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FUSE : Demonstrator Document

Application Experiment n°24683

FN Herstal

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0. Abstract descriptionFN Herstal Belgium designs, produces and sells light terrestrial weaponry. The company has1300 employees with 2 (one engineer and one technician) involved in electronics. Before theAE, the company’s experience in microelectronic was nearly non-existent.

FN has developed a new submachine gun, the P90, specially designed for the specialintervention squads, for elite troops and for brigade police. Currently this product representsaround 12% of the revenue of the FN Herstal. For a best use of the P90, it was necessary toreduce the rate of fire. The FUSE project has allowed this improvement by the introduction ofan electronic system based on a FPGA.

Mechanical solutions are more expensive and the reduction of the shooting pace is notsufficient. The electronics has allowed to improve the performances of the weapon and to addfunctions that did not exist. The project duration was 6 months with a budget of 49 kECU. Thepayback period of the project is estimated to 3 or 4 years, which is acceptable for this kind ofspecific market. The ratio between the extra turnover (due to the FPGA introduction) and theinvestment during the 10 years estimated lifetime of the new product is approximate 1/100.The ROI for the same period is estimated to approx. 144,88%.

The application experiment is of interest for companies that have a small department ofelectronics and that introduce electronics in one of their product for the first time.

1. Company name and addressFN Herstal s.a.Voie de Liège, 33B-4400, HerstalBelgiumPhone : +32 4 240 85 26Fax : +32 4 240 82 56Contact : M. Armand GeringE-mail : geringa@fnherstal.com

2. Company sizeThe company employs 1300 persons (1/10/97). Two employees are involved in electronics :an engineer and a technician.The turnover of the company is 110,947 kECU (4,5 billion BF).

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3. Company business descriptionFN Herstal is a Belgian company, of more than 100 years old, that once has acquired a world-wide reputation due to the quality of their products, the know how of their workers, thecleverness of their designers and the flexibility of their client services.

The FN Herstal covers the field of light terrestrial weaponry and law enforcement personnel.FN Herstal, designs, produces and sells light terrestrial weaponry.Their main clients are the countries of the European Union, the United State Army and theconventional countries from Asia and Ocean. Research and development represents 10% of theturnover, and the efforts made in favour of the introduction of electronics are close to 5%.

Description of FN Herstal products

FN Herstal develops and manufactures light weapons with calibre ranging from 5.7 to 12.7mm.

The products are comprised in 4 categories :- handguns (GP 9 mm, fiveseven 5.7, BDA9, etc.) ;- submachine guns (P90) ;- assault rifle (Fal, FNC, etc.) ;- machine guns, a category in which FN is the world-leader (Minimi, mag, point 50).

Other activities include :- engineering (ready-to-use production unit construction) ;- ammunition development and manufacturing ;- airborne weapon system ;- assistance to law enforcement programs.

4. Company markets and competitive position at the start of the AE

Company markets

Their main clients are the countries of the European Union, the United state of American Armyand the conventional countries from Asia and Ocean. The market is mainly export-orientated(95%). Clients are traditionally States, Home Ministries (police) or Defence Ministries(military). The elite troops and police brigades are using this submachine gun.

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Distribution of the marketby geographical sectors

Europe

USA+CanadaFar East

Africa

South America

Others

Company competitive position

1) Market characteristics of the P90

The number of submachine guns sold world-wide is currently estimated at about 100,000 units.FN Herstal sells about 2,000 units of the P90 per annum, which accounts for 2-3% of themarket. There is a great competition for this type of products, and no company seems to take asignificant lead, in terms of market shares.

- Market size : 100,000 units- FN Herstal market share : 2 to 3%- Nature of the market : small competitors (USA, UK, France, Israel, ..) no leader- Targeted clients : police, task forces, army.

Submachine Guns 1997

FN Sales

Others

2) Details on competitor products

Competitor products are traditionally 9 mm submachine guns, with 30 shot magazine, arepetition rate of 900 to 1,500 shots per minute. FN Herstal, with the P90, has already achieveda technological evolution by changing the calibre (performance improvement and increase inthe number of available shots). Competitors of the P90 have the same disadvantage (specific toall submachine guns). These guns have high repetition rates and are difficult to control.

