Brian's Brain

Talk to any semiconductor supplier's spokesperson, ask him or her what the company's most compelling future market growth opportunities are, and there's a pretty good chance the following three candidates will rise to the top of the list (albeit not necessarily in the below alphabetical order):

• Automotive electronics
• Healthcare, and
• Security systems

That first one is the focus of this particular post. It's been rattled off at least a dozen distinct times in recent briefings I've attended. And frankly, I don't buy it.

Current data would seem to contradict my stance. I was in a friend's luxury SUV a few weeks ago, and the incremental tech in it versus my humble '96 Rav4 was jaw-dropping; a dash-mounted GPS with voice recognition and response, whose color touchscreen LCD also served to display the video feed coming from a rear-view camera, an integrated Bluetooth microphone-plus-speakerphone setup, separate climate control settings for driver and passengers, and a music system (albeit not surround sound) whose sonic purity I'd wager exceeds that of the gear in most folks' homes. Another friend has a Prius, and I feel as if I'm entering a videogame arcade every time I go for a ride with him, as I watch the detailed mileage and regenerative braking readout do its perpetual merry dance.

DVD players to entertain back-seat kiddies are also common nowadays, and satellite-delivered content is even available. Less obvious but no less important electronics influences can be found under the hood (emissions control and other electronic ignition systems) and elsewhere in the chassis (computer-assisted braking and shifting). Hybrid vehicles, of course, significantly up the electronics ante compared to their fully carbon-fueled counterparts. And I'm sure there are lots of tech toys I've forgotten in the above laundry list; like I said, I (happily) drive a humble '96 Rav4 and am therefore personally somewhat ignorant of such things.

So what's the deal with my contrarian stance? For part of the answer, I'll focus your attention on one word I used two paragraphs ago; luxury. Often, when a chip company or its systems partner tells me about some whiz-bang new widget, it'll rattle off a customer like BMW, Cadillac, Infiniti, Jaguar, Land Rover, Lexus, Mercedes-Benz, Porsche, or Rolls-Royce...and when I ask the next-level query, it'll admit that the item in question only appears in the upper-end model of the manufacturer's line (and then, often, only as an option). Very few of these upper-crust capabilities, from my experience over the years, end up trickling down into mass-market automobiles.

You'll find the other sequence of alphanumeric characters that bolsters my opinion (and that's directly referenced by this post's title) within a writeup I published a few days ago. $4.09. That's how much a gallon of gas cost here in Truckee, CA two weekends ago. Granted, it was around 20 cents per gallon cheaper in more urban areas like Sacramento, and it had also dipped back down to $3.99 a gallon when I passed by the Truckee pumps this past Saturday night. But the descent, I wager, is only temporary, and the general trend going forward will be upward due to factors such as political turmoil in oil-rich regions, along with the looming (or depending on your perspective, already-passed) reality of the Peak Oil threshold.

News reports in recent weeks are filled with stories of folks drastically reducing the use of their vehicles, turning instead to public transit, to pedal power, or (hallelujah!) to telecommuting. Granted, not everybody is able to harness alternative transportation (or stay-at-home) approaches, at least in the short term, but again I'm speaking in terms of big-picture and long-term trends. And, I'd argue, as gas prices remain high (and go higher), the end result will be a fundamental restructuring of U.S. communities akin to how European towns and cities are organized, an upheaval that'll be especially potent in currently freeway-crazed states like California.

So if folks will be using their cars less often, and commuting less time per use on average, why would they want to load them up with lots of electronics gadgets? Couple that with a decreased per capita automobile statistic going forward, and I think you'll understand the underpinnings of my opinion. To be clear, I remain highly optimistic about the under-hood and within-chassis stuff...monitoring and control of the engine, brake system, clutch and transmission...along with the incremental technology needed to service the inevitable transition to hybrid and alternative fuel-based vehicles. But all the cockpit toys? Label me highly skeptical. What do you think?

Followup: Also see my boss's thoughts (on my thoughts). My fundamental question is also his; what percentage of total semiconductor content flowing into cars is for 'fundamentals' versus superfluous 'toys'?

Followup II: Wired sounds off on the (high) likelihood that (high) fuel prices are here to stay.