Six Hidden Costs in a 99 Cent Wireless SoC Considerations when choosing between a wireless module and a wireless SoC
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The document discusses the hidden costs associated with using a wireless system-on-a-chip (SoC) versus a wireless module, highlighting various factors such as RF engineering, certification costs, and the impact on time-to-market. It emphasizes that while SoCs are cheaper, their implementation can incur significant hidden costs, including the need for specialized expertise and additional regulatory approvals. Ultimately, the choice between modules and SoCs is complex and should consider volume, risk, and available resources.
Six Hidden Costs in a 99 Cent Wireless SoC Considerations when choosing between a wireless module and a wireless SoC
- 1. www.silabs.com | Smart. Connected. Energy-Friendly. Six Hidden Costs in a 99 Cent Wireless SoC Considerations when choosing between a wireless module and a wireless SoC
- 2. www.silabs.com | Six Hidden Costs in a Wireless SoC 1 Six Hidden Costs in a 99 Cent Wireless SoC What you don’t know about dropping a wireless SoC onto the board could delay your product. Table of Contents So You Want to Save Money by Using a Wireless SoC? ............................................................................2 Breakeven Analysis......................................................................................................................................3 Hidden Cost #1: RF Engineers and Design .................................................................................................4 Hidden Cost #2: Lab Equipment and Facilities ............................................................................................5 Hidden Cost #3: PCB Layout and Antenna Selection ..................................................................................6 Hidden Cost #4: Regulatory Approvals and Wireless Standard Certifications .............................................6 Hidden Cost #5: Reduced Product Revenue from TTM Delays...................................................................7 Hidden Cost #6: Supply Management and Assurance.................................................................................7 Moving from Wireless Modules to Wireless SoCs........................................................................................8 Single Source for Wireless Modules and Wireless SoCs.............................................................................8 Conclusion....................................................................................................................................................8 Appendix 1: Breakeven Calculations............................................................................................................9 Appendix 2: Costs of Designing a Wireless SoC onto a Product Board and Going to Production.............10 Appendix 3: Regulatory and Wireless Standards Certification Cost Estimates..........................................11
- 3. www.silabs.com | Six Hidden Costs in a Wireless SoC 2 Silicon Labs Announces Blue Gecko Bluetooth® Smart Module and SoC • Blue Gecko Bluetooth Smart BMG113 module pricing = $3.07 in 100,000 unit quantities • Blue Gecko Bluetooth Smart SoC pricing = $0.99 in 100,000 unit quantities So You Want to Save Money by Using a Wireless SoC? There are two main options: Option 1: Use a wireless system-on-a-chip (SoC) on the product printed circuit board (PCB). It’s small and cheaper than a wireless module. But designing with it may be costly. Option 2: Use a wireless module with Option 1’s SoC inside. A majority of the design is already done including a fully-characterized PCB with RF optimization and antenna layout, shielding, timing components (crystals), external bill of materials (BOM), regulatory approvals, and standards certifications. But they are generally more expensive and larger than the SoC. Example of a Wireless Module and a Wireless SoC Layouts So, what is the easiest and most cost effective option? That changes depending on the product, the designer, time to market, and so on. Further, the best option changes with volume.