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3) Changes brought to distinguish the product

Improvements to introduce in the P90 :- decrease of the repetition rates ;- stabilisation of repetition rates at 1 shot/minute ;- possible tuning of repetition rates ;- limitation of the number of shots ;- future potentials improvement.

4) Causes of the sales stagnation

The sales of the P90 before the integration of electronics were lower than expected. The mainreason is that the innovations already introduced (new calibre, plastic outer structure...) did notmake the product significantly different from its competitors. There is no reason to change to adifferent submachine gun if the efficiency factor is not strongly increased.The exiting mechanical technology has reached a limit for the P90 product that the introductionof microelectronics could. The customers do not believe that the integration of electronics inguns will be reliable enough.

5. Description of the product to be improvedThe P90 is an automatic machine gun used during law or peace enforcement missions. It has afixed repetition rate of 900 shots per minute. The 60ms between two consecutive bullets is setby mechanical system and cannot be further reduced by mechanical methods.

The guns must fulfil NATO requirements and operate under extreme conditions (attemperatures of -60° C up to +60°C, in snow, sand,...). One part of the gun needs to bereplaced at around every 20,000 bullets which corresponds to 1 to 2 weeks.

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Technical purpose ValueCalibre 5,7x28mmOperating principle Blowback operated

Closed breech firingType of fire Semi-automatic and full automaticRepetition Rate 900 rpmFeed system Magazine placed horizontally above barrelWeight W/O magazine With empty mag With loaded mag

2540 kg (5,6 Lbs)2680 kg (5,9 Lds)3kg (6,6 Lds)

Length 500 mm (19,7 in)Height 210 mm (8,25 in)Width 55 mm (2,2 in)Barrel Length Rifle length Grooves Twist and direction

263 mm (10,35") bore + chamber230 mm8231 mm (9") right hand

Magazine 50 roundsType of sight Optical reflex sight without magnification + emergency iron

sightsBallistics

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Muzzle velocityEffective rangeLethal rangeMax range

15 m/s150 m300 m1790 m

Safety Manual safetySafety sear holds hammer until chamber closed

General purpose CompactLightClosed firing for accuracyLow recoilOptical sightDownward ejectionAmbidextrousAccurate

6. Description of the product improvements

6.1 Improvements of the P90

Technical improvements

We are trying to diminish the shooting rate, that is always too high in this type of weapon (900shots per minute). Actually, a high rate of fire reduces the lifetime of the gun and reduce theaccuracy of the shot.

Moreover, this shooting rate has the drawback to impose a high consumption of cartridges. Afull automatic fire of 3 seconds represents 45 cartridges at 900 rpm and only 12 at 240. If therate of fire is reduced, both the consumption of cartridges and the weight of the gun willdecrease.

The arms world has faced this problem for a long time now, and the mechanical solutions thathave been proposed until now have never been satisfactory because they are very expensive,too fragile and above all not very efficient.

Concerning the utilisation by the low enforcement, this shooting speed reduction is also asecurity factor when used in a civil context.

Commercial improvements

The sales of the P90 stagnate at the same value than the competitors. This submachine gun isdesigned for missions of law or peace enforcement. In such conditions, accuracy is a majorasset. The P90, although innovative in certain ways, does not constitute a clear improvement of

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the pace, compared to its competitors on the market. Therefore, there is no particular interest init. We made a survey that shows that the clients are ready to replace their present material onlyif a real improvement of security and accuracy exists.

All the improvements considered will induce an increase of the turnover by reducing the pricesbut by improving the performance or by adding functions that do not exist at the present time.

The new product was designed to enable the user to have up to 4 repetition rates. These ratesfactory set by programming the FPGA.

6.2 Functional specification of the component to be designed

The objective is to periodically release a trigger at the frequency corresponding to the desiredrepetition rate. To do so, one only has to command an electromagnet. The circuit has tomanage repetition rate and control the portable power supply, to control the actuator and togenerate the impulses.

Ø Management and control of the portable power supply :- conversion of the voltage ;- control and warning of the discharge of the battery.

Ø Control of the actuator :- imposed repetition rate ;- type of selected shoot ;- decision to shoot.

Ø Generation of impulses :- check of the power supply conditions ;- generation of impulses ;- control of the movement of the actuator.

