Realtek Semiconductor:

Step inside Realtek Semiconductor in the Hsinchu Science Park and you will see crab emblems everywhere. The company’s “crab philosophy” goes like this: “A crab hugs the ground, reflecting a low-profile approach to R&D; its hard shell represents patience and resilience in harsh environments; its powerful claws lock onto promising markets and never let go; crabs travel in groups, embodying teamwork; and their sideways gait expresses the confidence to become a world leader.”

The crab philosophy means that once Realtek targets a market, it refuses to let go, continually cutting costs, reducing size, improving performance, and lowering power consumption to make its products more competitive. (courtesy of Realtek)

Getting a grip on the market

Known to employees as “President K,” Realtek President K.Y. Yen sees the spirit of the crab in the company’s relentless product iteration.

“Competition in the IC industry is already intense, and we compete in a global market that includes IC design industries in both the United States and China. You have to be very determined—you need a hard shell—to withstand that competition.” Yen emphasizes that once Realtek identifies a market, it does not readily give up. It does not just build for one generation of specifications; after each release, the company continues to review and refine its designs to cut costs, reduce size, improve performance, and lower power consumption.

Consider Wi-Fi chips. Realtek began R&D in 2000, but it was not until after 2010 that the business truly took off. Following the development of the IEEE 802.11n standard (which permitted Wi-Fi to support multiple antennas transmitting and receiving simultaneously), the team iterated through four generations of products under the same standard, integrating Wi-Fi into tiny, highly power-efficient products that could be embedded in more devices, thus rapidly expanding their market reach.

“People used to say it was impossible to integrate two power amplifiers (PAs) into the same chip because of the heat. But through iteration, we found a way and became the first vendor to produce such a highly integrated chip.” Yen says it was the same with Ethernet chips. As speeds moved from 100 megabits per second (Mbps) to the Gigabit Ethernet era (Gbps, or 1,000 Mbps), Realtek continually iterated to make its Ethernet chips smaller and more power-efficient, while also steadily layering in network-management functions, broadening the range of applications.

Realtek’s 39th-anniversary family day embodied the company’s crab philosophy of “moving as a group and working as one.” (courtesy of Realtek)

Realtek President K.Y. Yen says the company’s more than 2,000 product models can form the “nervous system of the digital world.”

Innovation in its DNA, “real expertise” in practice

Observers often marvel at Realtek’s more than 2,000 product models and over 10,000 patents. Both reflect the company’s commitment to technological self-reliance.

“Our English name, Realtek, stands for ‘real expertise,’” Yen says with a smile. Perhaps this is part of the company’s “DNA.” Many companies license off-the-shelf silicon intellectual property (IP) cores in the hope of getting products to market and making money quickly, but that is not a viable long-term strategy. To maintain firm control over its technologies, Realtek’s engineers begin by defining the architecture, then design and test it. Once they have a prototype, they discuss it with customers and refine it gradually, developing a feel for the market. Only as the technology matures can they deliver competitive products.

Realtek has captured industry-leading market shares in both the global PC Ethernet-chip market and the PC audio-chip market—evidence of the real expertise it has honed in the way just described.

To support its broad product portfolio, Realtek not only has R&D engineers assigned to each product line, it also has two central R&D centers—one focusing on analog and radio frequency circuits and another on System-on-Chip (SoC) technology—that serve as technical hubs, flexibly deploying cross-departmental IP to achieve efficient integration.

Golden rules of product development: “Big, fast, good, low, and more”

Facing the unforgiving test of global markets, President K.Y. Yen reveals Realtek’s five-point formula for expanding a product’s market: “big, fast, good, low, and more”:

Big: Market size and volume must be large enough.

Fast: Products must reach the market quickly enough.

Good: Performance and quality must be good enough.

Low: Costs and power consumption must be low.

More: Products must come with rich functionality and extensive technical support.

（left） An integrated Ethernet switch chip for the robotics market.

（right）Because Realtek develops its chips’ core IP and architectures based on in-house R&D, it can flexibly adopt semiconductor manufacturing processes to outperform competitors.

A decade in the making: Automotive chips and humanoid robots

This willingness to stay low and spend a decade honing its craft is nowhere more evident than in the development of automotive chips. Realtek first started working on automotive Ethernet in 2013. They were soon faced with a tightening of automotive reliability requirements for semiconductors from PPM (parts per million) to PPB (parts per billion). Yen specifically explains that previously, the market allowed a few defective units for every million sold. However, because cars sit outside exposed to the sun and rain, automotive chips must meet an incredibly high standard—only 200 defective units are permitted per billion.

Realtek dismantled and then rebuilt its entire quality-control and design systems from the ground up, implementing an IATF 16949 quality management system and functional-safety standards such as ISO 26262, while submitting to the exacting oversight of automakers. After lying low for nearly a decade, it began shipping in volume around 2020 and quickly vaulted into the ranks of major global suppliers of automotive chips.

Yen reveals, “R&D costs alone take up nearly 30% of revenue. We use profitable product lines to incubate new technologies and train our colleagues to develop a feel for technology development.”

The automotive “neural network” unexpectedly proved key to connecting the joints of humanoid robots.

Because humanoid robots need highly reliable, high-quality components to interact with people, major US and Chinese manufacturers have proactively incorporated Realtek’s automotive Ethernet, switch, USB hub, and Wi-Fi/Bluetooth chips into their robots. “A robot is like the human body. We do not make the brain, but we want to build its entire nervous system, carrying the brain’s commands to every joint and sending feedback back to the brain.”

Since getting its start with Christmas-light chips in 1987, Realtek has expanded from Ethernet and computer audio decoder chips into components for automotive applications, AI, and humanoid robots. Over nearly four decades, it has shown that when “real expertise” is maximized, even a tiny chip can take on the world. This low-profile, resilient Taiwanese crab will continue to move through the world’s neural networks, demonstrating the formidable strength of Taiwan’s technology.

“It is genuinely difficult to achieve all five,” Yen notes. After weighing the options, compromises must be made in certain areas, because a product is not made just once but continuously iterated. His words seem to echo the philosophy that enables the crab to take on the world.

Realtek pursues innovation through two central R&D centers that efficiently integrate research and development resources. From left: Senior Vice President Lin Ying-hsi, Vice President Huang Yee-wei, President K.Y. Yen, and Vice President Yeh Ta-hsun.