- 4. www.silabs.com | Six Hidden Costs in a Wireless SoC 3 Breakeven Analysis Modules cost more than their SoC equivalent, but companies use them widely. Why? And what’s the breakeven volume for when to change from one option to the other? Cost Category (for a single product) Wireless Module Wireless SoC Board design effort (antenna, layout, match, PCB, debug) Low High Resource and lab equipment costs Low High Regulatory certifications costs Low High Standards certifications costs Low Med Time to Market risks Low High 100K pricing (in our intro / example above) $3.07 each $0.99 each High-level Cost Comparison of Wireless Module versus Wireless SoC Breakeven Assumptions 1. Flat $3.07 wireless module pricing between 10K-300K annual volumes; 2. Flat $0.99 wireless SoC pricing between 10K-300K annual volumes; 3. Flat $0.50 SoC bill of materials (BOM) pricing; - Module price includes the BOM. SoC does not. 4. Gross Margin = $5.12 or 40% above module price. Assume both SoC and module use this for the sales price; 5. SoC requires 3 months of extra development time due to more complexity in design, certification, and regulatory approvals. Given the above, the annual breakeven volume falls between 200K and 300K. Breakeven Example for using a Wireless Module versus Wireless SoC
- 5. www.silabs.com | Six Hidden Costs in a Wireless SoC 4 This breakeven figure may seem high, but it still may not justify using an SoC as seen with the super-high volume iPhone 6 which uses a Murata Wi-Fi module. iPhone 6 Teardown with Murata Wi-Fi Module Source - ifixit.com/Teardown/iPhone+6+Teardown/29213 So why is a breakeven on this so complicated? Because modules remove unknown risks of designing with a wireless SoC, and unknown risks are, by definition, hard to quantify in dollars or weeks. Hidden Cost #1: RF Engineers and Design An RF engineer is required for an SoC design. Or, at a minimum, access to RF engineering expertise from the SoC supplier. RF engineers can be expensive. The Glassdoor.com RF Engineer salary is $80-152K/year, unloaded, which does not account for overhead (office space, benefits, etc.). In the US, this typically adds about 33% on top of the salary. Hiring an RF Engineer = $80K-152K/year + 33% overhead = $100K-200K/year. RF Application Notes – Not Always as Easy as 1, 2, 3 SoC suppliers provide application notes (AN) like Silicon Labs AN930 to help RF layout. These include recommended antennas, traces, board recommendations, and matching networks to maximize performance while minimizing cost and footprint. However, since every design is different, the recommendations are always—always—hard to implement. In fact, industry experts will attest that it is very common for product designers to follow an application note’s recommendations “exactly” and still have performance issues compared to the datasheet specifications and/or product expectations.
- 6. www.silabs.com | Six Hidden Costs in a Wireless SoC 5 Module companies charge more for their products partly because they are already RF-optimized within a small footprint and low BOM. The whole “system” can be placed on the product board in a matter of hours if not minutes. Of course, it is “never always” easy. But in the base case, putting a module on the board is measurably easier than putting down an SoC. See the table below for some issues that affect RF performance. RF Layout Challenges and Effects Hidden Cost #2: Lab Equipment and Facilities RF engineering requires special equipment, software, and facilities to debug RF designs. Wireless Lab Equipment and Facilities RF Performance Factor Potential RF Impact Antenna type, supplier, and placement Antenna placement, type, material composition, manufacturer, and cost can change signal gain to the matching network resulting in mismatch and poor performance. Antenna trace shape and length Minor variations in length and shape can change the expected signal energy and therefore the recommended matching network. Board manufacturer Differing distances or insulation material between layers, PCB via materials, trace widths, screw holes, etc. can have effects. Component suppliers Different suppliers’ components can behave differently and result in different performance. This can result when designers use “the ones they have on the shelf” versus the recommended supplier, or save a few pennies with a cheaper alternative. Component types Different component technologies can affect received power and voltage (e.g., wire-wound capacitors vs. thin-film). Plastics and screw location Screw placement can have coupling effects for both radiated and received energy. Battery location Battery location and technology can affect signal power. A charging battery can also be an unknown player. Display location Like batteries, displays can create interference on the antenna. Lab Equipment Cost to Own Cost to Rent/Day Calibrated traceable gain horn antenna ~$2,500 Included in a single day rental at test facilities. This is generally $1,000-$3,000/day. Bi-conical antenna ~$2,000 3D positioner ~$2,000 Spectrum analyzer ~$6,000 Wireless testing software with desired modulation ~$1,500 RF isolated, anechoic room (5m x 5m) ~$20,000 Wireless standard emulator, sniffer, and debug ~$20,000
- 7. www.silabs.com | Six Hidden Costs in a Wireless SoC 6 Hidden Cost #3: PCB Layout and Antenna Selection How hard can it be? Many engineers believe it should be easy to follow an application note for layout. While that can be true in some cases, antenna application notes are often complex. AN930, the Silicon Labs Blue Gecko Bluetooth Smart (BLE) 2.4GHz antenna application layout guidelines, provides some good examples of the nuances involved. It is designed to provide detailed RF help so customers can get close to a “perfect” layout on their early tries. Image from AN930 on Blue Gecko Bluetooth Smart antenna matching But there is still a good chance the PCB will need tweaks to optimize antenna performance. These take time—a few days to determine what needs to be tweaked and a week to turn the board at a local PCB manufacturer. Two weeks adds up when a typical development can take 16 to 20 weeks. As mentioned before, wireless modules can generally be successfully placed on a product board with very simple guidelines. It is still necessary to test a design’s RF performance, but it will likely be much more unpredictable. Hidden Cost #4: Regulatory Approvals and Wireless Standard Certifications Products that operate in the unlicensed frequency bands require regulatory “type approvals.” Many also require a wireless standard certification (e.g., Bluetooth). Some wireless modules come pre-certified for type approval and wireless standards. Adding them to a product brings these approvals and certifications along, although the product designer must apply for membership in the standards bodies and conduct some product-level regulatory testing. Wireless SoCs do not carry product type approvals or pre-certifications.