The FPGA used for the prototyping 4003PC84-6 by Xilinx. It includes approximately 3500gates. The rate of CLBs used is 96%.The Xilinx has been chosen for several reasons :

- Xilinx is easy to develop because it is a SRAM re-programmable device.Furthermore, its real time reprogramming has a didactic role for the FU company ;

- In the production phase, the company will use the hardwired version of the FPGA XC4000, which is really secure.

Unfortunately, the block diagram of this FPGA must stay confidential and won’t be shown inthis document.

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7. Choices and rationale for selected technologies, tools andmethodologiesThree solutions are conceivable :

7.1 The solution using a microcontroller

The main advantage of this solution is to be the cheapest for the moment.

The microcontroller disadvantages are the following :- some functions of the design impose very short reaction time. If the company wants

to use a microcontroller for this application, the FU should add a PLD device in orderto speed up those functions. The presence of 2 components instead of 1 weakened thesystem security even if the microcontroller is masked or OLP ;

- this solution limits the evolution of the functionalities of the circuit.

7.2 The FPGA solution

The advantages of this solution are :- the prices of FPGAs are rapidly decreasing. The little models will soon be sold for

less than 5$ ;- the large calculation capacity of an FPGA ;- the rapid reaction of an FPGA ;- the reduction of the components used reduces the risk of stock ;

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- the possibility to take into account the evolution of the functionalities of theapplication. (some FPGAs can contain a large number of equivalent gates) ;

- this solution is more flexible than the ASIC solution in terms of validation of thespecifications ;

- this solution represents an easy springboard towards the ASIC because thefunctionalities of a FPGA can be described in a VHDL language ;

- the production and prototyping are very quick.

The disadvantages are :- the price of the FPGA needed remain very high for big circuits ;- it is impossible to integrate the analogical part of the application.

7.3 The ASIC solution

The advantages of this solution are :- Protection against copy is guaranteed ;- The circuit can easily integrate numerical and analogical functionalities.

The disadvantages are :- The development and prototyping costs are relatively high ;- The production has to be planned well in advance ;- The prototyping is slow and two runs are often necessary ;- A new run is necessary to take into account the evolution of the functionalities.

The company chose to develop an FPGA and to specify the application in VHDL language.

FN Herstal hopes that the sales of the P90 increase rapidly and thus, the volume of productionwill be sufficient to develop an ASIC. But the sales production remain hypothetical and then itwould be risky to invest the first time in the design of an ASIC.

The description in VHDL for an FPGA is perfectly adjusted to this kind of design. Indeed,there will perhaps be change in the design in the few next years. The introduction ofmicroelectronics in a light weapon is recent and is thus a new experience for the company. Thefirst specifications could be inappropriate for the application.

Once the specifications are fixed, the transition from FPGA to ASIC would be achievedwithout any major difficulties : the transition from FPGA to ASIC is relatively simple for adesign like this one.Whether on the technical or economic point of view, the FPGA seems to be the most suitablecomponent for this project.

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8. Expertise and experience of the company in microelectronicsMore than a year ago, the company realised that the market was asking for a moresophisticated product that would better suit the new role of conventional armies, whereinterposition and peace enforcement have taken over the rest.

In this framework, the integration of electronics is necessary to achieve functions that aremechanically unachievable or to replace mechanical functions in order to reduce theproduction cost.

FN Herstal is highly sophisticated in mechanical and chemical (i.e. explosion) design,especially for high temperatures and high pressure.

During this Application Experiment, an electronics engineer was hired. Firstly, he learned thearms techniques, realised the requirements linked to the conditions of use and made feasibilitystudies of integration (power supply, connection, control and security). FN Herstal was notintegrating electronics in their weapons. Some electronics were used in accessories liketelemetry of cliniometry. FN Herstal had no experience in FPGA nor PCB design.

Its position as world leader for the majority of its products, its knowledge of the market allowthe company to state that neither within the European Union, nor elsewhere, similar productsuse the completely integrated electronic technology. This may seem surprising if one is notaware of the conservative character of users.

However, the missions evolving towards peace and law enforcement, the demands of a realevolution of performances are more and more clear and the company rank will only bemaintained if it is the first to answer them.

