Challenged by newcomers proposing innovative low-cost solutions for consumer applications, established MEMS players must develop new strategies to ensure continued growth.
THE MEMS CONSUMER MARKET IS GROWING IN UNITS. HOW CAN COMPANIES BEST TAKE ADVANTAGE?
Although consumer applications will enjoy significant volume growth (around 20% expected between 2013- 2019), strong price pressure (-7% a year) will result in modest 13% revenue growth over the same time period. And although the MEMS sector achieved 10.4% overall growth in 2013, closing in on a US$12B business, established players are struggling to continue their usual consumer applications growth. If we look at the top MEMS players, we see that STMicroelectronics while still producing at high volume, is struggling to get good margins – even though it’s shown impressive growth over the last several years, and reached US$1B sales in 2012 – the first MEMS company to do so. Meanwhile, Texas Instruments’ DLP sales are flat, since pico projection applications are long to take off (at least for consumer applications), and the professional/commercial projection market isn’t growing either. Also, Hewlett-Packard, the major inkjet heads player, has seen sales decline, as have most other inkjet heads companies.
Another characterization of the current MEMS industry is the fact that there is almost no new, big companies entering the business. Instead, newcomers have opted for a fabless model, thus minimizing their infrastructure investments.
With this in mind, here are a few different ways that major MEMS companies can be more successful:
• MEMS product portfolio diversification: this is the case for STMicroelectronics, Robert Bosch and now InvenSense, while Texas Instruments is currently pursuing this strategy. Meanwhile, Knowles is benefiting from the microphone business’s growth – however, as with other MEMS devices, this market could level off in the future, so product diversification could be an option for them as well.
• Sharing production infrastructure between multiple markets: for example, Bosch’s MEMS automotive business compensates for the low margin in its consumer activity. STMicroelectronics has also entered the automotive business, but with only modest success thus far.
• Outsourcing manufacturing: InvenSense has shown impressive growth because, as a fabless company, its cost structure is less than other MEMS manufacturers.
Also, with the market requiring increasingly complex sensing functions, software has become a critical part of the sensing module, especially for combos. Invensense’s acquisition of Movea in July 2014 confirms this trend.
In addition to the companies shown on previous page, newcomers like mCube, Qualtré and Maxim are arriving with innovative MEMS structures for next-generation gyroscopes and inertial MEMS. Yole Développement report presents the 2013 MEMS sales rankings and discuss the growth of the different MEMS markets in which these companies are involved.
NEW MEMS CHALLENGES AHEAD: MAXIMUM OPTIMIZATION VS. BREAKTHROUGH
Even though Si micromachining developments began in the 60s, commercial success didn’t come until 30 years later. In the 1990s Sensonor found international success with SA20, a sensor for airbag systems. Comprised of a piezoresistive beam of silicon, around 35M of these sensors were sold worldwide, and the company possessed an estimated 60% - 70% of the European market for airbag sensors. A decade later, in the 2000s, the comb drive architecture became one of the major MEMS architectures for sensing inertial movement, and Texas Instruments’s success with DMD was just beginning. In 2010, packaging became an enabling process step, and today, the first MEMS products to use 3D TSV are hitting the market, with several companies launching small, low-cost sensors with new manufacturing and packaging approaches, i.e. STMicroelectronics and Bosch using TSV, with Bosch doing TSVs in the ASIC; mCube using a 3D MEMS process and Maxim reducing gyro by about 30% using a proprietary surface MM process and a gold silicon eutectic wafer bonding for hermetic encapsulation.
Today, size reduction is a challenge. Inertial always needs minimal mass to detect movement, and there seems to be a limit to how far costs can be reduced. Consequently, there are two ways to further reduce MEMS size and cost. One is to further emphasize MEMS process optimization with 3D integration and new wafer bonding approaches. The other is to use breakthrough technology with new detection principles. For example, M&NEMS from Tronics is very promising. It uses a thick layer for inertial mass (MEMS) and a thin layer for the gauge (NEMS). Beyond this, many R&D labs are investigating new approaches for new detection principles, i.e. nano optics, SMR/SNR, FM detection – but these are often very disruptive approaches, still years away from industrial maturity since some of them don’t use traditional semiconductor manufacturing approaches.
For a new MEMS technology to be successful, at least two criteria are necessary:
Have the right production infrastructure
Convince customers of this new approach
In this report, Yole Développement analysts compare existing MEMS solutions with new approaches and the benefits they offer.
MEDICAL, AUTOMOTIVE, INDUSTRIAL AND DEFENSE APPLICATIONS ARE SHOWING HEALTHY GROWTH
Yole Développement analysts expect a 13% CAGR through 2019, resulting in a $24B MEMS market. Of the aforementioned applications, medical will have the largest individual CAGR (24%).
Indeed, medical is expected to be the fastest-growing MEMS market, driven by miniaturization, wireless communication and decreased power consumption. Many changes are contributing to this market dynamic. For example:
• The demand for in-home digital blood pressure monitors is growing rapidly, as they allow hypertension patients to monitor their blood pressure levels at home
• Accelerometers are emerging in patient activity monitoring systems
Microfluidics is still the largest market with different trends, for example:
• Integration of sample preparation into the chip in order to obtain total analysis systems
• Microfluidic chip cost reduction to address the disposable devices market through manufacturing techniques
• Increased chip density for multiplexing, research applications and genome analysis
• Integration of functions mainly done at system level
• For dispensers, the largest growth is expected in the inhaler market, which might find applications outside the respiratory disease market
On the devices side, chemical MEMS, infrared sensors and new magnetic MEMS are also new opportunities. For example, the major changes in consumer applications will come from the adoption of chemical and humidity sensors in smartphones. With Samsung integrating Sensirion’s component in the Galaxy S4, we foresee consistent adoption of chemical sensors. Despite the suppression of this sensor from the S5 series, and even though no other smartphones currently integrate chemical sensing, we still expect progressive adoption of chemical sensors in smartphones beginning in 2016 with small volumes series first (CO2 sensors, etc.), and ramping-up in 2018.
These are just a few examples of factors driving the MEMS market. Our MIS 2014 report presents a deep analysis for every MEMS market: automotive, consumer, medical, defense, aeronautics, industrial and telecommunications.
KEY FEATURES OF THE REPORT
• Understanding of MEMS markets and applications
• Understanding of MEMS players’ strategies
• Evolution of competitive environment
• Analysis of MEMS technology challenges
• Analysis of the latest M&As and startups
• 2013-2019 MEMS markets (in units, $US and wafers)
• 2013 MEMS players ranking
• Description of 2013 MEMS applications: automotive, consumer, medical, defense, aeronautics, industrial, telecommunication
• Overview of current MEMS challenges: size reduction, cost pressure, packaging issues, new sensing principles, future manufacturing technologies
• Analysis of possible future technologies for sensors and MEMS
• Dedicated MEMS production analysis
• All MEMS devices and applications (220+ applications) are covered