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product, or maybe a small product
line in a few cases. They all had
niche specialties. One person
was the owner, the chief designer
and the applications engineer,
and products evolved through
regular, direct communication with
customers. These were very tight-
knit relationships: customer-supplier
teams, where customers worked
closely with their preferred suppliers,
and suppliers specialized to specific
customers’ needs. “Commodity”
wasn’t even in the vocabulary. We
were inventors, creators, pioneers,
even artists, creating innovative
solutions to specific customer
challenges.
Fast forward fifty years. The markets
for RF technology have ballooned.
The number of applications has
grown from just a few in the post-
World-War-II period to the order of
hundreds,andmaybeeventhousands
today. In 1985, Martin Cooper and
Motorola released the world’s first
cell phone. That was an inflection
point in the growth of the industry.
Around that time, Mini-Circuits was
supplying Motorola with 200 units a
week for their cell phone; today the
weekly volume for cellular handsets
is well into the millions of units. The
popularity of applications created
through cellular, WiFi, eventually
IoT and all the consumer RF devices
and services those technologies
enabled drove massive demand for
volume and pressure on price. In
that landscape, and in the transition
leading up to it, the cottage industry
of suppliers was no longer equal to
the demand, so the industry had to
evolve. Suppliers had to adapt to
achieve performance, quality and
competitive pricing at the scale
these new markets demanded, and
most adapted through consolidation.
The surge in demand brought about
an evolution in quality standards in
terms of sigma. Quality has always
been and remains inseparable from
the definition of value: customers
expect performance that meets their
system requirements with a high
degree of repeatability between
units, and the assurance that parts
won’t fail through the operating
life of the system they’re designed
into. But as the industry has grown,
suppliers have innovated design
tools, processing techniques, ESD
safeguards, measurement methods,
and statistical approaches to achieve
quality at an astounding level of
precision. As a result the standards
for product quality are higher now
than they’ve ever been. At the birth
of the industry, 1000 failures per
million was considered exceptional,
whereas today it’s not unusual to
have a requirement for 10 failures
per million or less.
Finally, products have evolved from
a diverse universe of single-function
components to highly integrated,
digital-type solutions aiming toward
total plug-and-play compatibility,
where one part is a form/fit/function
drop-in replacement for another
part. Where hardware is secondary
to the software and firmware that
wraps around it. Where, dare I say,
the tight-knit, specialized customer-
supplier team seems, on the surface,
to have diminishing relevance.
Does this new paradigm work? In
some ways it seems hard to deny.
Commoditization: New
Paradigm or Misguided
Perception?
Today, giant companies like Apple,
Samsung, and their peers dominate
the consumption of RF products.
They shape the RF market and the
RF supply chain. Because the trend
in this volume market is gravitating
toward ever more integrated, more
repeatable solutions, the popular
viewpoint has emerged that the
market for RF products is becoming
commoditized. With that viewpoint
comes a parallel argument that RF
application support is unnecessary
for a true, fully integrated system-
on-a-chip solution. Pick a catalog
part, plug it in, and it works.
Performance is a guarantee. Value,
they might say, comes down to
competitive price, fast delivery, and
superior logistics and distribution.
In this newworld of highly integrated,
super-cost-sensitive solutions, a
few, very large suppliers are fully
dedicated to supporting those high
volume applications. However, while
these suppliers are offering fully
integrated system-on-chip solutions,
the prediction of a true plug-and-play
commodity paradigm has yet to be
fulfilled. In fact, these suppliers have
entire teams of engineers embedded
with their customers to help them
integrate products, to understand
and anticipate customers’ future
trajectories, and to make sure that
their own product development
is meeting the demand of those
customers a year or two in advance.
So while there’s a perception that
system-on-chip solutions are virtual
commodity items, or they’re headed
that way, those suppliers still extend
heavy resources to maintain close
collaboration with their customers at
the engineering level.
While most of the headlines in the
RF & Microwave market are focused
on these volume markets, there
is still a substantial market for RF
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