9. Workplan and rationaleThe work plan was divided into 4 phases :

9.1 Specifications phase

FN Herstal, although mastering its project, had to draft some specifications listing all therequirements for the new weapon. It was important that these specifications included thenecessary information regarding the product mechanisms in order to facilitate the electronic-mechanical interface. It had been assessed that, considering the studies already carried out, aFN HERSTAL engineer could gather all the requested information within a week.

Then, these specifications were submitted to a designer who could, together with an FNHERSTAL engineer, made the necessary adjustments to the first requirements. This work wasachieved in one week.

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A comparative study between the different trademarks proposed by the suppliers was essential.We could consider a first set of performance tests of the used products. Considering the supplydifficulties, this period spread over a month.

During the same period, a FN Herstal engineer studied more deeply the mechanical problemslikely to be faced. He made several tests allowing the facilitation of the integration ofelectronics.

9.2 Training phase

This step took place throughout the project. It was necessary for all those that were concernedin one way or another with the new weapon. These persons can be divided into 3 distinctivegroups.

1. The sales and marketing personnelFor this category, a training of more or less 2 days per person was necessary. The aim ofthis training was not to transform these persons into electronics engineers. It was simplyimportant to give them an overview of electronics and its evolution. Then, we had tohighlight the advantages of the technology used and explain to them the technical andeconomic advantages of the integration of these new technologies. This training wasprovided during the project.

2. The technicians and the workers involved in projectFor this category, a training of more or less two days was also necessary. This trainingintended to explain, the how’s and why’s of integration. Indeed, some of them had tomanipulate this technology during the assembly of the pieces of the weapon. This trainingwas also provided at the end of the project, that is to say before the implementation of themass production.

3. One or two R&D engineers from FN HerstalAs far as they are concerned, these persons were more involved in the design itself. Indeed,it was considered useful that, at the end of this project, an engineer could use theprogramming software of the FPGA. Moreover, it was beneficial for him to be familiarwith the VHDL language. To achieve this, the engineer had received an electronics-driventraining. We started with a brief reminder of the basics of microelectronics. Then, for aperiod of 15 days full time, it was possible to train him to the high-level language, as wellas to the design software that we use. This allowed him to follow the project more easily.

9.3 Design phase

This phase was the most delicate phase.

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4 weeks full time were dedicated to the drafting of a code in VHDL that would give goodresults in simulation and software tests. To achieve this, a tight collaboration was necessarybetween the subcontractor’s designer and the engineer of FN Herstal.1 week was enough for the transfer of the programme on FPGA. Some functional tests hadalready been made (output responses with specific stimuli at the input).

5 to 6 weeks were necessary to integrate the electronics to the surrounding system. Indeed, aseries of real tests were led to bring several modifications. This period, often longer, was oftenthe most delicate.

9.4 Test phase

The electromagnetic compatibility tests lasted 6 weeks dating from the successful completionof operational testing. Please note that a training in EMC for the FN Herstal engineer is not tobe neglected.

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This workplan can be summarise in the following pert chart :

Task / Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21FN Herstal specification

Designer & FN Herstal specification

Comparative study

Phase 1 :Specification

Electronic & mechanical study

Staff trainingPhase 2 :Training VHDL & FPGA training

VHDL programming & simulation

FPGA programming

Design of the PCB

Tests of the PCB

Phase 3 :Design

Electromechanical integration

Phase 4 : Test Test in real situation

Legend : FN Herstal electronics engineerSubcontractor’s designerFN Herstal technicianFN Herstal electronics engineer & subcontractor’s designerFN Herstal electronics engineer & technicianEverybody

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10. Subcontractor informationARAMIS was chosen as subcontractor first for its fifteen years experience in developingelectronic components (analogue, digital and mixed ASIC or FPGA) in collaboration withSMEs and secondly for the strong links between the University of Liège and FN Herstal.

ARAMIS is actually the acronym of "Association pour la Recherche Avancée enMicroélectronique et Intégration de Systèmes". This inter–university association, created in1983, gathers the Microelectronics departments of four Frenchspeaking universities inBelgium, i.e. Université Libre de Bruxelles (ULB), Université de Liège (ULg), UniversitéCatholique de Louvain–la–Neuve (UCL) and Faculté Polytechnique de Mons (FPMs).

