by Dr. Paula Doe, contributing editor, SEMI
MEMS-based systems were a $46 billion business in 2008, and despite the recession should still see 12% compound average annual growth (CAGR) through 2012, burgeoning to an $83 billion industry. That will mean a $13 billion market for MEMS devices and the equipment and materials needed to produce them, according to this year’s annual report on the MEMS supply chain from SEMI and Yole Développement.
Despite the downturn, production continues to move to 8-in. wafers, and to MEMS foundries. Though there’s currently an excess of installed 8-in. capacity, investors and customers are now insisting that even companies with initially relatively small volume products must have a roadmap to 8-in. production from the beginning. Any application aimed at high volume consumer markets has to look at 8-in. production going forward. And any device that needs to integrate with sophisticated ASICs made with even semi-current CMOS processes has to look at 8-in. production now.
Yole projects 8-in. wafer usage will jump 31% next year to some 14% of total wafer starts and maintain 24% CAGR through 2012, while 6-in. usage averages only 7% annual growth; the sector should be using 8-in. wafers for 19% of its total wafer starts by 2012. Though most volume products will move some production to 8-in., major demand will come from the established large-volume consumer products, inkjet heads, and digital light processors, as well as from the emerging but potentially large and cost-driven market for RF MEMS for handsets.
MEMS production also continues to move steadily to foundries, as some major MEMS manufacturers start outsourcing production, and fabless companies continue to startup and expand their business. What will this look like in the future? Yole estimates the roughly 13% compound annual growth for the MEMS market for the decade 2006-2016 will generate about a $20 billion business in 2016. If foundries gain the same 10% share of production that they have in the more mature semiconductor market, that would mean a $2 billion MEMS foundry business.
Big IDMs STMicroelectronics and Texas Instruments currently dominate the MEMS foundry business with their contracted production for select customers, accounting for slightly more than half of the total ~$400 million in production of the top 20 foundries last year. Both these producers saw double-digit declines in their foundry revenues last year because of their particular customer base. But the crowd of open MEMS foundries with revenues clustered in the $15M-$30M range managed healthy double-digit growth making newer devices.
Figure 1. Annual growth rate 2008 vs. 2007, on US $ basis. (Source: SEMI, Yole))
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MEMS systems used some $6.9 billion worth of MEMS devices last year, and will likely maintain a similar level of demand this year, before a sharp recovery in 2011 and 2012 expands the market to some $12.4 billion, generating average 12% CAGR for the period.
Demand for materials for MEMS should generally continue to increase in line with increasing unit volumes, but the relentless drive to reduce die size to squeeze into handsets and portable gear, and to reduce costs, is limiting growth in materials consumption. Total MEMS materials demand should maintain relatively stable 8.8% CAGR through the next five years, rising from $309 million in 2008 to some $470 million in 2012.
On the equipment side, however, existing overcapacity in the face of the recession continues to limit capital expenditures. Tool demand dropped to $142 million in 2008, but should jump back up to $510 million by 2012.
SEMI puts together this market study each year with Yole Développement to meet members’ expressed need for better information on how developments across the diverse range of MEMS applications impact manufacturing technology, and what that means for MEMS equipment and materials suppliers. The report is available to SEMI members as a complimentary benefit of membership to help them grow their business, at www.semi.org/mems. Others can purchase it directly from Yole Développement by contacting David Jourdan (email@example.com”).
Figure 2. The MEMS supply chain size, 2008-2012. (Source: SEMI, Yole)