A chip off the old block - how a shift to software solutions brings industry-wide benefit

18/01/2023

A note for our trans-Atlantic readers: In English, chips mean fries. In American, chips mean crisps. Regardless of which one you end up envisioning throughout reading this, we hope the metaphor still stands.

What do we owe our competitors?

It's an interesting question to raise and it plays into a developing theme in our blogs, the concept of competitive collaboration. Individual companies (including us!) working together to progress the overall development of the industry. We've outlined more than once how we really believe this collaboration can help the broadcast market operate on a win-win basis. This industry benefit doesn't take any concerted effort on part of the industry players, just the right mind-set.

But what if it did take more? What if benefiting the industry required an extra effort on behalf of the individual players? Or even an element of sacrifice? In essence, what if it was easier to be selfish? In that case, could it ever be said there is a moral obligation for businesses to put the industry first, above their own private interests? It's such a fundamental question that as far back as 1904 universities such as Yale have been offering courses on Business Ethics to consider exactly that.

When the chips are down

In the present day, it's not just a hypothetical question, because there is a pressing issue facing the industry, and the extent to which the industry weathers the storm will be hugely contingent on the decisions they take collectively over the next year or two.

That issue relates to the shortage of semiconductors (chips) - not just in the broadcast industry, but across the (mother)board. A range of complex geo-political issues, combined with a variety of unprecedented events' and an increasing technological sophistication in consumer tech products (particularly vehicles), have all resulted in a woefully unhappy supply and demand curve.

The problem is significant enough that governments across the globe are getting involved in the situation; in the US, this takes the form of the CHIPS Act, which will see $52 billion worth of government subsidy combined with an additional 25% in tax credit for new manufacturing facilities. Similar plans are present in the EU, and both South Korean and Japanese governments are working directly with some of their major technology firms to ramp up production.

But this brings us back to the question we posed at the beginning: what can we as an industry do, and what obligation do we have?

The prisoner's dilemma

To answer that question, we need to engage in a quick bit of philosophy-maths.

You may be familiar with this one. It's a game where two starving prisoners have the potential to win themselves some bread. But there is only one loaf. The two prisoners are asked individually without the other hearing - whether they want to take the bread for themselves ( steal'), or if they want to share.

If they both steal, nobody will get any

If they both share, they will get to share the bread

If one says they want to steal the bread, and the other says they are willing to share, the one who said steal will get it.

What would you choose? It's such a compelling question that the BBC made a gameshow of it. But if you're vaguely familiar with game theory, you'll recognize that stealing is - statistically - always the better option. Selfishness pays off. So, in a zero sum game where a resource is limited and many competitors are looking to access it, the steal' strategy should - in theory - make the best business sense, even though it also carries with it the highest risk.

But what about when there are too many prisoners, and too many stealers? Will that mean no one gets anything? That's how we'd characterize the chip situation in the broadcast market now. Chip-hoarding selfishness will only hurt the industry in the long run; undermining complimentary and co-dependant entities, slowing down development, creating bottlenecks and ultimately hindering collective progress.

Thinking differently

For us then, the answer to the prisoner's dilemma - in the context of chips at least is to say you know what, I'll leave those chips for you, and I'll just go and use that huge pile of potatoes to make mashed potatoes instead'. It will take slightly longer, and a little more effort, but in the long run it will eliminate dependence on the whims of a capricious prison guard who likes to play mean games with food. Across the prison, everybody will end up better fed.

So that's what we've done at Sencore: we've learned to cook.

To drop the slightly odd analogy for a moment, what we mean is that we ve worked to reduce our dependence on semiconductors and instead created Centra: a software solution which can be located remotely in the cloud or through any on-site COTS hardware. By doing that, we ensure that our product remains ready to roll and weather any storm, whilst at the same time freeing up' chips for other manufacturers who - for whatever reason - are not able to lessen their own chip dependence.

More than one good reason to do the good thing

We should be completely up-front and honest though: this was not an entirely altruistic act, undertaken for the benefit of the industry as a whole. The simple truth is, there are a whole host of reasons why basing Centra on a software solution simply makes more sense - reasons which mean we'd have pursued a software-based solution regardless of the industry semiconductor situation. They include:

Reduced cost for our customers

Flexibility of operation from any remote location

Improved coordination from a centralised location

Greater agility for us as we develop and improve

Full scalability

Lower on-site footprint and weight in OB van applications

So, whilst the health, welfare and sustainability

LINK:	https://www.sencore.com/stronga-chip-off-the-old-block-how-a-shift-to-...
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