ARAMIS has at its disposal professional hardware and software on all four university sites.The association is able to supply a complete and efficient help to SMEs in the making of a firstASIC or FPGA. It supplies a complete service, from the drafting of the specification of the rulebook to the testing of the prototypes.This help is supplied as a complement to the services of various design companies, who remainthe natural partners if the problems to be tackled and the specifications are well–defined.

ARAMIS was greatly committed in the experience. The AE was monitored by technical,administrative, and financial meetings.

10.1 Technical assistance

The main focus was the design-related support to help the FU in the FPGA design process.After a meeting aimed at establishing a choice of tools, the VSS software was used for VHDLsimulation, Synopsys for synthesis and Xact for FPGA programming.

This monitoring also allowed to discuss with FU about different CAD tools available to designFPGA Xilinx (advantage and drawbacks) and namely to co-ordinate different devicessuppliers.

The TTN and its competent staff, made up not only of academics specialising in thesetechniques, but also of engineers with considerable professional experience in this field, havesuccessfully participated in the various parallel actions performed to ensure the successfulcompletion of the project.

10.2 Administrative Assistance

Many meetings were organised for the monitoring of the application experiment. Thesemeetings took place on April, May, June, July, August and September 1997. In addition tothose visits, we have often been in touch over the phone in general to solve or try to solveFUSE administrative problems (drafting the MR, changes in the guidelines).

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During the Experiment, many social problems arose in FN Herstal. They did not influence theundergoing project negatively, but additional efforts had to be made by ARAMIS in order toco-ordinate meetings (choosing the place of the meeting...) and to make sure reports werereceived in due time. ARAMIS therefore helped the FU to draft the Demonstrator Document.

10.3 Financial Assistance

ARAMIS organised meetings in order to help the FN Herstal to filling in the Cost of statement.It is to be noticed that the FN Herstal engineer has benefited from the hardware and softwarestructures of ARAMIS during the experiment.

10.4 Conclusion

Thanks to a good relationship, the Design and the Application Experiment was a success forFN Herstal as First User of FPGA technology. Since the improved product operated perfectly,FN Herstal decided to integrate microelectronics in their other products as well.

11. Barriers perceived by the company in the first use of the AEtechnology

11.1 Knowledge barriers

The first thing to learn was certainly that a company such as the FN Herstal, with a past and apresent oriented to precision machinery, really needed a technological improvement to surviveon the market.

Secondly, FN Herstal had to face its lack of knowledge concerning the existing technologies inorder to be able to make choices suited to the application requirements.

A third important barrier appeared when electronic parts and the power feeding was integratedinto the product, still taking into account the operational requirements of the global system.Finally, the project team was managed by somebody who had no experience at all concerningthe management of electronic projects.

11.2 Psychological barriers

As already said, the FN Herstal is a one century old company and the reluctance to change isimportant particularly if the current competencies can disappear against ones specialised inmicroelectronics. The FN Herstal is oriented to precision machinery. The reluctance to changewas important and particularly enhanced due to the fact that the team manager didn't had noexperience at all concerning the management of electronic projects.

Most people in the company, being so reluctant, the communication between the differentteams involved in the project, has to be well adapted. But it has to be underlined that the FN

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Herstal really needed microelectronics and technological improvements to survive and grow upon the market.

Moreover, the market was against the use of electronics in such a classical mechanical product.There is a disbelieve that a product with a new technology can be reliable under severeconditions.

11.3 Financial barriers

The lack of knowledge concerning the estimation of the costs of the design, the manufacturingand the maintenance were one of the most important barriers that FN Herstal had to face.

11.4 Technological barriers

The poor experience in the microelectronics field brought difficulties to specify the needs(what should be the costs to add for example a cadence regulation function at the final userlevel ?).The company hadn't designed enough capabilities to do it completely by itself without anyexternal help.The test method is really different in electronics compared to precision mechanics.

The commercial life of the company products is quite long (more than 20 years). So, thecomponents obsolescence is something that has to be considered from the beginning of thedevelopment.

11.5 Commercial barriers

The traditional use of a gun is rather “rough” :- abrupt manipulation (sometimes even the foot is used, in order to unjam a part) ;- severe conditions (humidity, temperature) ;- shocks due to the shooting.

