MEMS drive supply chain changes with new applications

September 22, 2011 — MEMS devices are proliferating in new applications and replacing existing technologies, or used as a way to combine functions, says Yole Développement in its latest "Status of the MEMS Industry." This growth is driving new industry partnerships and a structural change to the MEMS industrial supply chain.

Expect a 15% CAGR 2010-2016 in MEMS revenues, and 24% CAGR in units shipped, said Dr. Eric Mounier, Yole Développement. The MEMS market hit $8.7 billion in 2010, shipping 4.3 billion devices. By 2016, these numbers will reach $19.6 billion and 15.8 billion units.

The consumer market is still driving the lion’s share of consumption (46% of the total market in value), Mounier added.

MEMS supply chain

The MEMS business is maturing, moving from a highly fragmented industry to a few large suppliers: 21 players above $100M in sales in 2010. The big players get bigger (e.g. Bosch, ST, Panasonic) as they capitalize on economies of scale. Smaller players are having a hard time competing, but there is still room for specialized companies. "AKM, Knowles, TI and Inkjet companies make a decent business with only one product. Because the business is maturing, others can specialize in one part of the supply chain," explained Laurent Robin, Yole Développement.

Also read: MEMS "transition period" toward market maturity evident in mobile boom

Most of the top 30 MEMS companies are integrated manufacturing companies; an increasing number of those big companies now offer foundry services. Others are becoming fab-light, outsourcing consumer devices or specific parts of the process. Only 2 fabless companies are among the top 20 MEMS companies (Knowles and InvenSense) while many fab-light companies are present (HP, Freescale, AD, Lexmark, Infineon, VTI). Fabless companies in growth stages now could become players in the near future.

In the coming years, players involved in high-value and automotive markets will likely keep their internal fabs; existing consumer-market players will easily outsource production; and consumer players with internal fabs will have to drastically increase their market shares to survive and support the infrastructure costs.

MEMS foundries will have to reach a critical volume to be stable — developing new device offers or selling to additional customers. MEMS foundries born of the semiconductor industry will only target high-volume applications where the number of processes is limited.

MEMS applications

MEMS devices can be replacements (e.g. microphones); new (e.g. micro-mirror, RF MEMS tunable antenna); or combination of functions (e.g. IMUs). New partnerships are necessary in the MEMS industry as functionalities develop.

Structural changes of the industrial supply chain are occurring as fragmentation continues. New intermediate business models are cropping up between MEMS foundries and IDMs: some IDMs specialize in producing MEMS wafers with their own design; some MEMS foundries are developing product platforms with their own design as well. Multi-chip module (MCM), which began in the MEMS industry with inertial modules, add challenges with integration, software and supply chain decisions. These combo sensors will represent a large slice of the MEMS market in 2016, integrated into gaming, cellphone, tablet, and PMP apps.

In the microphone business, some players are processing wafers while others are focusing on packaging and selling the device. Infineon has turned into a microphone die supplier and works with Asian MEMS microphone players: AAC Acoustics, Hosiden, BSE, Goertek, etc. Other companies are trying to become microphone manufacturers instead of just foundries, like MEMSTech and Omron.

For bolometers, camera cores (module with detector) are increasingly becoming a key business for camera manufacturers (FLIR and DRS propose new cores in 2011). This will further facilitate infrared detector integration and adoption by new camera players.

Yole Développement’s annual "Status of the MEMS Industry" was overhauled this year for the 2011 edition on MEMS device markets, key player strategies, key industry changes and trends including foundries business evolution. It also includes MEMS equipment forecast and major MEMS manufacturing evolutions.

Status of the MEMS Industry report (MIS) authors:
Dr. Eric Mounier has a PhD in microelectronics from the INPG in Grenoble. He previously worked at CEA LETI R&D lab in Grenoble, France in Marketing dept. Since 1998 he is a co-founder of Yole Developpement, a market research company based in France. At Yole Developpement, Dr. Eric Mounier is in charge of market analysis for MEMS, equipment & material. He is Chief Editor of Micronews, and MEMS’Trends magazines (Magazine on MEMS Technologies & Markets).

Laurent Robin is in charge of the MEMS & Sensors market research at Yole Developpement. He previously worked at image sensor company e2v Technologies (Grenoble, France) and at EM Microelectronics (Switzerland). He holds a Physics Engineering degree from the National Institute of Applied Sciences in Toulouse. He was also granted a Master Degree in Technology & Innovation Management from EM Lyon Business School, France.

Companies cited in the report:
3S Systems, AAC Acoustics, Advanced Micro Fab, AKM, Analog Devices (AD), Asia Pacific Microsystems (APM), Audiopixels, Avago, Boehringer Ingelheim, BSE, Canon, Colibrys, Dalsa, Deep Di Semiconductor, Denso, Domintech, DRS, ELMOS (SMI), FLIR, FormFactor, Freescale Semiconductor, FujiFilm Dimatix, GE Measurement & Controls, Gettop, Global Foundries, GMEMS, Goertek, Goodrich, Hewlett Packard , Honeywell, Hosiden, IMT, Infineon, Innoluce, Invensense, Jazz Semiconductor, Jyve, Kaiam, Kionix, Knowles, Lensvector, Lexmark, Melexis, Memscap, memsmart, memstech, MEMStim, Mezmeriz, Micralyne, MicroGen, Mikrosense, Mitsubishi Heavy Industries, Movea, Murata, NovioMEMS, Nuvoton Technology, Olympus, Omron, Opus Microsystems, Panasonic, poLight, Preciseley Microtechnology, Pyreos, QMT, Qualtre, Robert Bosch, Seiko Epson, Semefab, Senodia, Sensata, Sensonor Technologies, Silex Microsystems, Silicon Sensing Systems, Siltronix, SMIC, Sony, STMicroelectronics, SDI, Telecardia, Texas Instruments, Touch Microsystems (TMT), Tronics Microsystems, TSMC, Ulis, UMC, Veeco, Verreon, VTI Technologies, Xaar, XFAB, Yamaha, Yishay Sensor.

Yole Développement is a group of companies providing market research, technology analysis, strategy consulting, media in addition to finance services. Go to www.yole.fr.

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