Get ready for wireless docking monitors, architecture wars and better chip supplies | Synaptics CEO

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The semiconductor industry has taken a beating in the pandemic, with several years of parts shortages causing product delays, inflation and long waits to buy products. We are now in a global economic downturn, which can turn things upside down and ease the shortage.

Amid this turmoil, Synaptics has been pushing improvements in chips that go into a variety of products, including computer monitors, virtual reality headsets and cars. Its touch sensors go into almost everything you control with a finger touch. And more of those products are infused with artificial intelligence.

Using AI at the edge, Synaptics image sensors can detect if someone has fallen. The company’s chips enable wireless docking between displays and laptops. It makes sensors that detect environments for VR headsets, and components for a universal wired docking station for laptops.

One of the things it’s helping to make a reality is the new wireless docking monitors that will be on display at CES, the big consumer electronics trade show in Las Vegas in early January. I spoke with Michael Hurlston, CEO of Synaptics, in an interview during a demo day at the company’s headquarters in San Jose, California.

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Here is an edited transcript of our interview.

Michael Hurlston is CEO of Synaptics.

VentureBeat: Do you detect much change in the market in terms of the semiconductor shortage?

Michael Hurlston: Most definitely, yes. You’ve been around the business for a long time. At the end of last year, the last calendar year, like all of us we were in scramble mode for chips. The shortage and the semiconductor supply chain problem are well documented. We were in the middle of that. Probably before the summer, maybe at the end of summer, we started to see a significant weakening, and in the fall a very significant weakening. A lot of inventory was built up. We’ll have to work through that. It was relatively easy for us to get a supply now. Not perfect. There are still some areas where there are bubbles. But overall I’d say the supply chain is done for the most part.

VentureBeat: There’s a silver lining in that products are getting out the door now for the end users. The more difficult side is maybe they don’t control the same prices.

Hurlstone: Price is a conversation. Again, I’d say generally it’s held. The bigger problem is—the chip industry as a whole, just in round numbers as an example, let’s say it takes a thousand parts to make a phone or a computer. The computer people, the phone people had 998 of them. They were looking for two. But they kept buying the 998 thinking the two would come. What has happened over the last few months, now the demand has at least leveled off. They sit on many sets of 998 components. When they get the two they are building, but they don’t need any more of the 998. That inventory problem will take quite some time to work itself out as they get the last few components to complete the kit and ship. product Most of the time we’re on the side of the 998. There’s a pretty big inventory issue that I think needs to be worked on.

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VentureBeat: Does this tell us that we still have a lot of old-fashioned problems? Inventory being one of those.

Hurlstone: Inventory is a pretty big problem. Everyone needed better tools to understand what was shipped in, what was ultimately consumed. We’ve been asked by our investment analysts time and time again. Is it a double order? Do people take too much? I don’t know that we had the instrumentation that we would need to say yes or no. The truth is, it’s a combination of things. One, demand has certainly declined somewhat. But certainly more was brought in than was ultimately needed.

Synaptics’ Katana can detect if someone has fallen.

VentureBeat: I tried that new Meta headset, the Meta Quest Pro. It has something like 10 cameras in it. It has all these extra sensors that the others didn’t have. It seems that this is a trend that Synaptics must love, this need for more sensors.

Hurlstone: It’s interesting. My concern now, actually, is that we’re going to go back to a capacity-constrained environment at a faster rate than we ever have before. The macro trends are still absolutely there. There is more semiconductor content in more things than ever before. Your example is good. The Meta glasses have a huge number of sensors. That’s great for us. We make a lot of these sensors. There is a huge amount of screen content. We make the display drivers.

A lot of that, as you know, is on back knots. The Qualcomm processor that drives the Meta glasses, that is in an advanced 7nm process. But the rest of the goodies, the sensors, they don’t need to be, nor will they ever be. The capacity problem, the capacity building at 28nm and above, no one has ever built the capacity. The only thing that has changed is that the demand has gone down. My concern is that we will be right back into a capacity constrained environment once this inventory situation evens out.

VentureBeat: Do you have a dog in the fight when it comes to ARM-related issues? Especially when it comes to RISC-V.