The infantryman uses his gun for everything - to step out of a truck, as a lever, as a shovel. It istherefore only natural that he is extremely concerned about the reliability of the electronicequipment, when it is submitted to such a rough treatment. Moreover, if the gun requiresparticular a care, it may become a “burden”.

12. Steps taken to overcome barriers and arrive at an improvedproductThe method for designing a new product is rather classical, since it includes the usual threedesign phases.

In short, this method used for 10 years summarised as follows : (objective and average times)

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Development : 2 yearsDesign : 2 yearsIndustrialisation : 1 year

The partial overlapping of the phases (especially design and industrialisation) enables tointroduce as early as possible in the process the constraints linked to manufacturing. Forexample, the advent of new materials (plastic, FMP ...) imposed to design parts in a verydifferent way.

Due to the inertia of the market, the quality of the products, and their weak use the company,their commercial lifetime is around 20 years.So, we still sells machine guns that were conceived before the war, although they have beenslightly modernised. The gap between the design times of our products and the ones of sub-systems including electronics is per se a problem to be solved. Moreover, the longevity of ourproducts will certainly imply upgrades of the sub-systems, since the latter are composed ofparts the lifetime of which is much shorter (choice regarding storage or redevelopment).

12.1 During feasibility study stage and preparation of the FUSE proposal

All the knowledge barriers were not overcome during preliminary steps because it required atoo important investment. The project leader attended several meeting and got informationfrom ARAMIS. So, he was able to convince his hierarchical staff about the advantages anddrawbacks that appear while using specific microelectronics technologies. This allowed tomake a first choice and to fill in the FUSE submission knowing exactly what we were doing.

The psychological barriers impact was also considerably reduced from the beginning thanksmainly to the suppressing of some ignorance’s.

The financial risks are still considered and were compared to calculate benefits prevision. Thispotential economical impact relies on a market study that was realised by the FN Herstalmarketing department and is based on a considerable increase of the product performances andthe removal of some current defaults.

The skills and the experience of ARAMIS to manage this kind of project was also veryprecious.

12.2 During implementation

The main help to remove the barriers was without any doubt the training given by ARAMISabout the design and test methodologies, the flows and the management of microelectronicsprojects.

FN Herstal produced a video showing the trials from the “ old ” and the “ new ” product toinform users and employees of the benefits of using microelectronics.

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The gun was designed in a way that the user does not need to know that electronic componentsare included in it, a simple switch is all the sees.

The first user obtained sound advice, training, and design assistance throughout. The result wasthat the product was designed right first time and the first user obtained the necessary technicalknowledge.

13. Knowledge and experience acquiredKnowledge and experience acquired in four main fields

13.1 Development and design

It is here mostly an operational knowledge because we took part in the development and in theconception processes through ARAMIS’ work.

- functional description with VHDL language- prototyping in micro-controlled technology- testability- programming FPGA- final checking

13.2 Making process

The type of experience was here less deeply studied because we will never become designersbut only sufficiently experienced to communicate which subcontractors. That is the way thisexperience went and we learnt a lot "on-the-job".

13.3 Knowing of potentials, technological waking

We are all glad to have gained the necessary background to go on in other microelectronicsprojects, are able to keep right up-to-date of the technology. Thanks to FUSE, we realise aprocedure of technological waking, in particular by maintaining a network of contacts, byattending meetings and conferences and by the subscribing to specialised magazines.

13.4 Administration of electronic projects

We have assimilated and even lived the experience of the technical administration of a projectwith high level of electronic.We are now able to repeat the process, being sure that we have already succeeded in doing itonce. We are now able to have a real control of delays and costs all through the project, fromits birth to its commercialisation.

14. Lessons learnedThings don't always go as quick as we may think. The company has to take longer delays intoaccount, in particular for the conception part of the job.

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When FN Herstal realised how flexible the technology could be and the number of possibilitiesit gave, they changed some specifications that they considered too strict at the beginning. Forexample, the possibility for the user to change the cadence (rhythm) and the use of a safertechnique for the power supply monitoring.

These changes were easy because we have described the system in VHDL language.

We had some understanding problems with the subcontractor. Difficulties of that kindappeared more seriously between the FN Herstal electronic team and the other researchlaboratories of the company who were not accustomed to electronic terms.

