The global MEMS revenue is set to grow at a 7.4% CAGR, from $11.5 billion in 2019 to $17.7 billion in 2025, according to Yole Développement. But who is leading the race? Who are the followers, the challengers, the changers, and the nichers?
The global MEMS revenue is set to grow at a 7.4-percent CAGR, from $11.5 billion in 2019 to $17.7 billion in 2025, according to Yole Développement (Lyon, France). The consumer market is and will continue to be the foremost driver for MEMS with about 60 percent of the total, followed by the automotive market at less than 20 percent of the total. But who is leading the race? Who are the followers, the challengers, the changers, and the nichers?
In 2004, market leaders were so dominant that they left many contemporaries far behind. In 2016, the market composition changed and became more balanced. The year 2019, however, has a strong sense of déjà vu.
“When I did the ranking in 2004, we were moving toward a consolidation of the semiconductor industry, and I thought that the MEMS industry would follow the same path and end up with only the big players,” Éric Mounier, fellow analyst at Yole, told EE Times Europe. However, “when I did the ranking in 2016, I was surprised to see that the big ones were not so big and that the smaller ones had grown. I was wrong about the Battle Royale theory. This year again, I am surprised to see that we are back to the Titans Battle with Broadcom and Bosch, followed by smaller companies.”
Is this indicating a broader trend? Hard to say, but Broadcom and Bosch now lead the industry with almost $1.4 billion revenue each, while the other key MEMS stakeholders compete in the $400-million-$600-million range.
To explain Broadcom’s ascent to the summit, Mounier said, “The demand has been so high in the smartphone market over the past years that the demand for RF MEMS has increased dramatically.” Bosch is a sensorist, he continued, and “it’s probably the only company doing only sensors to experience such a growth in the MEMS business.”
While Broadcom is focused on one device, one market (RF MEMS for mobile communications), Bosch has activities in the automotive and consumer markets with accelerometers and gyroscopes for smartphones. “They go where the wind goes and balance activities between automotive and consumer [accordingly].”
Broadcom’s main competitor is North Carolina-based Qorvo. Both are strong players in one device type in the RF MEMS domain.
Bosch and STMicroelectronics are directly competing in the consumer market with the same type of devices, i.e. accelerometers, gyroscopes, pressure, and inertial sensors. “ST is smaller because it’s not so active in the automotive market,” commented Dimitrios Damianos, technology & market analyst in the photonics and sensing division at Yole. In the top 10, NXP has inertial, pressure and magnetic sensors, but “it’s only in automotive, that’s why Bosch, being in both markets, is leading the pack of sensorists.”
Ten years ago, Texas Instruments (TI) and Hewlett-Packard (HP) held the top positions. Today, they respectively rank fourth and sixth. “TI’s Digital Light Processing device is very expensive for the automotive industry,” Damianos said. “Of course, it can be used in BMW or Mercedes cars for smart lighting or head-up display, but it will not see a massive adoption in low-end or mid-range cars.” Moving to HP, Damianos outlined the drop in demand for ink-jet heads. “Fewer people are buying personal printers. They use their smartphones and tablets instead of printing a lot of documents.”
Under pressure with ever-decreasing margins, large MEMS suppliers struggle to increase their revenue while medium-sized MEMS companies, addressing high-end applications, experience steady growth.
Among promising companies likely to continue their climb to the top, Damianos mentioned China-based Goertek, which is mainly focused on MEMS microphones and pressure sensors. “Between 2018 and 2019, we observed a huge growth, around 30 percent, thanks to their design wins with many big players and notably Apple.” In general, Goertek is benefiting from the voice interface trend, and they have many devices like microphones for smartphones and wearables. It’s competing with Knowles in the global market.
Mounier said he sees Infineon as a potential challenger in the future, because they do MEMS in automotive and have many developments in gas sensors. “They still have a modest growth, but they are an interesting company to follow.”
The MEMS market has not significantly changed over the past 10 to 15 years, deplored Damianos. Because “there has been no new device that could open up new markets, sensor manufacturers have been trying to gain extra value from their sensors.”
To escape from commoditization and commercial saturation, MEMS suppliers are indeed looking for ways to add value. This can be achieved by finding new applications and use-cases such as augmented reality and virtual reality. Another option consists in aggregating functionalities and improving the existing use-cases by adding extra algorithms and software. “You add an extra piece of silicon like an ASIC, next to your sensor, either embedded or standalone, and increase the value by alleviating the existing use case.”
Moving one step further, MEMS providers can do some processing and computing at the edge. The value is enhanced by adding an ASIC or MCU to interpret the data and by adding more functionality. This often involves an acquisition, a collaboration or a change of business model.
Basically, each MEMS company has its own strategy. Knowles Electronics, for instance, identified a turning point in edge audio processing with the emergence of artificial intelligence and took actions to make its products more powerful and suitable for AI. With the Google Pixel 4 smartphone, the Illinois-based company saw an opportunity not only to place microphones but also to add a processing chip, increasing its value in Google phones by a factor of four or five. The acquisition of Audience in 2015 was pivotal. While selling MEMS microphones, Knowles increased the value of the silicon sold to Google.
Bosch took a slightly different approach and partnered with Qualcomm. It is using Qualcomm’s sensor execution environment and software platform to provide more advanced features in its MEMS sensors for smartphones and wearables.
Some startups are also trying to climb the value chain even higher. Syntiant, Aspinity, Cartesiam, and Imerai are indeed moving toward this edge AI, and this could well be the next step for MEMS. “The two domains that can use AI are the audio domain, where you have voice data, and the inertial domain, where you do some vibration monitoring,” Damianos said. “We will see where that leads us.”
Small players have difficulty accessing large volume markets, and it can take 10 to 15 years for them to start making money with MEMS. Today’s startups will not enter next year’s ranking, but some startups are trying to change the game in the micro-speakers market. For instance, Arioso Systems, a spin-off from the Fraunhofer-Institute for Photonic Microsystems (IPMS), has developed a MEMS-based micro loudspeaker that aims to replace common electrodynamic loudspeakers in wireless in-ear headsets. Similarly, Santa Clara-based startup xMEMS recently emerged from stealth mode with the introduction of what it claims is the first monolithic true MEMS speaker, delivering high fidelity, full-bandwidth sound, and low harmonic distortion for smart personal audio devices such as true wireless stereo earbuds, in-ear monitors and headphones. Dubbed Montara, the MEMS speaker aims to silence voice-coil and hybrid-MEMS speakers by implementing the entire MEMS speaker — actuator and membrane — in silicon.
“These companies don’t have sales yet, but they are trying to change the game of the microspeaker market, which has not changed for more than 100 years,” said Damianos. “These companies may gain a lot of revenues, but we need to wait at least five years to see the first results.”
This article was first published on EE Times Europe