ST and Asian players gain share, as Top 20 MEMS foundries slightly outperform sector

Contributed by Jean-Christophe Eloy, President & CEO, and Jérôme Mouly, Market Analyst, Yole Développement

This year’s ranking of the Top 20 MEMS foundries starts to shift East, as TSMC makes the ranking for the first time.

TOP 20 MEMS Foundries – 2009 revenues

Double digit growth at Taiwan’s Asia Pacific Microsystems (APM) and Touch Microsystems (TMT) also help push the combined share of these companies in Taiwan to close to 9% of total Top 20 foundry revenues, which represent the vast majority about 96% of global MEMS foundry revenues of the total MEMS foundry market. That’s still a small part of the total, but it’s almost double the share last year.

Foundries continued to gradually take on a larger portion of total MEMS production, with total foundry revenues at the Top 20 total declining about 3%, slightly less than the roughly 5% drop in MEMS sector revenues overall.

Dalsa Corp. significantly outpaced the industry with 19% growth to become the largest independent MEMS foundry, and moved into third place in the rankings with $31 million in foundry revenues. It closed in a bit on number two Texas Instruments Inc., who saw a 24% drop to $45 million.

STMicroelectronics continues to dominate the foundry business, and increased its share in 2009 by about a point despite a 1% slip in foundry revenues, as many of the other major producers saw sales drop more sharply in the general downturn in consumer electronics and automotive applications. …

Like the MEMS market overall, the foundry/fabless business is dominated by several big companies making established volume products— particularly STMicroelectronics producing the heater parts of fixed inkjet heads for Hewlett-Packard Co., while HP keeps its key polymer patterning process for the nozzles in house. ST’s revenues held up better than most because sales of printers with the fixed heads it makes for HP held relatively steady compared to those with disposable heads, and because of its healthy balance of customers.

HP and InvenSense are top foundry customers

On the customer side, the Top 10 users of foundries generated slightly over $500 million in revenues, something over half of that from inkjet head production outsourced by HP and Lexmark with their fab-light strategy. But more interesting on this first-ever ranking of fabless and fablight companies from Yole Developpement are the two purely fabless MEMS companies InvenSense Inc. and Knowles Electronics now successfully pushing the $100 million range without internal production. Equally notable: five of the ten leading fabless companies are using very CMOS-fab friendly production, for a range of new device technologies. InvenSense has CMOS fabs add a MEMS module to make its gyros. And MEMSIC, Akustica, SiTime and WiSpry have designed MEMS structures for thermal accelerometers, microphones, oscillators and RF switches that integrate MEMS with CMOS.

InvenSense’s nearly fivefold growth was largely due to demand from the gaming market –and from its success in bringing down the cost of more sophisticated motion sensing. “The gaming market was a very pleasant surprise,” says CEO Steve Nasiri. “We didn’t think that games would be our first big market.” Demand for the company’s gyroscopes was driven by low cost, a company focus from the beginning, with its technology for capping the MEMS wafer with the ASIC, enabling a 3-axis gyroscope for less than $1 /axis. “A $.10 drop in cost can mean a two-fold increase in volume,” notes Nasiri. “At $10 there is very little consumer market for a 3-axis gyro.”

InvenSense is now moving towards integrating smarter motion processing functions in a single unit, to enable devices that not only sense motion, but that can quickly and accurately recognize specific and complex gestures. It recently announced a module with a 3-axis gyro, processing unit and software that takes input from a 3-axis accelerometer and outputs a 6-axis solution. Coming next is integration of a 3-axis accelerometer in the unit, and then integration of input from 3-axes of magnetometers to tell which direction the movement is in.

The company expects demand from smart phone makers anxious to differentiate their products from the rest with new features—and to generate more revenues with more engaging applications from their app stores—enabling things like scrolling through screens with a flick of the wrist, and turning off the phone with a shake.

Dalsa and APM see double digit growth

Dalsa’s added some $5 million in additional MEMS foundry revenues to lead the independent foundries, pushing last year’s leader Micralyne Inc. back to second place. With the growth of the foundry business, both these companies are now large enough to rank among the Top 30 MEMS companies in Yole’s annual overall ranking. Silex Microsystems and Asia Pacific Microsystems follow closely with revenues in the $20 million range.

Dalsa saw healthy growth in the consumer markets for inertial sensors, which made up for the downturn in the auto industry, as it ramped production of new generation of smaller, lower cost products on an existing customer-specific platform. “We saw the benefits of hard work from the last several years as we ramped up programs started a couple of years ago,” says Donald Robert, Dalsa Semiconductor VP of marketing and sales, who notes that the company also expects double digit growth to continue this year, from programs now in the pipeline.

Asia Pacific Microsystems (APM) and Touch Microsystems (TMT) rode the Asian growth wave, with a 10% and 29% increases in sales, respectively. APM ramped production of MEMS pressure sensor elements for a leading automotive electronics company. Jazz Semiconductor also saw 25% growth, as its customers like SiTime started production. Many of the rest of the top foundries saw double digit declines in revenues, mostly because small declines in business at these very small suppliers translate into large percentages.

Micralyne reports its revenue dropped significantly for the fiscal year ended March 2009, but it has seen a pick up in activity since before Christmas. “We see opening of the purse strings for R&D at big multinationals trying to add MEMS solutions in a wide variety of applications,” says CFO and interim CEO Derek Hudson. Silex also saw sales slip in 2009 as a key customer stopped production because of inventory buildup, but their 3D packaging technology remains a very appealing platform for new players for efficient wafer level packaging technology and a shorter time to market.

Innovative Micro Technology Inc. sales declined as well, but the company reports it is seeing growing demand from optics and biomedical applications. “The optic companies are coming back, ” says CEO John Foster, noting a surge particularly in mirrors for reconfiguring optical add and drop, driven by the need to make more efficient use of the available bandwidth as network traffic increases. Also strong are optical to electrical interconnect applications for things like high bandwidth computer to computer connections. On the biomedical side, key areas are cell therapy and drug delivery systems, from skin patches to various implantable systems. Foster says MEMS drug delivery systems are now shipping for implant in animals.

Tronics Microsystems reports some new contracts in a so-so year, mostly from Asia, on the inertial side, and more recently also in microfludics. The company continues to get most of its revenues from inertial MEMS, and 70%-75% from manufacturing, the rest from development of prototypes for production. Vincent Gaff, manager of marketing and business development, notes that Tronics is moving into integrating sensors into medical products with its acquisition of a California medical engineering company, and into larger volume production with its shared facility agreement with the fab in Dallas. Among developments in the pipeline are implantable pressure sensors in biocompatible titanium packaging.

Yole Developpement defines a MEMS foundry as a company who does MEMS device production for another company, whether the whole device or only selected steps, and whether only for some select customers or on the open market. We do not include those companies who do only non-MEMS processes like wafer preparation, ASIC production or through-silicon via production, even for MEMS devices. We count as foundry customers both the fabless companies who do not own their own MEMS fabs, and the fab-light companies who own MEMS fabs, but also outsource some significant part of MEMS production to others. Currencies are converted at average exchange rates; per cent change is figured in US dollars.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s