MEMS: The year past and the year ahead

December 13, 2011 — Jean-Christophe Eloy, president & CEO, Yole Développement, shares an analyst’s view of the micro electro mechanical system (MEMS) industry, calling 2011 a year of transition and changes. 2011 is the year when the MEMS market transitions to big business with wide-spread adoption, Eloy asserts.

In 2011, the MEMS sector topped $10 billion for the first time, and a MEMS company (InvenSense) approached $1 billion with its initial public offering (IPO).

Fabless MEMS is becoming a viable business model, noted Eloy. A-List companies are creating MEMS teams: Apple, Google, and Facebook for example.

MEMS are going into high-volume applications like mobile phones. MEMS sensors are showing up in all kinds of systems, enabling them to interact with the external world and sense what is happening: smart munitions, cardiac rhythm management, smart phone functionality, oil drill monitoring, etc.

The MEMS industry has a long way to go before becoming a $100 billion business, Eloy said. "MEMS integration is still complex for system manufacturers, delaying fast market adoption," he added. MEMS manufacturers need to roadmap simplified system integration for more growth of the MEMS business. MEMS companies need to come together to create a MEMS ecosystem, which will simplify the integration of MEMS into larger systems and modules by non-MEMS-specialists.

In 2012, new devices will go into volume production, as has happened with inertial devices in mobile systems; and new applications will evolve, as has happened with antenna-matching MEMS technology, MEMS-based micro fuel cells, Mirasol MEMS-based displays, enumerated Eloy. More units will be produced in inertial sensors, microphones, electronic compass, pressure sensors in the coming year.

Device makers will have to counteract price pressures by redefining their value proposition — selling functions and not only devices. "This is where the major changes will happen in 2012: if MEMS companies want to preserve their margins, they have to remember that MEMS is all about selling functions and micro-systems."

Many MEMS companies are acquisition targets for semiconductor and system makers. Eloy breaks this down into 2 factors: MEMS companies have reached market maturity; and venture capitalists (VCs) that invested in MEMS start-ups 10 years ago can now see a return on their investments.

In 2012, expect growth of MEMS unit volumes and more M&A from interested semiconductor companies.

Figure. 2016 MEMS market value breakdown. Total: $19.6 billion. SOURCE: Yole Développement.

Yole Développement is a group of companies providing market research, technology analysis, strategy consulting, media and finance services. Learn more at www.yole.fr.

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