- 8. www.silabs.com | Six Hidden Costs in a Wireless SoC 7 Regulatory and Certification Estimated Costs Regulatory testing costs and type approvals vary by country. Some countries will accept others’ approvals. For example, the United States FCC Part 15 approvals and paperwork are accepted by Canada without the need for further testing, but require separate application, approval, and certification mark. Every wireless standard requires certification and paid membership in the standards body. Each certification body is independent and will not accept others’ certifications. There are consulting companies for the approval and certification processes. They understand exactly what’s required, how to test, how to correctly complete reports, and when an approval or certification is required. Appendix 3 provides a list of certifying bodies, guidelines, estimated costs, and consulting companies. Hidden Cost #5: Reduced Product Revenue from TTM Delays One of the biggest hidden “costs” in using a wireless SoC versus a module is the risk of missing the market window due to incremental time to design it in, test it, debug it, type-approve it, and certify it. Every day the product is not on the market is a day of lost revenue. This can range from a few weeks to a few months. As we saw above with the iPhone 6, removing risk of time to market is a key reason why some very large volume companies still use modules even though they cost more. Hidden Cost #6: Supply Management and Assurance For companies with low-volume production runs, modules can mitigate supply risk. A module supplier bargains for SoC supply in their modules on behalf of its entire customer base. Therefore, they consolidate demand and insulate small companies from potential line-down if there is a shortage of SoCs. Sourcing a single module is also simpler than sourcing all the components to put an SoC on the board. Certifying Body Estimated Cost Module Pre-Certification Applies (Yes / No) Wireless SoC Certification Applies (Yes / No) FCC ~$7,900 Yes No IC (Canada) ~$7,900 Yes No ETSI / CE (Europe) ~$7,900 Yes; some limited testing/re-testing required No South Korea ~$4,500 Yes No Japan ~$8,600 Yes No Bluetooth® ~$8,000 Yes; Add’l membership fee required No; Add’l membership fee required ZigBee® ~$4,000 Yes; Add’l membership fee required No; Add’l membership fee required
- 9. www.silabs.com | Six Hidden Costs in a Wireless SoC 8 Moving from Wireless Modules to Wireless SoCs When a company using modules decides to move to wireless SoCs, the question becomes how to reuse the software they have developed with the module. Module companies generally provide a unique software application programming interface (API) for their modules. This serves their customers with an easy-to-use API that allows them to transition between different modules for different SoC versions and/or wireless standards. It also helps the module company retain the module customer as a result of their software investment; the customer won’t want to port their code from the proven, hardened, and mature wireless module to a new, unproven, and unfamiliar wireless SoC. Single Source for Wireless Modules and Wireless SoCs Some suppliers sell both modules and SoCs. As such they may support software migration between modules and SoCs. Silicon Labs is one example of such a company. The company has a 20-year legacy of pioneering wireless SoCs, and a long history of working with module companies. Recently, the company acquired two strategic module providers: BlueGiga, a company specialized in designing, certifying, supporting, and manufacturing Bluetooth and Wi-Fi modules, and Telegesis, a leading provider of ZigBee and Thread modules. Silicon Labs has become a one-stop-shop for both wireless SoCs and wireless modules, delivering common software, stacks, support, and development tools. Conclusion The answer of whether or not to use a wireless module or a wireless SoC has a high degree of associated complexity that depends on volume, time to market urgency, risk tolerance, and available resources. By choosing a single supplier who can deliver both modules and SoCs while protecting software investment, the migration from module to SoC is simplified if and when the breakeven analysis warrants the move. Check out Silicon Labs Wireless Solutions Check out Silicon Labs Bluetooth Solutions
