Tronics Becomes First Pure-Play Custom MEMS Manufacturer to Maintain Profitability

Tronics Microsystems SA, the leading global contract developer and manufacturer of highly differentiated custom MEMS components for demanding applications, announced today that its fiscal quarter that ended Sept. 30 marked the company’s fifth consecutive quarter of net profit, making Tronics the first pure-play contract manufacturer of advanced MEMS devices to achieve consistent profitability. Moreover, the privately held company said that the 2007 fiscal year will close in December with a solid net profit while revenues for 2007 are expected to exceed last year’s by more than 50 percent.

“The MEMS foundries and contract-manufacturers businesses have experienced a very strong market — 35 percent average annual growth — but the profitability is still not there,” said Jean-Christophe Eloy, general manager and founder of YOLE Développement, the French-based market research company and world leader in the MEMS market analysis. “The strong growth of Tronics Microsystems, almost two times higher than the market, and the net profitability over five quarters demonstrates its leadership in manufacturing specialized custom products and provides a strong outlook for their continued growth and success.”

Tronics’ success stems from establishing strategic partnerships with leading systems and sub-systems manufacturers in their fields and in developing and manufacturing highly differentiated specialized products for their demanding applications. This business model has fueled the company’s rapid growth among a select customer base in Europe, North America and Japan in diverse segments such as life-sciences instrumentation, and transportation.

Unlike MEMS foundries that focus mostly on wafer processing, Tronics has the ability to take complex MEMS concepts from design to product manufacturing, including wafer processing, assembly, custom packaging and testing. The company also proposes some platforms for custom products. Its customers rely on the French manufacturer to find and develop solutions and adapted supply chains to deliver them with qualified, packaged and tested devices, from MEMS dies to smart components. Today, 80 percent of Tronics’ revenues are generated by recurrent products manufacturing.

“Our industry-leading performance assures customers and potential customers that Tronics can be counted on to deliver high-quality, custom MEMS well into the future and to sustain the long-term relationships required for customer success. Moreover, our performance positions Tronics to be a driving force in shaping the MEMS industry,” said Tronics CEO Peter Pfluger.

In 2007, Tronics’ annual growth will exceed 50 percent, significantly higher than the average annual growth in the industry. This high growth follows its three-time inclusion among the 200 fastest-growing companies in Europe, Middle-East and Africa in the Deloitte Technology Fast 500 survey and last year’s ranking as the fastest-growing French company in the semiconductor and hardware category.

Tronics expects future growth to be driven by higher demand for custom products in the life sciences and transportation industries. These include ultra-miniature pressure sensors for medical implantable applications, inertial transducers for different motion sensing and navigation applications, and microfluidic devices for lab-automation.

Further validating its business model, Tronics achieved and maintained profitability even while expanding its technical capabilities and investing in facility expansion. To support customers’ demands Tronics expanded its Crolles headquarters facility in 2006 and moved to 150mm-wafer format. Earlier this year, the company announced the availability of additional characterization, assembly, packaging and testing equipment to strengthen the company's productization capabilities.

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