Thursday, July 05, 2012:
MEMS will continue to see steady, sustainable double digit growth for the next six years,with 20% compound average annual growth in units and 13% growth in revenues, to become a $21 billion market by 2017. That’s a slight slowdown from the industry’s 17% jump in 2011, as the initial rush of adoption of inertial sensors in smart phones cools a bit, inertial sensor prices continue to fall, and demand for inkjet heads slips a bit more. We expect continued strong growth in motion sensing and microfluidics means those sectors will increasingly come to dominate the MEMS market totals, making up almost half of the overall market in 2017, with accelerometers, gyros, magnetometers and combos accounting for about 25% of the total, and microfluidics for 23%.
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Strong growth to continue in inertial sensors, 3-axis gyro remains the hot consumer product
There’s plenty of room for the motion sensor market to grow for at least the next three years, as penetration increases in growing end markets, for a $5.2 billion opportunity by 2017. But competition, falling prices, maturing markets and increasing integration also mean overall CAGR in this large market will be held to about 8%.
On the consumer side, accelerometers are already in almost all smart phones, but the overall cell phone market is still growing quickly, projected to grow by another 1 billion units by 2017. More of these phones will also be smart phones, the total likely doubling from 450 million to 900 million within the next three years, and MEMS are also now starting to be designed into more feature phones as well. The penetration of gyros jumped from 9% of smart phones in 2010 to 36% in 2011. Within two to three years, however, every smart phone will have a gyro.
Many phones may in fact start to have two gyros, as phone makers increasingly see image stabilization as a key way to differentiate their products with better photo quality. InvenSense targets the camera module suppliers with for its precision gyro for image stabilization, arguing it makes things easier for the phone maker. STMicroelectronics offers a dual core solution instead, with both a high precision sensor for image stabilization and one more suited to gaming in a single package, but as this requires a more complex ASIC it may not necessarily be the cheaper solution.
AKM still dominates the magnetometer business with some 78% market share with its Hall-based device, and tight integration into the InvenSense modules and software. But other suppliers, from STMicroelectronics and Robert Bosch to MEMSIC, argue that their alternative technologies are more accurate and use less power, and that they can better integrate the devices they make themselves.
The market for combo sensors started in 2011, with 6-axis accelerometer and magnetometer combo units with a single ASIC shipped in volume, and 6-axis accelerometer and gyro units now starting to do so as well, often for only a small additional cost for the accelerometers. Stand alone components are still by far the biggest business, but in two to three years successful companies will be selling 6X or 9X devices.
To better track these important developments, we have broken out a separate category for combo sensors in our market data and forecasts this year. We believe that the market for discrete sensors will begin to decline, but the growth for combo solutions will be huge. Though currently less than a $100 million niche, we expect combos to be a $1.7 billion opportunity by 2017.
Microfluidics on fast growth path, to $4.8 billion in 2017
Though development has taken a bit longer than originally expected, the microfluidics market is now poised for strong 23% compound average annual growth. We project that demand for fab-level microfluidics devices (without chemistry) will reach some $4.8 billion in 2017, accounting for some 20% of total MEMS demand, to become the second largest sector of the industry. Major investment from big players is pouring into the field, producers from other large volume polymer industrial markets are bringing their sophisticated volume polymer manufacturing technology to the business, and major suppliers are ready to introduce elegant new commercial solutions for low cost, fast response microfluidic screening and diagnostic tests that provide real benefit. Biggest growth will be for ongoing screening of food and water quality, but the clinical laboratory testing, point-of-care diagnostics and pharmaceutical research applications are also poised for strong increases.
Optical MEMS and pressure sensors headed to >$2 billion markets
Optical MEMS should outpace the overall market with 16% CAGR, to reach $2.6 billion by 2017. The projection market remains the main driver, but the emerging pico projector market made real progress this year, with embedded cellphone prototypes from major players being widely demonstrated. DLP technology now dominates over LCOS, but laser-based systems should start to see improvement now that fi rst direct green lasers have started sampling, though their need for two large ASICs brings size and cost issues.
MEMS is also increasingly taking over the telecommunications switch market, both ROADM and VOA. Autofocus components have taken somewhat longer than anticipated to reach the market, but they now have potential for quick adoption, with Polight and Tessera readying for production. We expect continued steady growth in demand for pressure sensors, for automotive applications, and also increasingly for cell phones for indoor navigation and location information services, to total 8% CAGR to $2.2 billion by 2017.
RF MEMS to reach $1.0 billion level
The market for RF MEMS switches and tuners is also heating up, with the fi rst cell phone incorporating tunable RF MEMS from WiSpry hitting the market last year. Opinion is divided over how widely this technology will be adopted, but we take an intermediate view that there is indeed big potential for antenna tuners and other tunability in 4G phones, but MEMS will likely get only a part of this market. Paratek has also shipped a first device to Samsung, using a competing non-MEMS technology based on a thin fi lm dielectric with variable capacitance. RIM’s recent purchase of Paratek suggests RIM sees it as a strategic component in the next few years. Peregrine is shipping competing silicon-on-sapphire products as well, and SOI alternatives could also have potential. Other big MEMS players could also enter the market.
We see growth in the silicon MEMS oscillator business starting to accelerate as well. This conservative and fragmented timing market has been slow to adopt the new devices, but the technology is steadily gaining credibility. SiTime sales are likely to keep on their fast track, and major players NXP, SiLabs, VTI and Sand9 expect to enter the market this year.
We expect RF MEMS, including these switches and variable capacitors, silicon MEMS oscillators, and BAW filters and duplexers, to see 16% CAGR to a $1.0 billion MEMS market by 2017.
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