Future challenges for the MEMS market

The recent golden age for MEMS markets may be coming to an end, with levelling demand for smartphones/portable applications, according to a report published by Yole Développement (Yole).

The Status of the MEMS Industry (2016 Edition) report is a detailed analysis of MEMS markets and related applications (automobile, consumer, defence and aeronautics, medical, industry and telecommunications) for the 2015–2021 period.

With the market forecast to grow by 8.9% to US$20 billion from 2015–2021, volumes are still increasing; however, the market is becoming highly competitive. And while use of MEMS microphones and inertial, pressure and gas sensors in mobile phones is spreading, these devices have very low margins. Meanwhile, end users are shifting rapidly from one device maker to another.

Yole’s analysts do not see large-volume markets being a short-term growth driver for MEMS, as the Internet of Things (IoT) is still a niche market with primarily industrial applications and wearable electronics applications have not reached high volumes, despite a promising outlook.

But markets such as industrial, medical and automotive applications still offer pockets of growth and profitability.

“The car industry is still hungry for sensors, with 20 MEMS devices per car on average today, and autonomous cars might offer more possibilities for MEMS technologies,” commented Dr Eric Mounier, senior technology & market analyst at Yole. He added: “New opportunities in medical come with long-term developments that are finding the market today. These include silicon microfluidic chips for medical micropumps, with Debiotech earning significant revenue from its MEMS micropump in 2015. Industrial and defence markets also provide growing opportunities for high-end and high-margin devices such as inertial and pressure sensors.”

The report also addresses the commodisation paradox. Over the past five years, the MEMS industry has been driven by increasing volume from the consumer industry with smartphones and wearables, and industry has in turn pushed for smaller dies for integration in thinner handsets. This has reduced prices, shrinking margins and reducing growth rates.

“2016 might be challenging for MEMS companies, but there are also opportunities with emerging and growing demand for pressure and gas sensors, fingerprints and autofocus shaping the consumer market,” said Claire Troadec, technology & market analyst, Semiconductor Manufacturing from Yole. “At Yole, we believe the future growth of the MEMS market will be driven by various applications, including smartphones, wearables, automotive and medical.”