Embedded Computing Systems Make Inroads in New Economic Segments

Picture of Lisa Su, CEO of AMD

More enterprises in various segments of the economy are embracing embedded computing systems to differentiate themselves, improve productivity and enhance competitiveness. They are drawing intense attention from design engineers, semiconductor suppliers and software vendors.

Embedded computing systems – both hardware and software – are going economywide. Figures from research organizations and semiconductor manufacturers indicate a surge in the use of embedded computing systems in designs requiring low power consumption, inexpensive, adaptable, and customizable functionalities.

Today, the digitalization of the economy is changing how companies operate and engage with customers whether they are equipment manufacturers or service providers, according to researchers who say this trend is driving a surge in the adoption of embedded systems.

Very few segments of the economy have been left untouched by the race to digitalize operations, analysts said. The extensive transformation taking place at companies and within economy segments is being aided and propelled by embedded computing systems, which engineers are adapting for often widely differing applications.

The task-specific attributes of embedded computing applications have been a blessing to end-users, equipment vendors and their supply chain. OEMs responding to new customers demanding mission-specific products are finding it easier than expected to assist by either repurposing existing devices or using software upgrades to customize them for end-users. Analysts say this is one of the reasons behind the surging demand and growth of embedded computing systems, which are finding homes at a widening pool of customers from fields as varied as automotive, banking, healthcare, industrial, security, telecommunications and other segments of the economy.

“The surge in consumer electronics use and the increased use of artificial intelligence in a number of applications around the world have boosted the market for embedded computing,” said analysts at Precedence Research, in a report. “The development of technology in the healthcare and industrial sectors, as well as the rise in demand for automated processes in the automotive and smart home appliance industries, are other factors that influence the global embedded computing market.”

Researchers expect the market for embedded computing systems to increase by more than two-thirds by the end of the decade, rising to $165.7 billion in 2030 from $95.8 billion, in 2021. Accelerating demand for AI products as well as hybrid, electric and autonomous vehicles is one of the factors behind the expected increase in the sales of embedded computing systems, they said, adding that this trend will continue for the foreseeable future.

“In the automotive sector, embedded systems are essential,” the Precedence Research analysts said. “These systems are utilized by the ADAS technology found in hybrid and electric automobiles. The primary driver propelling the market’s expansion is the increasing demand for and adaptation of electronic consumer goods and industrial gadgets.”

Many end-products, software and semiconductor offerings showcasing advances in the embedded computing industry were prominently displayed during the recent Consumer Electronics Show, (CES), in Las Vegas. Companies showing technologies headed into embedded computing systems included Advanced Micro Devices, STMicroelectronics, Microsoft, Qualcomm, and Texas Instruments among others.

AMD’s CEO Lisa Su, who gave a keynote speech in which she talked about the role adaptive computing systems play “in creating solutions to the world’s most important challenges,” also unveiled some of the chipmaker’s latest products aimed at areas where designers are deploying embedded solutions. These include products for many of the economic segments that have increased the use of embedded computing solutions, including aerospace AI, high performance computing, healthcare and PCs and gaming.

“Adaptive technology solutions are unique in that the hardware can be changed and optimized multiple times to perform whichever tasks you need,” Su said. “This allows the chip to be adapted for optimum performance for specific applications or changed on the fly to add new features.”

Embedded computing systems fit the mode of adaptive technology that can be customized by end-users in many economic segments. This explains why they have so successfully penetrated new markets. One other advantage offered by embedded computing systems is the possibility of quick updates of software at a lower cost to the developer and the end-user.

As a result, semiconductor vendors often partner with software developers to optimize embedded computing solutions. In January, for example, German semiconductor supplier Infineon Technologies and automotive AI solutions vendor Aurora Labs, teamed up to advance over-the-air (OTA) update capabilities in the transportation sector. This kind of capability is especially critical in the rollout of software-defined vehicles, the companies said.

“OTA updates are already an essential requirement for today’s software-defined vehicle, where most car features are implemented through software,” they said, in a statement. “As cars become more complex and the pressure to bring features to market more accurately, the number of updates per year will increase drastically. Automakers need to reduce the costs for OTA updates and ensure the update experience is as seamless as possible.”

The hardware-software combo demonstrated in Infineon’s and Aurora’s offerings is critical in the embedded computing segment. Chip developers and their software partners must work together from the product development stage to ensure a successful initial rollout and throughout the product life cycle at the end-user. Zohar Fox, Aurora Labs’ CEO, emphasized the importance of this collaboration in his statement.

