MEMS II: return of the fabs
Those that survived the shakeout are coming on strong
By David Forman
Industry executives and analysts agree: The MEMS fab sector is turning a corner. Fab customers are announcing new products. Tool suppliers are reporting new sales to the fabs. And the fabs themselves are citing strong, if not record, growth. But the recent surge in fab activity is not only the result of new market pull. It also reflects a coming to terms with the hard lessons learned in the crash of 2001 and 2002, and experts say it could help encourage the MEMS sector to adopt more standardized processes.
The fabs themselves cite an uptick in activity. “We have seen a general increase across all customer profiles the last six to nine months,” said Richard Carter, business development director for INEX.
A public-sector facility in the UK focused on the development and commercialization of MEMS and microsystems products, INEX recently completed an upgrade to 6-inch wafers in order to meet anticipated demand. In its case, says Carter, the defense industry generates the most market pull.
Others agree. “We are up 40 to 50 percent over last year,” said Bruce Alton, vice president of marketing and business development at Micralyne Inc. The Edmonton, Alberta, fab has also nearly doubled its staff, from 85 a year ago to 160 today. The optical components industry is generating the most new demand for Micralyne’s services, according to Alton.
Employees at Edmonton, Alberta-based Micralyne Inc. work in a MEMS cleanroom. The company has nearly doubled its staff in the past year. Photo courtesy of Micralyne
Investment has followed suit. The UK’s Department of Trade and Industry and Scottish Enterprise, an economic development agency, recently invested more than $26 million in a new MEMS manufacturing facility at Semefab, a Fife, Scotland-based fabrication services organization.
MEMS tool sales also have benefited from the trend. Surface Technology Systems plc, a Newport, Wales, maker of plasma processing technologies, recently announced an order worth more than $3.4 million from a major MEMS manufacturer for use in consumer products. The company said the order proves that major manufacturers are successfully using or selling devices for high volume applications such as automotive or consumer products. As a result of this and other sales, the company said its order book was at levels it hasn’t been since 2001.
MEMS industry analysts see signs of a rebound as well. “It’s an inflection point,” said Roger Grace of Roger Grace Associates.
It hasn’t always been this way. MEMS fabrication was hot in the late 1990s. Driven largely by overblown anticipation for telecom products, the fabs expanded rapidly and investors funded companies without adequate research into their prospects. Then the sector crashed when huge product sales failed to materialize.
The current market pull from various industries - defense, optical, consumer - would not have been sufficient to revive the sector if fabrication companies had not learned critical lessons in the last five years, Grace and others say. Among those lessons are: even though the MEMS and semiconductor industries share some processes, the economics of MEMS production and packaging are very different; the gap between prototyping a product in a lab and refining a real production process must be filled; and, market expectations should be thoroughly researched and realistic. The fabs that are doing well, says Grace, have absorbed these lessons.
Nevertheless, there is still a long road ahead. Despite the uptick in demand, overcapacity remains a problem. “With rare exceptions, people are still working at less than capacity,” said Grace. And a lack of standards remains an issue. Unlike the semiconductor industry which is centered on the CMOS process, MEMS fabrication processes are still generally proprietary and unique.
“We are evolving toward families of standards,” said Grace, adding that he is working with the trade group SEMI on expanding their list of MEMS standards beyond the current tally of two. “We feel that a judicious selection of standards will benefit the customers by lowering costs and providing a faster time to market.”
Going forward, he argues, growing demand could provide incentives for manufacturers to seek efficiencies from standardizing on families of processes. Like the personal computer industry of the late 1970s and early 1980s, there is now a plethora of competing processes, a fact that limits the industry’s overall growth. PCs experienced rapid growth after Microsoft’s DOS and Windows became the standards for personal computing. If the MEMS sector comes together around a suite of standard processes developed for specific applications, so the argument goes, then MEMS would be better positioned for a similar spurt.