In my inaugural blog last year, I reflected on the Renesas Renaissance in terms of how our long-term growth strategy is positioning the company as a full-spectrum, global technology solutions provider with an extended physical footprint in the U.S., Europe and China. Thanks to the acquisitions of Intersil, IDT, Dialog Semiconductor, and Celeno we now have expansive design capabilities that surround our market-leading embedded processor expertise with four core analog and mixed-signal competencies: sensors and sensor signal conditioning, connectivity, actuation and power management.
In each case, these companies and their engineers and scientists are contributing significantly to our key growth objectives, with overall revenue increasing at a CAGR of 17.7% between 2019 and 2021 and operating margin growing 16.9% over the same period. Perhaps most telling is the fact that, between 2020 and 2022, our infrastructure and industrial businesses grew by 33% and 37%, respectively, while our internet of things (IoT) segment saw an astounding 79% jump (37% organically) in CAGR.
That the industrial IoT (IIoT) marketplace is expanding at such a torrid pace is not surprising. For Renesas it signals an opportunity to accelerate adoption among our customers and ecosystem partners by enabling the convergence of three key technology areas that are maturing at roughly the same time: IoT, 5G connectivity and artificial intelligence (AI). We call this AI IoT, or AIoT, and the trend is driving a shift in how we collect, store, process, distribute, secure and power data in order to turn it into actionable intelligence we can learn from.
Such a sea change entails a move away from centralized, cloud-based architectures to distributed, edge-based designs that use tiny machine learning (ML) nodes like MCUs and MPUs to define the endpoint, accelerate mathematical models and improve the performance of deep neural networks.
While many people might associate AI with futuristic consumer applications like robotic assistants, the fact is that much of the initial impact will be felt in the industrial space where when IoT endpoint node creation is exploding at an 85% CAGR (2017-2025), yielding an almost unfathomable 73 zetabytes of data, according to IDC. From an applications perspective, these growth lines will open new markets and revenue channels in areas such as predictive maintenance, rapid defect detection, biometric recognition and asset tracking to name just a few.
That’s what led us to one of our most recent and significant 2022 acquisitions – Reality AI. The company is especially strong in developing algorithms for the industrial space, which is helping to fulfill our long-term vision of combining advanced signal processing and mathematical modeling with AI to build machine learning models that we can implement on our embedded processors – from 16 to 64 bits.
The Reality AI acquisition is an important component of realizing our AIoT vision, which this year also included investments in companies like Syntiant and Arduino that are extending our reach into more complex use cases, as well as a platinum sponsorship with the Tiny ML Consortium.
For Renesas, those strategic investments are part of a long-term, three-pronged approach to enabling AIoT, which includes access to world-class MCU and MPU devices and a commitment to the broader AIoT ecosystem, where we have more than 200 technology partners. Together with 5G and other forms of wireless connectivity, such as WiFi 6/6E/7 and near-field communications (NFC), we are enabling a fully distributed AIoT network that will revolutionize how the industrial workplace is managed by bringing constant, on-device learning and decision making to the factory floor.
Find information on products and technologies to help you implement AI solutions at renesas.com/AI.