Zurich startup aims to unwire factory networks

ABB is replacing cables with wireless technology in factories and plants (ABB) swissinfo.ch

A Swiss startup is selling wireless chips that enable cutting the cord on the miles of cabling that connect temperature, humidity, electricity, and control sensors inside factories and even homes.

e-Vision AG is its name.

In 1999, a team of designers that developed some of the world’s first digital cellular (GSM) chipsets took the risky move to leave their jobs at a Philips R&D lab in Zurich to start their own firm.

Unlike its next door neighbour in bustling Zurich-North, Bridgeco AG, which has raised several tens of million in venture capital funding, e-vision is self-funded.

Bridgeco raised capital because it immediately started up specifically to develop its own line of chips, whereas e-Vision earned the cash it needed to develop its own line of wireless radio frequency products by solving design problems for big name chipmakers, developing special purpose chips specifically for such customers.

“We’ve been approached by venture capital firms, but we prefer to work from cash flow,” explained Thomas Wolff, co-founder and CEO of e-Vision, adding that he feels there has to be a good match and so far “we have not met a VC that we felt we could work with”.

The young Swiss firm hopes to grow its business on the back of its YellowFoot line of products this year which it manufactures in the Far East.

It currently collects royalties and sales revenues on about one million chips per year, according to Wolff. Its customers are brandname wireless networking equipment and system manufactures.

It is not unheard of for semiconductor innovators to begin like this, at least in Switzerland. Micronas Semiconductor, now worth more than a billion francs, started up in the same way until it decided to supply Nokia with chips, at which point it sought equity financing.

“Analog circuity design combined with radio frequency functions is typically where Switzerland has world-class expertise. Xemics SA based in Neuchatel is an example,” commented Christian Waldvogel, managing partners at Vinci Capital, a venture firm based in Geneva. Waldvogel formerly worked for Intel Capital, the venture arm of the chipmaking giant.

New market, new growth

The new line of semiconductors from e-Vision is based on an emerging industry standard called Zigbee, widely promoted for use in home and industrial automation.

Siemens, for example, a customer of e-vision’s uses such wireless chips to enable remote meter reading for electrical utility companies. The industrial automation is a market that already exists.

Newer is the home automation application. Home automation is a catchall term for networks that enable home owners to switch on and off remotely or to monitor things like temperature, power consumption, on/off state in appliances, and so on via a mobile phone or PC.

ZigBee is similar to Bluetooth, which is typically used to enable communications between mobile phones, PDAs, and increasingly the hands free headsets that go with mobile phones, a market that Xemics is targeting, by the way.

Although slower, Zigbee has a longer radio range and more flexibility (it can be implemented in a mesh topology). Moreover, it consumes less power than Bluetooth.

Though barely a blip on the radar today, ZigBee, is set to grow over the next two years as the standard is finalized, according to a report by ABI Research of Manhasset, NY.

ABI forecasts global shipments of one million ZigBee devices in 2005, growing to 80 million units by the end of 2006.

According to ABI Research analyst Chris Lopez, the industrial automation sector will be the first to adopt ZigBee devices, with home networking buyers following about a year later.

Fierce competition

Competition for the ZigBee market will be intense. Big names, such as Texas Instruments and Motorola, are aiming for this market, even before the standards were finalized.

It is something Wolff is well aware of. But he sees opportunity despite the competition, pointing out that many of the major manufacturers of semiconductors do not have the intellectual property and the skills to do the kind of radio frequency integration required by emerging Zigbee equipment vendors.

So his tiny startup company with its catalogue of intellectual property and proven technology has a chance to make inroads into the market.

Nevertheless, the dearth of radio frequency experts is felt even as far away from Silicon Valley as Zurich. According to Wolff, the greatest challenge in running e-Vision is the retention and recruitment of qualified radio frequency engineers.

“It is challenging to find experts. We’re constantly looking for people. We’ve searched as far as the US, but have been lucky recruiting from the ETH [Swiss Federal Institute of Technology in Zurich] and from several labs in the region,” said Wolff.

by Valerie Thompson