The lesson of this is that a minimum of training must be provided to the staff of the companyso that it can have the same basic background and the vocabulary in order to facilitate thediscussion and understand each other.

The main lesson for most people who worked on this project, is the assurance thatmicroelectronic is essential for the company to stay competitive and that future prospects canbe considered.

15. Resulting product, its industrialisation and internal replicationThe FU is now able to design electronics PCBs using FPGA technology. The FU possesses thesoftware tools for VHDL and FPGA and can do most of the FPGA design work.In addition the FU has now got confidence in using microelectronics in other products. Oncehaving overcome the initial barrier associated with microelectronics, the FU is confident that itwill use microelectronics for new functions (for example a gun that only works when it is usedby its owner). This is an important message to give to other potential FU with no electronicsexpertise.

It has to be mentioned that the weapons industrialisation is a very long process. We can dividethis process in 2 parts :a. The pre-industrialisation part in which the FU has to preview the mechanical modifications

due to the introduction of the FPGA. A testing of the weapon’s reactions will end thispart ;

b. The industrialisation / production part during which both the manufacturing process and100% of the manufactured products will be tested.

The FU will subcontract the assembly of the P90 microelectronics part whereas the finalassembly will be the responsibility of the company.

Most of the industrialisation costs will come from the mechanical modifications (i.e.modifications of the production equipment & processes, etc. ).

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16. Economic impact and improvement in competitive positionAs a preliminary, it is important to insist on the fact that the particular application on which FNHerstal introduces a request for subsidies is part of a staunch sales strategy in the activitysector. The strategy consists in checking the advantage of a new technology by first proposingthe first pilot batch of the new product to the elite troops and to special intervention squads,intrinsically more open to innovation. In this respect, the P90 designed for them is a model inthe genre. The quantities involved are low at the beginning. The experience will mainly beuseful in a nearby future, as soon as the market will be convinced.The synthetic analysis that follows only concerns the P90, but these figures could be applied toother products existing or that are developed at FN Herstal.For the moment, FN Herstal sells 2,000 units of P90 per year. It has low market shares (2-3%)given the large number of competitors for this type of product. By introducing electronics inthe P90, FN Herstal hopes to sell 20,000 units per year and to become leader by having morethan 20% of market shares. This optimism can be explained by the fact that it will be the onlycompany offering a product where the repetition rate will make the submachine guncontrollable and therefore efficient for missions aiming at interposition and peace enforcement.If we consider the results of a study about the increase of accuracy and security by reducing therepetition rate, it is reasonable to believe that the predictions of sale are likely to come true.

The increase of the sales can be expected thanks to the introduction of electronics in variousproducts.

It takes about 3 years for a prototype gun to be put on the market. The reason is that aqualification from NATO must be obtained and that also the industrialisation must be set up.The period to pay back the investment seems about 3 to 4 years. Such a payback period isacceptable for this type of very specific market.

P90 sales progression

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1997 2000 2003 2006

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0%

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Mons, le 12.04.1999 22 Réf : 98 244 F

In the view of competition, this can be called a revolutionary project. The competitors useelectronics in light weaponry, but the electronic components are not integrated in the weapon.Actually, those are mainly add-ons on an existing weapon. In the language of weaponry, it iscalled “Christmas tree”.The P90 will then be the only weapon on the market made of integrated electronics. It will thenbe the only effective weapon to show such resistance and ergonomics.

The lifetime of the new P90 is estimated to 10 years. Its average cost will be 560 ECU (22,500BF). After 10 years, FN Herstal estimates to have sold approx. 135,000 units of the newweapon (compared to 95,000 units of the old one). That leads to a ratio between the extraturnover and the investment of 1/100. If FN Herstal is to calculate the ROI at the end of theproduct lifetime, it is estimated to approx. 144,88%.

17. Target audience for dissemination throughout EuropeThe target audience consist of clearly non-electronic companies. This First User has a highlevel of management skills. However companies without this experience could still achieve areplication. In that case they may need additional help in project management.

It was the first time that the company was doing research with an external company.

1. Enterprise working in the same sector :Code : 29, 296

2. Subcontractors : Codes : 31, 321

3. SME located in the region :

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