antenna products but felt they were not enough to be successful in this industry. Therefore, we acquired two antenna companies to strengthen our product portfolio (Figure 4).
The first company is Laird Connectivity that we acquired in September 2021. This manufacturer is strong in external antennas mainly targeted for industrial IoT (IIoT). The second company is Linx Technologies that joined us in July 2022. Linx Technologies manufactures highly versatile antennas for embedding in the end devices of communication systems. Our range of antenna models increased from about 200 to about 1,000 after the two acquisitions. We can now propose more solutions to our clients.
Can you give us more details of the products of the acquired manufacturers?
Figure 5: Examples of Laird Connectivity products
Laird Connectivity deals in external antennas for public safety radio systems, land mobile radio systems, etc.
Jacky Laird Connectivity’s best-known products are “Phantom series” external antennas. They are very compact and highly versatile, targeted for public safety radio systems or land mobile radio systems (Figure 5), and also used on police cars.
The Phantom series have another feature. For example, antenna installation on police cars is generally quite difficult. However, this series offer guides and other accessories to make installation trouble-free.
What was the biggest reason for acquiring Laird Connectivity?
Jacky There were two reasons. Firstly, Laird Connectivity had a large product portfolio. Many competitors focus only on specific areas of external antennas. Secondly, their products had a high affinity for our existing products. Integration with our existing products was easy when building a total solution.
What are the characteristics of Linx Technologies’ products?
Figure 6: Examples of Linx Technologies products
Linx Technologies offers IoT embedded antennas for end devices, RF/coaxial connectors, cable accessories, etc.
Jacky As mentioned before, Linx Technologies’ products are intended to be embedded in end devices (Figure 6). Specific applications include electric vehicle (EV) chargers and smart meters.
Their product lineup is characterized by the inclusion of antennas supporting mobile phones (cellular), Wi-Fi, LPWAN, GNSS, and other radio communication standards as well as RF connectors and coaxial connectors. Another advantage of Linx Technologies is the ability of their highly-experienced engineers to introduce new products specific to IoT and to reflect the views of clients more quickly to the market.
After expanding the product portfolio through the acquisition of Laird Connectivity and Linx Technologies, what markets could be opened up?
Figure 7: Specific examples of new IoT markets to be tackled
Our expanded product portfolio of antennas has set the stage for the development of new IoT markets. Targets are IoT markets for smart cities, industrial IoT, telematics equipment, smart energy equipment, POS terminals, smart health equipment, etc.
Jacky With a newly expanded product portfolio, our targets will be markets such as smart cities, industrial IoT (IIoT), telematics equipment, smart energy, POS terminals, and smart health equipment. (Figure 7). A specific example is control systems for parking lots. Conventionally, parking lots did not need antennas. However, advancements in control systems have necessitated higher security and antennas as a result. The markets are growing in this way, and we expanded our product portfolio to respond to these trends.
As mentioned at the beginning, the D&D Business Unit used to focus on data centers and cloud computers, targeting very limited markets. However, we can now reach the markets shown in Figure 7, thanks to our expanded product portfolio. Of course, this list is not exhaustive. We hope to tackle wider markets.
High expectations for new applications originating in Japan
Embedding an antenna in electronic equipment is never easy. What technical support systems are in place?
Jacky Basically, we have a system where our team in Japan provides technical support. However, many of our Japanese clients tend to proceed by designing on their own. Looking at this situation, what is important is to simplify the design process and properly prepare supporting documents and specification sheets. That will lead to technical support. We hope to continuously strengthen our support.
What is the current situation of your business in Japan and your future targets?
Jacky We expect that the Japanese IoT market will continue to receive active investment and create new applications. Specifically, we are focusing on two applications: smart healthcare (health equipment) and robotics. It is likely that innovation will continue in Japan. We hope to allocate our resources to follow this trend.
Product list
The antenna products covered in this article are on sale at Chip One Stop!