MEMS Industry Finally Comes of Age

Electronic News, April 30, 2001 by Marlene Bourne

WHILE THE SCOPE AND USE OF MICRO-electromechanical Systems (MEMS) are more far-reaching than many realize, the technology has come up short in the past 10 years, with commercial deployment limited beyond a few niche markets. Despite much talk about the potential of MEMS, only a few products have found large-scale success. As a result, some are beginning to regard MEMS as a flash-in-the-pan technology.

However, nearly a decade after MEMS were introduced, MEMS technology is now spawning a very real industry. Over the next 18 months, an incredible array of MEMS products will move into volume production and impact a wide range of industries. With current MEMS markets expanding and new ones emerging, the industry will look far different in five years.

Worldwide, MEMS revenues will nearly quadruple by 2005, surpassing the $11 billion mark. Telecommunications applications will be key drivers in this growth as the telecom segment jumps to nearly 33 percent of the overall MEMS market in 2005, up from less than 1 percent in 2000. Photonic switches, tunable lasers and optical networking filters are the most promising MEMS products for the telecom market.

MEMS are micron-sized devices that can sense or manipulate the physical environment. These chip-level gizmos are created via micromachining using processing steps derived from basic IC techniques. MEMS usually have moving parts and are typically fabricated on silicon.

Most people are aware of the MEMS products that have seen the greatest commercial success to date, even if they were unaware of their nature as MEMS: the micronozzles in ink-jet printers, accelerometers in airbag-deployment systems and pressure sensors in blood-pressure monitors. Yet beyond the big successes lies a desert of MEMS products that over the past decade have failed to reach the same level of achievement. That is about to change. Promising next-generation products include mirror arrays -- for use in photonic switches, projection systems and wearable displays -- cell phone relays and biochips.

Of the two MEMS product classes -- sensors, which measure the environment without modifying it, and actuators, which provide or manage some type of action -- sensors currently lead the market, but actuator sales will far outpace them by 2005. On average, actuators cost more than $1,000 compared to the few dollars charged for sensors. On a unit basis, the market for actuators is much smaller than sensors -- tens of thousands as opposed to tens of millions -- but it's the cost difference that will drive the market leadership transformation.

One of the most exciting trends to develop over the past year is the increased interest from venture capitalists (VCs). Despite the venture capital crunch and recent high-tech slowdown, VCs have continued to shower MEMS start-ups with funding. VCs invested nearly $510 million in MEMS companies during the first quarter this year, nearly as much as they did in all of 2000. This is a far cry from the mid-1990s when most MEMS firms subsisted on a couple of million dollars in DARPA grants.

MEMS manufacturing capacity appears to be strong. Numerous fabrication facilities are coming on-line this year, several facilities are producing far below their capacity, and traditional semiconductor foundries are now getting involved with MEMS. As a result, any manufacturing capacity constraints that may appear due to the current focus on photonic switch fabrication will be short-lived. However, there could be a production bottleneck in the packaging area as In-Stat is unaware of any new companies entering this space or of existing ones expanding capacity.

Finally, in early 2001, the industry reached a milestone with the formation of the MEMS Industry Group (MEMS-IG), a U.S.-based industry organization. With a central voice, the MEMS industry is even better positioned to move forward. For the MEMS community, the outlook has never been brighter.

Marlene Bourne is a senior analyst with Cahners In-Stat Group, Scottsdale, Ariz.