MEMS sector faces a fight to provide value
It is not a new theme. Behrooz Abdi, CEO of InvenSense Inc. (San Jose, Calif.), discussed the same idea in a presentation at a MEMS event organized by SEMI in 2015 (see Not enough money in MEMS, own the data, says InvenSense CEO).
But at this week’s Munich event, organized by the MEMS & Sensors Industry Group, many executives seemed to have latched on to the idea and wanted to talk about it. That’s not to say that the sector is in crisis, but the MEMS executives are increasingly and painfully aware that the market dynamics are such that they are facing increasing capital expenditure while it is often their customers and customers’ customers that reap the most financial benefit.
It was a theme that Claire Troadec, MEMS analyst with Yole Developpement, turned to in her presentation at the conference but also one where she offered some hope in that the situation remains complex and dynamic with opportunities for component suppliers to move up the value chain or to create new and valued components.
Troadec started by predicting that the electronics industry is on the verge of a third era, that she called Beyond Moore, enabled by MEMS actuators.
Next: What’s next?
Meanwhile the fragmentation of the MEMS and sensors domain is being mitigated at least in the mobile phone by the move towards three distinct hubs that have common packaging characteristics. These are the inertial, the environmental and the optical.
The inertial hub with closed packaging is the most developed with integration at the sensor level and with efforts in miniaturization now taken to the packaging domain. The significant developments are now likely to be in software for data fusion and with pressure to improve accuracy for indoor-tracking, Troadec said.
Next: Shrinking ASPs
However along with that integration has come a shrinking ASP with an inertial bill of materials now at around $1.
The optical hub has the opportunity to add proximity and ambient light sensing as well as features like near-IR for gesture sensing and 3D mapping, and multispectral imaging and spectrometry. Mainly on the value given by consumers to pictures the BoM for that hub has remained relatively high at $10 in the smartphone, Troadec said.
The third hub is the environmental one that provides an opportunity to add value. The need to open to the atmosphere could allow pressure and microphone sensors to come together in a single package with temperature and humidity and to be augmented with gas sensors and particle detection.
Environmental combo sensors will be coming through in the next two to three years on the way to a complete “comfort” sensor, said Troadec.
But the arrival of MEMS and sensor combos and hubs illustrates the front line in a battle to provide and be rewarded for value in electronics, Troadec said. This is because the value is in the software rather than the hardware, she asserted.
Troadec explaine that as a result players such as Qualcomm, Samsung and Apple, the application processor and microcontroller providers, are trying to override hubs and gain access to the full functionality of the sensors. In contrast, the sensor vendors such as Bosch, STMicroelectronics and InvenSense are stepping up the value chain to create sensor hubs with software.
The high-end suppliers have limited access to sensors and tend to produce higher power consumption solutions but are closer to users and better able to define use cases. The component suppliers have deep access to sensor functions and can produce optimized performance, low power consumption solutions but have to promote software and use cases past gatekeepers.
Troadec illustrated the commoditization paradox with reference to MEMS averages selling prices (ASPs), which are close to declining faster that unit sales have been increasing.
Next: Change the game
One potential answer, said Troadec, is for the sector to compete on functionality and performance rather than on the size and price of a standard function. To do this would be to follow a lesson from the CMOS image sensor sector, which has seen consolidation but has also increased pixel size and die area to improve performance and command a better ASP.
Troadec’s final point is that actuators could also come to the aid of the MEMS sector in terms of providing additional market opportunities and ushering an era of closing the loop between sensing and acting upon that sensed information.
Troadec specifically mentioned autofocus from PoLight AS and the RealSense depth-sensing camera from Intel as examples of products that could go to high volume as well as RF switches.
PoLight is bringing a MEMS based autofocus unit to market with the help of STMicroelectronics. The latest word from the company is that mobile phones in 2017 will include the technology. Intel’s RealSense camera is an example of actuation because it includes a scanning micromirror from STMicroelectronics to cast its structured infrared light.
And the move to 4G mobile data is a gift to the MEMS sector because LTE-Advanced is beyond the capabilities of solid-state switchs. RF MEMS are strongly needed, Troadec. However, while this may be good news for such vendors as Cavendish Kinetics, WiSpry and AAC Technologies it comes too late for DelfMEMS, which recently went into liquidation.
Related links and articles:
News articles:
PoLight readies MEMS lens actuator for mass production
Intel selects ST micromirrors for human-machine interface
Not enough money in MEMS, own the data, says InvenSense CEO
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