Make or buy Radiocrafts Life cycle cost of ZigBee solution

Make or buy Radiocrafts Life cycle cost of ZigBee solution
Make or buy
Life cycle cost of ZigBee® solution
Ørjan Nottveit, Radiocrafts AS
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Agenda
¾Different HW solution
¾True cost of a ZigBee HW solution
¾LCC (Life cycle cost)
¾RISK
¾Business solution
¾Key factors for choice
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Different HW platforms
¾ Single chip solution (SoC)
¾ Dual chip solution (MCU + transceiver)
¾ Module
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Myth
Price
USD
Single
chip
Dual
chip
Module
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What is the true cost
¾ Total solution = LCC cost
¾ Chip(s)
¾ Supporting components
¾ Crystal(s), Balun, Shielding Can,++
¾ Design cost
¾ Test cost/Yield loss cost
¾ Supply chain cost
¾ Design support cost
¾ Financial cost/risk
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What is the true component cost
¾ Chip (single or two)
¾ Two crystals
¾ Antenna
¾ Balun
¾ Shield can
¾ PCB, Passive components
¾ Might need EEPROM, Flash, PA, RF
switches, filter, logic…
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Design cost
¾ The design from an external design house of
a ZigBee HW solution might be $150k*
*1 RF engineer: design, schematic, layout, test,
qualification, documentation. 7 months=1100
hours @ $120 = $132k + prototyping.
¾ If you will produce 50k this will add $3 per
end product
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Test cost
¾ You need to test to check for failure and
monitor critical parameters
¾ Test jig with RF instrumentation
¾ Automatic test program to reduce test time
¾ Total investment estimated to $100k
¾ Test time
¾ That equals $2 per end product for a 50k
volume
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ETSI/FCC qualification
¾ ETSI certification for CE marking
¾R&TTE directive 1999/5/EC.
¾ETSI EN 300 440, EN 300 328
¾ERC RECOMMENDATION 70-03
¾ FCC require formal certification
¾Tests must be done at FCC approved lab
¾ Time-consuming and costly
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Good yield is crucial for low cost
¾Example
¾99% yield
¾1 out of 100 must be analyzed and
repaired= $50
¾Increased cost by 50 cent
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Supply chain cost
¾Compare prices and negotiate prices
with many vendors
¾Purchasing and logistics for 1 vs. >30
components
¾125h @ $120 = $15k= 30 cents per
product
¾Shipping, insurance and payment fee
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Design support
¾Component change notification
¾New suppliers
¾Yield changes
¾Support cost
¾15hours*11 months=165 hours
¾165 hours*$120= 40 cents per end-product
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How about that myth again..
Price
USD
Test
Test
Design
Design
BOM
Design
BOM
Single
chip
Dual
chip
Module
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Cost @ 1k
Chip
Module
BOM
~$ 10 (1k)*
~$ 21 (1k)*
Supply chain
$ 0.3
$ 0.1
Yield loss
$ 0.5
0
Life support cost
$ 20 000
$ 1000
HW Development cost
$ 150 000
$10 000
Test development
Incl. RF instrument
$ 100 000
0
Total per device(1k)
$ 283.3
$ 32.2
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Cost vs. volume
Chip based
$100
Module
$10
$1
1k
10k
100k
1M
10M
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Making your own module
¾ZigBee functionality to more than ONE
product
¾Ending up making a company module
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RISK
¾RISK of not selecting the “best” chip
¾RISK of being too late in the market
¾The RISK of upfront investment
¾The RISK of poor RF performance
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Future proof
¾A new and cheaper chip is available
before your project ended
¾Your chosen chip supplier is no longer
competitive
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Cost of upfront investments
¾$250k upfront for design, sourcing, test
development, prototype series
¾This gives a monthly cost of $1000
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Time to market
¾Making a chip solution will take 6-9
months longer than buying a module.
¾If you are 6 months behind your
competition, will that matter?
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Time to profit
Profit
Module
Time
Chip solution
Loss
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A good RF solution
¾A design that works might not be good
enough
¾Compliance to standard
¾Range
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Other business options
¾Start with module for low and medium
volumes and optimize cost for high
volume
¾Customized modules
¾Licensing of IP
¾Making a chip based solution
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Licensing IP
¾Proven design
¾Small adjustment needed to adapt to new
PCB
¾No SW change when going from
medium volume to large volume
¾No large investment in development
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Licensing IP
100
Module
Single chip
solution
Licensing
10
1
100
1k
10k
100k
1M
10M
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Key factors in choice
¾Do you have the competence?
¾Do you have the instrumentation?
¾What is your time schedule?
¾What is your volume?
¾Do you have the money to take financial
RISK?
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Competence
¾RF resources are hard to find
¾Hiring RF consultants is expensive
¾Utilizing unused internal resources is a
good option, if they exist
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Instrumentation
¾RF instruments are expensive
¾RF signal generator
¾RF spectrum analyzer
¾RF network analyzer
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Time schedule
¾If you need to release your product
within one year, you should go with
module
¾If you shall enter the market in 18
months you could evaluate a chip
solution
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What is your volume
¾ <50k – Buy module
¾ >500k – Chip design or licensing
¾ 50k-500k – Depends on other factors
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Summary
¾Life cycle cost vs. chip
¾RISK
¾Business model
¾Factor that influence choice
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Using ZigBee has never been
easier than it is today!
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Questions?
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