Not enough money in MEMS, own the data, says InvenSense CEO

Not enough money in MEMS, own the data, says InvenSense CEO

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By eeNews Europe

What ‘s the reason for that?

Because the price of MEMS sensor components is likely to be eroded rapidly and largest part of the value is perceived to be in the services that can be based on the data acquired by those sensors.

“Yes the value is the data rather than the hardware,” said Abdi. “We do plan to bring end-to-end solutions to market in multiple vertical markets,” he told delegates at the European MEMS Summit, an event that was organized by SEMI on September 17 and 18 in Milan, Italy. “It requires a lot of investment but we have to take this chance and try. Otherwise it’s a race to the bottom.”

IoT revenue in billions of dollars by point in value chain. Source: GSA, McKinsey, IHS, InvenSense.

Abdi portrayed the issue as “the good, the bad and the ugly” of MEMS. The good is that there are plenty of predictions of strong compound annual growth rates (CAGRs) for unit shipments. In 2016 this could produce 16 billion shipments of MEMS units with an average selling price of $1, Abdi said.

Next: the bad and the ugly

The bad, Abdi said, is severe price erosion in all the significant MEMS product categories including: inertial combos, microphones, gyroscopes, oscillators and RF MEMS.

The ugly is that while semiconductors overall and MEMS in particular are forecast to have 2010-to-2020 CAGRs of less than 10 percent, the IoT equipment based on those semiconductors and MEMS are set to have a CAGR of between 30 and 60 percent.

“Our industry is creating such a lot of value but its all getting sucked up somewhere else,” Abdi told the delegates. Abdi flashed a slide showing that by 2020 a $1.4 trillion industry would be supported by a MEMS sensors market that would only register a few billion dollars. According to Yole Developpement estimates the annual MEMS market will be worth $20 billlion in 2020.

“Google is going to become a phone operator, laying down cable, selling phones. The Android phone is a collection of sensors. Android is a portal for making money on the data the service operator collects.”

Abdi added: “But ambient computing is necessary. You can’t clog up the bandwidth with raw data.” There needs to be local processing as well as processing on the edge of the network and in the cloud, Abdi said. “And that’s an opportunity.”

Fragmentation can hinder and help

Abdi said that fragmentation of the IoT market was also a double-edged sword. On the negative side because of the fragmentation and one product, one process, limitations of MEMS, it can take a long time to develop novel sensors. “By the time you hit the market the price erosion is killing you. Hence startups going bust,” he said.

On the positive side the fragmentation means that there are many markets to go after with end-to-end solutions that could be based on the same MEMS technology platform, Abdi said. In InvenSense’s case this platform is based on its proprietary technology approach for MEMS manufacturing, algorithms and software.

InvenSense bought Movea in July 2014 (see Audience, InvenSense buy up sensor fusion software firms ) to help it address sensor fusion and gesture recognition, a step on the way to Abdi’s vision of end-to-end IoT systems.

Next: One platform supporting multiple applications.


Abdi gave the example of a large set of IoT applications that are based on a knowledge of location, activity and context. “Drones are all about imaging and location. But you can’t send all the image data up to the cloud. It has to be processed locally. And even the drones market is fragmenting into different markets; security, farming, domestic, and so on,” Abdi said. “So think about the end product or service and think about participating in the value,” he told the conference delegates.

The Internet of Things with sensors value chain. Multiple markers supported by the same CMOS/MEMS platform. Source: InvenSense.

When challenged that if MEMS component companies try to expand up through the value chain might involve competing with and alienating systems companies who could boycott such companies as suppliers of MEMS components. “You do push and alienate customers. But most successful companies have done that,” said Abdi.

Related links and articles:

News articles:

Audience, InvenSense buy up sensor fusion software firms

InvenSense upgrades six-axis sensor motion processor

InvenSense adds multicore CPU to motion sensor

InvenSense claims 400 million 6-axis sensors shipped

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