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Feb 2nd, 2011
What can we expect in 2011 in the MEMS business...?
Growth, Growth, Growth... What is funny in the MEMS business is that key structural aspects of the business have not changed since more than 15 years:
MEMS is a very fragmented market:
- A limited number of applications have a market size above $200M (less than 10).
But on the other hand, the business has dramatically changed due to the growth of the consumer electronic applications of MEMS devices:
Process optimisation is step by step happening in large companies. But MEMS foundries are really not pushing such optimisation, mainly because it is not a request from their customers. We see more and more manufacturing platforms in place, which is a good way to manage the diversity of MEMS front end and back end processing. Yole has just released a very new report analysing the manufacturing process evolution (in technology and business) and how the companies are trying either to decrease the complexity of the MEMS front end process... or embedding it into a plate form.
So what is new for 2011? Well, from my point of view with 20 years of active analysis of the MEMS market, I am really surprised by the new business model which is spreading very rapidly among MEMS companies:
Companies are more and more supplying bare MEMS die to customers... but also competitors. Just take few examples:
Sensor fusion (and linked software knowledge) is more and more important:
So what can we wait for 2011?
As the companies are able to provide nice forecasts, more M&A will happen: end of 2010 has seen these signs of increased M&A and more will happen.
But one thing remains a key problem (or a great innovation provider): packaging of MEMS devices is more and more important: it is still 30% to 40%of the cost of a device but it is becoming not only a cost but a way to innovate, in order to make thinner devices, integrate more functions, moving to the 3rd dimension...
So, yes, the MEMS business is really moving fast and 2011 will be another incredible year of innovation, product launch, growth... and M&A.
Jean-Christophe Eloy, President & CEO, Yole Développement
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