Status of the MEMS Industry 2014
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.
More information on that report at http://www.i-micronews.com/reports/Status-MEMS-Industry-2014/1/454/