- 10. www.silabs.com | Six Hidden Costs in a Wireless SoC 9 SoC Costs Module Costs Wireless Standards Body Certification (Single) (4,000)$ -$ Wireless Memberships (Single) (4,000)$ (4,000)$ Reg. Approvals (US, IC, EU, Korea, Japan) (36,800)$ (5,000)$ Lab Equip or Rental for Development (3 months prorated for SoC dev) (15,000)$ (5,000)$ RF Expertise (3 months for SoC design and debug) (20,000)$ -$ RF, Dev, Cert & Govt Approval Cost (79,800)$ (14,000)$ SoC TTM Difference vs. Module (3-6 months) 3 - 100KU Pricing Module Cost (BGM113) 3.07$ SoC Cost (EFR32 32 QFN w/ 256 Flash) 0.99$ SoC BOM Cost 0.50$ SoC Total Cost 1.49$ SoC Savings vs. Module 1.58$ 40% Product Retail ASP Wireless Premium @ 40% GM on Module Price 5.12$ 40% Annual Volumes 10,000 25,000 50,000 100,000 200,000 300,000 Total Revenue 51,167$ 127,917$ 255,833$ 511,667$ 1,023,333$ 1,535,000$ Module Dev Costs (14,000)$ (14,000)$ (14,000)$ (14,000)$ (14,000)$ (14,000)$ Module Costs (30,700)$ (76,750)$ (153,500)$ (307,000)$ (614,000)$ (921,000)$ Module Net Profit 6,467$ 37,167$ 88,333$ 190,667$ 395,333$ 600,000$ SoC Dev Costs (79,800)$ (79,800)$ (79,800)$ (79,800)$ (79,800)$ (79,800)$ SoC TTM Lost Revenue (12,792)$ (31,979)$ (63,958)$ (127,917)$ (255,833)$ (383,750)$ SoC + BOM Costs (14,900)$ (37,250)$ (74,500)$ (149,000)$ (298,000)$ (447,000)$ SoC Net Profit (56,325)$ (21,113)$ 37,575$ 154,950$ 389,700$ 624,450$ Breakeven (SoC Profit - Module Profit) (62,792)$ (58,279)$ (50,758)$ (35,717)$ (5,633)$ 24,450$ Appendix Appendix 1: Breakeven Calculations
- 11. www.silabs.com | Six Hidden Costs in a Wireless SoC 10 Appendix 2: Costs of Designing a Wireless SoC onto a Product Board and Going to Production Cost Category Module Cost Confidence Level (%)? Comment? SoC Cost Confidence Level (%)? Comment? Selecting antenna Zero 100% Med 50% – The supplier likely has a list of recommended antennas. Even so, picking one with confidence can require careful analysis. Laying out antenna Low 90% – As an all-in-one system, a module is hard to mess up. However, there may be restraints on module placement and “keep-out zones” that could get messed up. It’s also likely that the module package probably includes shielding to account for these eventualities and so the probability of these issues is really low. High 90% – Very high likelihood of trial-error-tweak-repeat cycle. Even highly experienced RF engineers spend weeks optimizing antennas for Rx/Tx performance and low BOM cost. This includes rigorous attention to keep-out zones, effectively isolated inductive loops, component selection and placement, etc… Also likely to need RF expertise, lab equipment and an RF-isolated testing environment. Optimizing antenna layout Low High Reducing interference to antenna inputs Low High 90% – Very high likelihood of coupled noise into RF front end from unanticipated and/or unintentional radiators. Reducing interference to antenna output power Low Med 50% – Very likely that suboptimal layouts will degrade output performance; unintentional interferors will also degrade output power. Pinout complexity Standard Module companies mask SoC pinout changes by accommodating them in an unchanging module footprint. Standard SoC pinouts may change between alpha and production silicon. Likewise they may change with subsequent releases. Software complexity Low / Med 50% – It’s likely that module companies have an “SoC abstraction layer” development software and API. It varies from supplier to supplier. Low / Med 50% – Depending on the SoC company’s design philosophy, their software APIs may be super easy or super hard. It varies from supplier to supplier. Regulatory certifications None / Low 100% – Modules can come pre-certified for various regions and wireless standards. There may be some product-level certs required that the module supplier cannot provide, driving some incremental cost here. High 100% – Each product must be certified in each desired regulatory region and for each supported wireless standard. This is a time consuming and expensive task, and not always successful the first time resulting in “redos.” Standards certifications
