Business barometer: 2017 trend predictions

1Trend predictions during an election year are extremely challenging, especially in the circus election that is going on in the United States right now. By the time you read this, it will all be over, and there is a good chance that I may be headed to Australia for a few years! Here goes my attempt to share a few highlights for what developments I expect to unfold in the market next year.

U.S. military spending the past 2-3 years has been relatively stable, as I have previously stated. But that was before anyone could have imagined the presidential candidates that have emerged from the U.S. election process.

I don’t foresee any major shift in strategies or spending. It is difficult to predict what either U.S. presidential candidate might do to the budget. Either one could go either direction from what I can see from my perspective.

Global spending on defense is where the action is right now. The unrest in the Middle East paired with global power positioning by China, Russia, and the United States are keeping the cash flowing for defense spending around the world.

Technology will be focused on intelligence systems, drones, and autonomous weapon systems.

Optical interconnect baby steps

The initial family of the standard for optical interconnection with is now published. For now, the VPX community is satisfied with the options they have for optical interconnects with 66, but they also realize that more is needed. Presentations on anything optical related at a meeting always gets a good crowd. The discussions about the next steps are still a whisper, but they are getting louder and more frequent.

You can see the innovation wheel slowly starting to turn in this area.

Mezzanines blade performance

The standard for + is taking a bit longer to complete than expected; however, the work done has added substantially to the quality of the standard. The list of participating companies has grown significantly with major and user companies stepping up to join the effort. The performance improvements are pushing advancements in other areas, such as VPX. The FMC+ standard should be published early in 2017.

High-end embedded processors

As expected, 2016 was full of product announcements using various 6th Generation Intel Core processors. SBC designers are getting more creative with cooling alternatives on small 3U and 6U form factors, now implementing several variations of Intel Xeon class processors that use 85+ W of power. Just when you think they can’t pull any more heat out of a slot, they figure out something new. Several cooling schemes are now being implemented with VPX: air, conduction, air flow-through, and air flow-by. Liquid cooling is bantered about, but has not been practically implemented in many systems – yet.

More and more is being discussed concerning the limitations of the traditional von Neumann processors architecture. The bottlenecks to memory and I/O are becoming extremely difficult to overcome. Many system-level architectures are now incorporating FPGAs in the so that processing can be taken to the data. For many types of applications, this is a preferred way to increase performance. Make note of the fact that Intel bought Altera, foreshadowing what we might expect in the near future.

Some of the leading contenders to the von Neumann architecture are various takes on neural networking based on threshold logic algorithms that take us away from binary states. Complex data-like images can be processed much faster with neural nets. It may not be long before this type of architecture lands in your smartphone.

Quantum computing exploits the bizarre and counterintuitive way that matter behaves at an atomic level to perform some amazingly fast processing. First-generation quantum processors are in action now. Quantum computing is especially interesting in the search for more secure computing due to the ability of quantum computers to factor very large numbers that support very challenging encryption algorithms. The more practical implementation of quantum computers will be in searching and mining the massive amounts of data that we are collecting each day.

All this indicates a quickly approaching inflection point that is going to put past thinking about processors on its ear.

Semiconductor supplier mergers

Mergers are reshaping the semiconductor supplier industry, having potential impact on high-end embedded processor roadmaps. NXP being courted by Qualcomm will likely throw yet another curve at PowerPC.

In July, Japanese Internet and telecommunications conglomerate SoftBank Group Corp. announced it was buying ARM Holdings PLC. While the plan of record is to continue the current course, we all know how that story tends to play out. I remain bullish on ARM-based processors as an emerging major player in the critical embedded computing markets, but the lower-end Internet of Things (IoT) markets have control of the roadmap. My biggest concern is what effect this activity is going to have on processor innovation. It makes me take a second look at some of the more out-there options like Quantum processors.

Local manufacturing

Ten to 15 years ago it was trendy to move manufacturing to Asia as board suppliers looked for ways to reduce costs. Before the last pick-and-place machine was even positioned, this strategy started to fall apart. Labor costs in Asia started creeping up. Product development times doubled and even tripled in many cases. Product quality suffered. In the meantime, we were losing U.S. expertise in manufacturing while the labor pooled realigned to the reduced demand for manufacturing expertise.

Now we are in a situation where many companies are looking to bring back local manufacturing. Cost is much less of a factor, and concerns have moved to the forefront. This is going to take a long time to sort out despite what Donald Trump suggests.

Fortunately, many smaller board suppliers kept their manufacturing home-based, making them well positioned for the reverse in the outsourcing trend.


With military applications driving so much of the for VITA technology, the urgency to address the issue of security has risen. Security touches the entire supply change, forcing new decisions on suppliers, manufacturing strategies, and even the way products are being developed.

While it may not be as easy to take down the power grid of a country as it is portrayed on TV, it does make you start to wonder. With everything being connected through the IoT, you can never assume that a device will be 100 percent secure.


2017 is sure to be full of surprises. The world is very complicated and becoming well-connected, making the rate of change increase faster with each passing year. Meanwhile, I’m shopping for property in Australia!