How Software-Defined Electrification Will Unlock the Next Stage of Growth For the Semiconductor Industry
Tanktwo pioneers the world’s first (and only) software-defined batteries. Our solutions can perform various functions that even battery industry veterans deem impossible. The magic is in the software — and what makes it a reality is advances in the semiconductor industry.
The trend of data-driven anything and software-defined everything has opened up vast, new opportunities for players in the semiconductor industries. Along with the rise of electrification, we have a perfect storm that will allow manufacturers to expand their footprints and revenue through our software-defined architecture.
The semiconductor industry has experienced two years of record-breaking growth, but 2023 has been a more challenging year. However, there’s a silver lining. After all, in the Chinese language, the word “crisis" has two characters — one means danger, while the other represents opportunity.
This article will examine the hurdles and how semiconductor companies can turn them into opportunities by leveraging their advanced technologies to ride the software-defined electrification wave.
Top challenges faced by the semiconductor industry
While revenue reached $595.7 billion in 2022, the number doesn’t tell the whole story. The semiconductor market was on a downward trend for all four quarters in 2022, with a 9% drop in Q4. Coupled with economic uncertainty and global political tension, many buyers are reigning in their budgets. As a result, semiconductor revenue is forecast to fall 8% year-on-year.
The price of critical components has dropped during the second half of 2022, and the price erosion will likely affect other semiconductor product categories in 2023. The declining revenue also coincides with a drop in capital expenditure (CapEx), which could slow down investment in R&D and manufacturing capabilities.
Meanwhile, more semiconductor companies are diversifying their business models to incorporate data and services, which are more scalable than products and materials, to move up the strategic stack and add value. Chips are tailored to highly-specialized applications, and semiconductor companies must have the expertise to incorporate data services.
While this shift represents tremendous growth potential, companies that lack highly efficient and cohesive software ecosystems will struggle. Those that can make their chips translate insights into action in real-time will take the crown — but turning this vision into reality will require deep expertise in multiple fields, from hardware and software to telecommunication and data security.
How software-defined electrification opens new opportunities for semiconductor manufacturers
To overcome the above challenges, semiconductor companies must explore new revenue streams through applications that have yet to exist. They can do so by partnering with businesses that already have done R&D in these areas so they don’t need to invest the capital while accelerating the time to market.
But which areas will really move the needle? For that answer, we should look at how semiconductor occupies the unique position that ties software, hardware, data, security, and edge computing together in the context of the latest trends — one of which is electrification in virtually any sector, from aerospace and defense to industrial and medical.
This convergence is where Tanktwo's technology comes in. The Tanktwo Battery Operating System (TBOS) incorporates leading-edge and trailing-edge semiconductor technologies, plus specialized parts using the newest developments in Gallium Nitride (GaN).
Our solution combines “large-feature,” trailing-edge semiconductors (e.g., microcontrollers, memory, power management parts, and communications devices) with leading-edge single-digit nanometer technology, which can support lightning-fast analytics capabilities with minimal power consumption.
But the biggest semiconductor technology differentiator is GaN. The new wide-bandgap material is the foundation of our Dycromax™️ architecture, which makes our battery system perform in ways that were not possible before (e.g., configurable output, charging from any voltage, bypassing failed cells, etc.) to push the boundary in battery technology.
These new capabilities have opened up opportunities for applications in areas where semiconductors were not even in the picture in the past to allow companies to create new revenue streams.
Maximize asset lifetime value with a software architecture
Tanktwo’s ultra-high reliability and performance battery technology has been put through the wringer by a primary defense contractor (and passed with flying colors).
For example, our technology can push battery cells beyond their physical limits to achieve a performance level beyond any other battery technologies. We can make a battery pack produce 120% of its capacity in a fighter jet at the expense of 50% of its lifespan — but the tradeoff is more than worthwhile in a life-or-death situation.
But reliability and performance are just two of the multiple characteristics our customers can command. TBOS can maximize commercial performance by using advanced analytics and algorithms to adjust the behaviors of an expansive asset (i.e., battery) to help capital-intensive industries maximize its lifecycle value.
Unlike high-stakes applications, lifetime value is a balance between lifespan and performance in commercial solutions. For instance, if a commercial EV fleet manager wants to optimize for maximum lifetime value, they can set a conservative regimen (i.e., implementing a speed limit) to squeeze all the capacity out of every cell.
To achieve such real-time, advanced optimization, we use the latest semiconductor technology to turn insights and decisions into action by enabling granular control over battery behaviors to satisfy any performance requirements — whether they’re financial or technical — in any sector.
Introduce “secure enclave” principles to physical assets
In a world where billions of dollars are spent on cybersecurity, it is surprising that these principles have not been deployed at scale for managing valuable devices. Yet, in practice, only Apple uses its Secure Enclave to apply cybersecurity concepts to manage physical assets.
Advanced semiconductor technologies can bridge physical assets and the use of software to control their behaviors. TBOS already offers built-in security features that apply sophisticated cybersecurity principles and device protection technologies to batteries — a proof of concept with profound implications for managing other connected high-value assets.
For example, we can make a battery function only in the hands of a legitimate user. This capability can support a new economy of mobile energy-as-a-service (EaaS) and innovative energy storage ecosystems.
The next-generation semiconductor products will become the linchpin that turns the concept into reality. A partner/manufacturer that can create this nucleus for the secure enclave to enable watertight digital management of high-value physical assets will unlock the vast potential in electrification and many other applications.
As we can see in the development of various industries over the decades, security and optimization is the turning point where most sectors hockey-stick their growth. Being at the center of this core technology is a trillion-dollar opportunity ripe for the picking.
Tap into Chip Act funding with multiple edges
Thanks to our technology relevance in the defense and aerospace industries, collaborating with Tanktwo will help our partner create the perfect opportunity to take advantage of government support by extending the value proposition beyond reducing dependency on China on the commercial front. Our products will also offer various geopolitical and strategic benefits.
Security is a massive category enabler. But the technology is only secure if you can make it domestically with complete control over the supply chain — an excellent reason to build a US-based chip factory.
Software-defined batteries, enabled by advanced semiconductor technologies, can create a new class of electrified aerospace and defense equipment with no equivalent in the current global market.
The exclusive electrification technology will give us competitive advantages not only in the aerospace and defense sectors but also from a geopolitical perspective.
The perfect storm at the crossroad of electrification and semiconductor technology
A partnership with Tanktwo will allow a key semiconductor player to tap into our cutting-edge software-defined architecture and algorithms to complete the picture for its next stage of massive expansion:
Win substantial government engagement with the technology’s national security potential.
Implement cybersecurity features in optimizing physical assets.
Tap into the demands for advanced energy storage and power-as-a-service solutions.
Drive profitability in the aerospace and defense sector.
We have laid down a canvas of vast opportunities for a semiconductor partner to deploy multiple profitable concepts by leveraging best-in-class technologies in entirely new categories and unlock exponential growth in the high-tech sector. It’s time to join the party.
