SPECIAL INTERVIEW: Interview with Stefan Skarin, CEO of IAR Systems and Shinichi Iwamoto, Senior VP of Renesas Electronics Corp.

The 2011 Great East Japan Earthquake and Tsunami showed how invaluable embedded electronic systems are for improving safety and comfort. This reality has reinforced the “Global & Green” corporate vision previously created by Renesas’ top management. And because the very rapid recovery of our production capability in Japan wouldn’t have been possible without the assistance of legions of people and organizations, we are now placing greater emphasis on relationships with key business partners as we fulfill that vision.
In the area of development tools, for instance, IAR Systems has provided our customers with software development tools for over 20 years. To highlight the relationship between our two companies, EDGE interviewed Stefan Skarin, Chief Executive Officer of IAR Systems, and Shinichi Iwamoto, Senior Vice President of Renesas Electronics Corp. They gave us some very interesting comments about trends in embedded-systems markets around the world.

EDGE: Because there are so many economic uncertainties in the world today, would you please give us your views of economic and technology aspects of the embedded systems market today, and also tell us what changes might occur in the near-term future?

Iwamoto: The situation at Renesas Electronics today is good, despite last year’s natural disaster. Our production lines are stable and output levels are meeting customers’ shipment schedules. Fortunately, we remain the world’s #1 MCU supplier, but our market share dropped about 1%, so now we must grow anew.
Our “Green & Global” corporate vision drives us to achieve sales gains in the developed and developing countries that are moving toward Green societies, Green systems and Green devices (see Figure 1). This shift is happening regardless of economic uncertainties because new electronic systems generate major benefits for consumers, businesses, governments and the environment. By producing large volumes of MCUs for innovative products and applications, Renesas is expanding in many markets and geographies.

Figure 1: Vision for Renesas' MCU business: enabling embedded
systems that enhance personal lives and benefit societies.

Mr. Skarin: I share your optimism about the growth of the embedded systems market around the world. Also, IAR Systems agrees that your ‘Green and Global’ vision is a powerful one—not only for MCUs, but also for development tools.
MCUs and hardware/software tools are distinct yet inseparable elements of system solutions. Being an independent tools supplier, we have relationships with other MCU vendors, of course. But after working with the experts at Renesas for over 20 years, we recently have seen our company’s growth accelerate, due in part to the market acceptance of your new products—especially RX series MCUs. They’re particularly popular for ‘Green’ applications.
The global perspective that Renesas has adopted aligns well with IAR Systems’ geographically expanded strategy. We’re based in Sweden and have been very successful in Europe and the United States. Now we want to win new customers in China, India and Brazil, where your company is widening its presence, as well as in other countries with growth economies. Yet we must accomplish this while continuing to deliver the excellent service that earns us excellent customer loyalty and a high rate of repeat purchases.

Iwamoto: I completely agree about the need to meet customers’ expectations. For us, this is especially the case with regard to system-design issues and volume-production requirements. It’s a primary reason why—going forward—Renesas is concentrating its MCU R&D efforts mainly on the RL78, RX and RH850 MCU product lines (see Figure 2), while our support of legacy devices continues.

Figure 2: Advanced architectures for a broad span of embedded system applications.

The latest MCUs in our broad solution portfolio excel for a vast span of new system designs. They provide excellent flexibility for system upgrades and variations, while enabling customers to efficiently leverage development experiences and investments in system architectures and application code.

Mr. Skarin: Indeed, the new Renesas MCUs have very good features and performance. Moreover, the timings of their introductions are right. Customers are accelerating the process of moving up from 8-bit and 16-bit MCUs to 32-bit devices, and they really see that both of our companies are giving them splendid opportunities to do that.
We have worked with Renesas extensively on the RX series chips, as well as the devices in the RL78 series, and our tool products for RX chips in particular have been very well accepted.
System engineers appreciate the performance boost of the latest version of our compiler. It improves the core-mark scores for the RL78 and the RX and RH850/V850 MCUs by over 30% compared to its predecessor. This improvement produces a very ‘Green’ result, by the way. The better-optimized code lets the MCU complete computational tasks faster, so it can go back to sleep mode quicker, saving power.

EDGE: So, one technology trend is an accelerating shift to 32-bit MCU architectures. What other noteworthy trends are occurring in embedded systems markets today?