Hurlstone: Not really. We use ARM. We also use RISC-V. We had a pretty good experience with RISC-V. One of the interesting things is that our touch devices are on our own home processor. We feel that as customers become more familiar with third-party processors, we will move away from that. Right now we are in evaluation between the two. We would probably end up going with RISC-V as opposed to ARM, simply because of cost. ARM is very good, but the costs are quite high. In many cases now RISC-V has a competitive product out there that we can use.

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VentureBeat: The interesting pitch for RISC-V is that it’s geopolitically neutral. The various nations of the world are open to it.

Hurlstone: I’d say ARM could make that argument too. They are relatively equally geopolitically neutral. I’m not sure that’s necessarily an advantage. But I do think the big thing is cost. ARM has become a de facto standard in many cases, and they know it. Their costs are probably a bit higher than I would like to see.

VentureBeat: In terms of your technology here, is there a common thread that you see among some of these CES products, a common theme from Synaptics?

Hurlstone: We have many different technologies, as you have seen. Many different end markets, as you have seen. We play on a computer. We play with VR glasses. We play in a car. There are many different things that we do. Our job is to bring those together into platforms. That’s what we’re trying to do. Focus areas for us where we are bringing several pieces of Synaptic technology include VR headsets. We are happy about that. Automobile. We can bring different parts of our technology into that.

And then the clean workspace. You saw a demo there on wireless docking stations. We think we can make wireless monitors, which has been tried a hundred times. I know you know that. The difference we bring is that we have a proprietary video compression algorithm that can generate really low latency and enough compression that you can make mouse movements, which is required on a monitor obviously, at the same time you make high definition video. We think that ultimately catalyzes the idea of ​​the wireless monitor. We’re going to push into that clean workspace using two or three different technologies that we have: the wi-fi, video compression, gaming. We assembled a war chest of technologies. Now, as we go forward over the next few years, we’re going to try to boil them down into some platforms or initiatives that make more sense out of things.

Synaptics launches low-power AI sensors in the home.

VentureBeat: How many people are here now?

Hurlstone: There are about 400 here. The whole company is about 1,800.

VentureBeat: Are you working at the office again?

Hurlstone: Mostly. It was interesting. We actually got people back into the office quickly. We were back in May of 2020. We had two months of working from home and then got everyone in, at least in hybrid, almost immediately. We’ve had less issues with some of the pushback you see around people coming back to the office. People used to work remotely. We always had—very quickly we got to a hybrid model. That’s helped now to keep that, not have employees revolt while we’re trying to get them back to the office.

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Remote work has its challenges. There are good things. You’ve been in the bay area a long time. Cutting out an hour drive each way is a good thing. But there were quite significant disadvantages. The collaboration that the engineers have is very low in a remote situation, and just productivity overall. The average worker probably puts in more time, but you have a mix of things. People definitely used it as an opportunity to take more time away from the office than they would if they were actually in the building.

Synaptics makes components for universal docking stations.

VentureBeat: Do you feel like there’s a generally brighter outlook for getting through some of these crazy years that we’ve seen? Are we going back to a kind of normal market, the macro economy aside?

Hurlstone: You know it better than I do. We had two years of crazy positive where you had a huge shift from spending on services to goods. We’ve been beneficiaries, because a lot of the remote work—we have goodies that go into headsets and docking stations and computers. As people replicated their office environment in the home, we got a nice lift. We’re getting a little stronger as things come back, but the reality is that a lot of our business is consumer. We’ve seen a pretty significant restart over the last few quarters. I would expect that to be here for another two quarters where demand will be lighter than average. It was better than average for two years. It will be lighter than average for the better part of a year. Then we will reach equilibrium, barring another massive unforeseen event.

As I said earlier, my biggest concern is that we haven’t solved the underlying capacity issues in end-edge foundry. When we get back to that equilibrium point, I think we will again be in a supply constrained environment.

However, we are excited about the technologies for CES. Last year we went half way. We had a booth, and then at the last minute everyone canceled. We demolished the booth. Then we had a room with a couple of chairs in it. This year I think it will be full. All of this will be reproduced in our CES booth. We’re pretty excited about people coming and taking a look. I think our technology ends up being pretty good.

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