MEMS is happening in Vegas baby, and it’s coming home with you, too

By Karen Lightman, Managing Director, MEMS Industry Group

Everyone knows the famous refrain “what happens in Vegas, stays in Vegas.” But for MEMS, you’ll want what happens in Vegas to come home with you. Why? Because MEMS at CES has gone waaaay beyond sensing your touch and letting you play Angry Birds.

MEMS Industry Group (MIG) is going back for a second year to International CES – because MEMS is happening in Vegas. And baby, it’s so cool and innovative and its applications are so new and exciting that it’s coming home with you, too. At 2013 International CES MEMS will be ever-present; and MIG is helping it stand out even more this year with our half-day MEMS conference track on January 8.

We will kick off our conference track with a very special keynote from Mr. Klaus Meder, president of Bosch Automotive Electronics, entitled “The MEMS Generation: Why Miniature ‘Machines’ are changing the User Experience with Everything.” Mr. Meder will discuss the connectivity of the automobile with the consumer, all enabled by the power of MEMS. I spoke with Mr. Meder earlier this fall regarding this keynote and was thrilled to hear his passion for MEMS and the role he sees it playing in what he calls this “interconnected lifestyle.” In Meder’s keynote, I expect that he will be taking the theory of the Internet of things one step further by demonstrating how a combination of MEMS and sensors are enabling our lives to be untethered by wires or roads. I was given a sneak peek of his presentation and got goose bumps when I saw the car of the future –  and I think you will, too.

Who’s faster to market with new product designs? New global industry study tells all.

By Eric Larsen, Vice President of Business Intelligence, ATREG, Inc.

The manufacturing landscape of the MEMS industry will continue to evolve as the market matures to become a higher-volume, less custom business. Companies competing in larger scale consumer MEMS markets will seek to insource manufacturing in order to shorten product cycles times and gain a time-to-market advantage.

According to the key findings of a new global IDM industry study – Managing Complexity & Change in the Semiconductor Ecosystem – initiated by The Wharton School at the University of Pennsylvania and ATREG, Inc., IDM firms are faster to market with new product designs on existing manufacturing processes whereas fabless companies are faster to market with new designs on new manufacturing processes.

The study, instigated by Wharton management professor Dr. Rahul Kapoor, sheds light on a broad array of challenges and opportunities that IDM companies face within their ecosystem. It is based on detailed responses from senior executives at 23 publicly listed IDM companies, including 11 of the 20 largest IDMs (2011 revenue). The average time-to-market, defined as the period from design start to mass production, is about 11 months for a revision of an existing product design. It increases to about 17 months for a new product design. While IDMs are much faster to commercialize new designs on existing manufacturing processes, they seem on average slower to commercialize new designs on new manufacturing processes. This could reflect inherent differences in the extent of design manufacturing customization between fabless and IDM companies. The difference could also be due to the fact that fabless companies essentially contract for a newly available manufacturing process at a foundry whereas IDMs internally develop a new manufacturing process. The IDM study results were compared with those from fabless companies collected during an earlier study conducted by Dr. Kapoor in conjunction with GSA*. Other key research findings include:

• Manufacturing strategy: In general, while the relationship with foundries is somewhat at an arm’s length, an IDM’s balanced manufacturing strategy seems to be paying off at least in the short term. The importance of having internal manufacturing was reinforced not only in terms of having a high level of coordination between product design and manufacturing activities, but also having greater leverage over foundries.
• Intellectual property (IP) reuse: On average, an IDM reuses about 73% of design IP in the revision of an existing product design and about 44% in a new product design.
• Source of IP: A large proportion of IP for IDMs continues to be internal (84%) with some IP dependence on third-party IP firms and foundry suppliers.
• IDM-foundry relationships: There are lower levels of information sharing and involvement in IDMs’ value-creating activities by foundry suppliers. This may be reflective of the conflicts and challenges that IDMs face in working simultaneously with both internal manufacturing units and external foundries. At the same time, this simultaneity also seems to provide some benefits to IDMs as foundries are much more likely to customize their manufacturing processes around the needs of their IDM customers.
• IDM-complementor relationships: Companies providing complementary products integrated in the customer’s application play an important role in enhancing the IDMs’ competitive position. Managing those more complex relationships means that IDMs pursuing collaborative innovation models need to explicitly develop organizational structures to effectively manage these new types of relationships.

I welcome your comments at eric.larsen@atreg.com.

 

Notes:

The full Wharton-ATREG research report is available for download at http://www.atreg.com/Wharton_ATREG_IDM_industry_study_Nov2012_FINAL.pdf.

*Collaborative Innovation in the Global Semiconductor Industry: A Report on the Findings from the 2010 Wharton-GSA Semiconductor Ecosystem Survey, Dr. Rahul Kapoor / GSA, http://www.gsaglobal.org/gsa-resources/reports/collaborative-innovation-in-the-global-semiconductor-industry/

 

About Eric Larsen

As Vice President of Business Intelligence with, Eric oversees all of ATREG’s research-related activities while providing strategic analysis for ATREG’s clients. His ability to uncover valuable information and talent for linking people together makes Eric a valuable resource within the semiconductor industry. Eric’s contributions have resulted in successful transactions on behalf of Sony, IBM, LSI Logic, NEC, Atmel, and Renesas among others.

Prior to joining ATREG in 2003, Eric served as Vice President with global commercial real estate services firm Colliers International. He holds a BA in Business Administration from Seattle Pacific University.