- 12. www.silabs.com | Six Hidden Costs in a Wireless SoC 11 Appendix 3: Regulatory and Wireless Standards Certification Cost Estimates Certification Body Link / Comment Estimated Costs Module Applies (Yes/No) Regulatory US FCC, Parts 15B and 15C for unlicensed radios https://en.wikipedia.org/wiki/Title_47_CFR_Part_15 This page provides an easy-to-read guide. ~$7,900 Yes for Part 15B Industrie Canada (IC) http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf01698.html Guidelines for testing: http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf01130.html FCC Part 15 certification applies for IC certifications with written reports stating cross-country compliance. ~$7,900 Yes Europe ETSI and CE Covers Europe, Africa, Middle East and parts of Asia. http://www.etsi.org/standards/looking-for-an-etsi-standard/list-of-harmonised-standards EN 300 328, EN 301 489, and EN 60950 are all important for unlicensed radios. ~$7,900 Yes South Korea http://rra.go.kr/eng2/cas/introduction.jsp ~$4,500 Yes Japan MIC / Telec http://www.tele.soumu.go.jp/e/sys/equ/tech/ ~$8,600 Yes Sub-GHz / Proprietary wireless Generally only require regulatory compliance. Yes Bluetooth® Membership fees https://www.bluetooth.org/en-us/members/membership-benefits $0 - $8,000 (or higher) No Qualification overview https://www.bluetooth.org/en-us/test-qualification/qualification-overview Yes Qualification fees overview https://www.bluetooth.org/en-us/test-qualification/qualification-overview/fees $4,000 - $8,000 Yes Qualification FAQs https://www.bluetooth.org/en-us/test-qualification/qualification-overview/listing-process-updates ZigBee® Membership fees http://www.zigbee.org/zigbeealliance/join/#levels http://www.zigbee.org/Join/HowtoJoin.aspx http://www.zigbee.org/Join/MembershipFAQ.aspx $4,000 - $9,000 (or higher) No Qualification overview http://www.zigbee.org/zigbee-for-developers/zigbeecertified/ Yes Qualification fees overview Per test house ~$4,000 Yes Qualification FAQs https://docs.zigbee.org/zigbee-docs/dcn/05/docs-05-3594-04-0zqg-zigbee-certification-testing-faq.pdf Helpful sites Northwest EMC http://www.nwemc.com/
- 13. www.silabs.com | Six Hidden Costs in a Wireless SoC 12 TUV http://www.tuv.com/en/corporate/business_customers/product_testing_3/product_testing.html NTS https://www.nts.com/services/certification_services 7Layers http://www.7layers.com/#!/type-approval/ Making Electronics Smart, Connected, and Energy Friendly Silicon Labs (NASDAQ: SLAB) is a leading provider of silicon, software and system solutions for the Internet of Things, Internet infrastructure, industrial control, consumer and automotive markets. We solve the electronics industry's toughest problems, providing customers with significant advantages in performance, energy savings, connectivity and design simplicity. Backed by our world-class engineering teams with unsurpassed software and mixed-signal design expertise, Silicon Labs empowers developers with the tools and technologies they need to advance quickly and easily from initial idea to final product ® Copyright 2015, Silicon Laboratories Inc. All Rights Reserved. Silicon Laboratories, Silicon Labs, SiLabs and the Silicon Labs logo, CMEMS®, EFM, EFM32, EFR, Energy Micro, Energy Micro logo and combinations thereof, "the world’s most energy friendly microcontrollers", Ember®, EZLink®, EZMac®, EZRadio®, EZRadioPRO®, DSPLL®, ISOmodem ®, Precision32®, ProSLIC®, SiPHY®, USBXpress® and others are trademarks or registered trademarks of Silicon Laboratories Inc. All other products or brand names mentioned herein are trademarks of their respective holders.