The prolonged recession and credit crisis has triggered price, volume and dollar sales volatility in the Micro-Electromechanical Systems (MEMS) industry.
Weakened consumer demand for a myriad range of manufactured products including electronic devices/equipment, home appliances, telecommunications equipment, and automobiles, as a result of reduction in household wealth, decline in purchasing power, high unemployment levels, restricted access to credit, negatively impacted the market during this period. Demand for MEMS devices witnessed marked declines in the automotive and consumer products end-use sectors.
The automobile industry, which represents a major high volume end-user of MEMS technologies, was the worst affected by the recession with punishing fall in vehicle sales pushing auto majors into the red. Although shielded to a degree by mandatory regulatory safety standards, especially in Europe and North America, automotive MEMS applications witnessed weakened business prospects as a result of the crushing effect of depressed automotive production. With the focus of deficit scarred auto manufacturers shifting towards surviving the crisis, investments in high-end dashboard electronics waned thus drying up opportunities for MEMS in this sector. The focus towards producing cheaper, affordable less-equipped models additionally resulted in lower demand for accelerometers for use in airbags, tire pressure monitoring systems (TPMS), and vehicle stability control. The recession induced lengthening of the adoption cycle for automotive technologies revolving around cockpit electronics, powertrain, under-the-hood, and body electronics, temporarily staved off opportunities for MEMS technology in the automotive space.
Following the automotive application vertical, the consumer segment hurt the worst with MEMS sensors, which are used in a wide range of consumer electronic devices, feeling the heat of soft consumer electronics demand. Specific segments such as mobile phones, PDAs, and business projectors fell harder than the rest. The recession also made a disproportionate impact on industrial production as a result of reduced manufacturing, commercial, and economic activity, thereby hurting industrial applications of MEMS such as in oil/gas exploration, instrumentation, and process industries, such as, food & beverage, chemicals, pharmaceuticals, plastics, rubber, textiles, among others.
In the telecommunication space, MEMS applications in optical networks also softened significantly. The telecommunication industry, like all other industries stood acutely impacted by the crisis. The fundamentals supporting the demand for increased bandwidth and fiber optic based communication services in this industry was temporarily tranquilized as network operators were necessitated to prune down investment outlays in the year 2008 and 2009 to hedge the financial weakness in the market as well as in the balance sheets. Cooling demand for fiber optic communication services, and broadband Internet services frustrated telecom carriers and as a result pushed fiber optic networking projects into an uncertain and unstable period. Drying up of the debt market and the resulting shortages in capital investments, played instrumental roles in derailing network coverage expansion, upgradation schedules, and in suspending fiber optic projects. Several fiber optic broadband projects have been delayed as a result of network operators reining in capital investments. All of these factors impacted demand for optical telecom network equipment, and in the process the market for optical MEMS in telecom equipment.
Additionally, the complete meltdown of the real estate, housing and construction industry resulted in major disruptions of fiber to green field projects. Cancellation of new building projects resulted in reduced demand for FTTH – Fiber to the home technologies. Also impacted were fiber optics in brown field projects. All of these factors indirectly resulted in bringing down the level of orders for optical MEMS used in metro and long-haul optical telecommunications gear. Use of optical telecom MEMS in 1XN switches, Variable Optical Attenuators (VOAs), cross connects, Wavelength-Selective Switching Reconfigurable Optical Add/Drop Multiplexers (WSS ROADMs) and tunable filters, therefore withered, although temporarily.
With the recession now at its tail end, a sanguine future awaits the world MEMS market with MEMS device manufacturers focusing squarely on research and development of the technology to break into newer application areas. A game changing technology, MEMS currently stands at the helm of a major transformation in electronic architectural engineering. Microsensors and microactuators, which represent the hallmark of the ‘electromechanical’ domain are finding use in countless applications. Given the potential of the MEMS technology, and the value they offer to the power of miniaturization, integrators will reinforce their MEMS component stocks to develop new state-of-the-art products, which deliver key features and functionality involving MEMS technology. Although commoditization has already set in into high volume applications like consumer electronics, and automotives, the technology continues to witness radical changes in other sectors like industrial, healthcare, and semiconductor, wherein MEMS+IC are influencing the traditional architecture of System on Chip (SoC).
Ability of the MEMS technology to make medical diagnostic and monitoring technologies less invasive will garner special attention, especially so against a backdrop of a rapidly aging world population. The value proposition revolving around patient comfort, ease of drug delivery, and ensuing patient compliance will drive demand for MEMS in this space.
Product wise, Inkjet printheads is the largest selling MEMS device. However, the inkjet printheads market is suffering the two-fold impact of the global recession and the ongoing transition from disposable to permanent printheads. As a result, the unit shipments is forecast to decline through 2015. Beginning from 2011, MEMS displays will see encouraging growth due to demand for pico projectors and new MEMS flat-panel technologies for consumer electronics. ESC mandates will help spur the sales of accelerometers, gyroscopes, and high-pressure sensors, whereas TPMS mandates will propel MEMS pressure sensor sales by 2015. Europe and US account for a major share of the global Micro Electromechanical Systems (MEMs) Devices revenues, as stated by the new market research report. Global demand for MEMS in Medical/BioMedical End-Use is expected to increase at a robust pace during 2007 through 2015 period.
Major players in the marketplace include Analog Devices Inc., Apogee Technology Inc., Bosch Sensortec, Colibrys Ltd, Coventor Inc., Dalsa Semiconductor, Epson Toyocom, Hewlett-Packard, Invensense, IntelliSense Software Corporation, Kavlico Corporation, Kistler Instrument Corp., LioniX BV, MEMSCAP S.A., Memsic Inc., Micralyne Inc., NeoPhotonics Corporation, Panasonic Corp, Sensonor Technologies, Silicon Microstructures, Inc., STMicroelectronics, TowerJazz, Texas Instruments Inc, among others.
The research report titled “Micro Electromechanical Systems (MEMs) Devices: A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, mergers, acquisitions and other strategic industry activities. The report provides market estimates and projections (in US$) for major geographic markets including the United States, Canada, Japan, Europe (France, Germany, Italy, UK, Spain, Russia, Rest of Europe), Asia-Pacific, Latin America and Rest of World. End Use segments analyzed include Commercial/Industrial, Medical/BioMedical, Telecommunication, Computers, and Other Applications. Global MEMS devices market is also analyzed by product categories, such as, Accelerometers, Gyroscopes, Inkjet heads, Wafer Probes & Optical MEMS, Pressure Sensors, and Others.