“Infineon’s commitment to functional safety combined with Aurora Labs’ Automotive AI is creating new cost-effective solutions for the safety and security of software-defined vehicles,” Fox said. “With SDKs specifically developed for automotive software, developers can deliver state-of-the-art functional safety over the air to the entire car architecture.”

Embedded in automotive

Demand for embedded applications and computing devices from auto OEMs has shot up in recent years with the rise in interests for electric, hybrid and autonomous vehicles. Demand for semiconductors from automakers has also dramatically increased as chip content in EVs grew at a double-digit clip.

Chip suppliers and tier-one vendors serving the automotive market believe the semiconductor content in cars will continue to increase over the next decade as manufacturers add more functionalities to their products. Areas where semiconductors are being used in vehicles include internal operations such as heating, entertainment and controls as well as for other functions related to safety and security, environmental and performance monitoring, and communication systems.

“The cost of an electronic embedded system accounted for at least 25% of a car’s overall cost, and more than 35% for a high-end model,” said Nikhil Kaitwade, associate VP at Future Market Insights, in a report. “Electronic technology has advanced to the point that the quality of electronic components, in terms of performance, robustness, and dependability, now allows them to be used in critical systems. At the same time, as electronic technology becomes more affordable, it may be employed to assist every function in an automobile.”

The research firm projects the automotive embedded system market would grow to reach $8.2 billion by 2032, from $4.5 billion in 2021, increasing at a 5.5% compound annual growth rate. During that period, automakers are expected to focus on tools that will help lower costs and improve time-to-market, benefitting embedded computing system developers.

“All of the functions in a car do not have the same performance or safety requirements, and varying levels of service are expected from the various subsystems,” Kaitwade said. “In most cases, an embedded system in an automobile is divided into many functional domains that correspond to various features and limitations.”

Software rising

Hardware continues to dominate the embedded computing market. In 2021, hardware accounted for 64% of the market with software representing the balance of 36%, according to Precedence Research.

Both hardware and software embedded computing sectors are seen maintaining a high single-digit growth rate over the next several years due to continued strength in demand from various economic segments. Companies like intellectual property vendor Arm Plc, IBM, Intel, Microsoft, and Qualcomm  are very active in the embedded software segment.

Microsoft, for example, regularly partners with semiconductor hardware vendors like AMD as the chipmaker’s CEO noted during her presentation at CES.

“The companies are highly focusing on new product launches and innovations for embedded software to stay competitive in the industry,” said Global Market Insights, in its report.

Meanwhile, automakers are increasingly reliant on software vendors for assistance as the market continues to shift away from the internal combustion engine (ICE) system to electric vehicles. Other economic sectors that are also becoming more dependent on embedded applications include the defense industry, healthcare and industrial. In all of these sectors, too, embedded software offer the opportunity to help reduce cost while improving performance.

The software portion of the embedded computing market grew to $13.5 billion in 2020 and is seen continuing to expand at a 7% CAGR through 2027, according to researcher Global Market Insights. Areas where embedded software computing is growing include artificial intelligence, operating systems for cars, industrial automation and industrial IoT, medical equipment, security, smartphones, and smart cards. The consumer electronics segment is also seeing an increase in the use of embedded software applications.

“Several features offered by the general purpose operating system such as multiple task handling, high security, high synchronization, and lower latency are driving the demand,” Global Market Insights said. “High customization and user-friendly interface offered by major general purpose operating systems, such as Android, Linux, and Windows, are further augmenting their adoption in consumer electronics.”

While relatively new to the application of embedded software, the automotive industry is seen recording the fastest growth and innovations. Auto manufacturers want to differentiate themselves by offering drivers distinct and attractive user interface for EVs and Avs. To achieve this objective, they are partnering with semiconductor suppliers for innovative solutions and pushing these vendors to compliment their products with offerings from embedded software developers.

“The automotive industry is witnessing high demand for various advanced safety systems such as electronic stability control, autonomous emergency braking, adaptive cruise control, and park assistance systems,” said analysts at Global Market Insights. “These systems are extensively integrated with high-end sensors, microcontrollers, and electronic control units (ECUs), which require a robust embedded software platform to manage all the input/output (I/O) peripherals. Increasing requirements for safety & comfort features in vehicles have led market players to focus on developing high-end automotive software and electronic systems.”