Iwamoto: Most of the engineers Renesas serves are always working on projects with short—and often shorter—deadlines. When their companies see a market window open, they rush to take advantage of the opportunity as fast as possible. Then, when new embedded systems are developed, customers want us to ship MCUs in volume without delay.
These time pressures are having major impacts on Renesas. Are they having effects on IAR Systems, as well?

Mr. Skarin: Yes, they are. Short design cycles are encouraging our customers to buy development tools that are exceptionally easy to use, like ours are. It’s a big plus that our products save customers valuable R&D time, not only in the early stages of a project because they’re so easy to use, but also in the later stages because IAR Systems’ tools have excellent debugging and optimization features.
Other trends we see impacting our markets are the growing complexity of embedded applications, the increased demand for low-power solutions, and a heightened need to reduce engineering risk. But above all, customers tell us that they must drive innovation at an ever-faster pace to keep ahead of new competitors.

Iwamoto: The increase in customers’ time pressures is a key reason why Renesas is focusing our MCU R&D on the three product lines I mentioned earlier. The extensive compatibilities between the MCUs in the RL78, RX and RH850 product lines provide the exceptional design flexibility needed for quick responses to new requirements.
Another trend related to shorter system-development projects is an increased perception by our customers of the intrinsic value of our MCUs. Attempts to clone an MCU add costly delays to design cycles and are made more difficult by greater chip complexity. Thus more customers are carefully analyzing our MCU technology, our superior features, the support we offer, and Renesas’ solid technology roadmap. They factor those issues into design decisions—along with device cost, of course.

Mr. Skarin: At IAR Systems we are benefitting from the same change in perception, especially among customers who previously wanted our software tools yet were reluctant to pay for them. Today, they better understand that we give expert support to license holders—assistance that helps eliminate design mistakes, promotes higher system performance, and speeds product development. Better recognition of the value we deliver helped boost revenues by 26% and double our profit last year. IAR Systems’ excellent growth is also due to the improved Embedded Workbench platform, which meets requests for simplicity and project wizards (see Figure 3).

Figure 3: IAR Embedded Workbench—a popular powerful
strategic platform for system development.

Iwamoto: Renesas sales engineers emphasize that we are selling solutions, not just MCUs—solutions that are business enablers. We find that customers better understand the importance of our approach now than they used to.
Additionally, today questions frequently are asked about our ability to respond to rapid boosts in demand. This has become an important component-selection criterion. In response, we now have geographically dispersed internal and external facilities delivering chips meeting our high standards for quality and reliability. After a future disaster, a flexible mix of manufacturing and warehouse capabilities will allow us to maintain delivery schedules to a large extent.

Mr. Skarin: Recently, more customers have told us that they are looking for strong companies that can be business partners, not just vendors. IAR Systems’ reputation and capabilities are held in high esteem in embedded-systems markets. And we have the good fortune to be working closely with Renesas, because your company is a large, strong partner. Your production guarantees give customers great confidence when they choose you as a silicon supplier. I think that, for us, it’s natural to try to work with you as much as we can.
Also, major customers are responding favorably to our message that they can implement ‘Standardization without Limitations’ by selecting products from Renesas and IAR Systems.

EDGE: Will you please explain what you mean by that comment about standardization and how it correlates with the trends discussed earlier, Mr. Skarin?

Mr. Skarin: An important aspect of standardization is consolidation in operational areas of businesses. In the embedded systems market, it especially applies to product development infrastructures. We see a trend among our customers that they are looking for ways to improve their development workflows and shorten the time to market, and we respond to this need for standardization by delivering a consistent, flexible software design and debugging environment.
Obviously, another consolidation aspect of standardization is the trio of MCU architectures being developed by Renesas.

Iwamoto: Your comments remind me that although Renesas also produces system development tools for MCU customers, our primary focus is on producing silicon devices. So we have difficulty acquiring as much tools expertise as IAR Systems does. Fortunately, our long collaboration has given customers extra advantages.
Current technology and market trends and global growth initiatives are making our relationship more synergistic. As a result, it is quite is reasonable to anticipate closer collaboration in the future. I look forward to that.

Mr. Skarin: I, too, am very pleased to have discovered our shared goals. I am optimistic about the bright future we have discussed.

EDGE: We thank you both for providing our readers with interesting insights about industry trends and how Renesas and IAR Systems are helping to shape those trends.