May 1 2008
Although revenues for MEMS (micro-electro-mechanical systems) reached record levels in 2007, aggressive price reductions, legal wrangling, and rising pressure from competitive technologies took their toll on the MEMS industry, according to Bourne Research LLC. The market research firm reports that while sales of sensors for industrial automation surged, it wasn't enough to make up for significant revenue shortfalls in other core segments. Revenues for MEMS as a whole rose just 5.8% in 2007 to $8.6 billion, and the outlook is mixed.
"The consumer electronics market, particularly cell phones, is a double-edged sword," said Marlene Bourne, president & principal analyst of Bourne Research. "One can't argue with the lure of a billion unit market, and the rush to reduce MEMS prices to ever-lower levels will indeed open the door to more applications, but at what cost?"
Bourne cautions that the resulting "commoditization" of MEMS sensors may result in near-term revenue paralysis since unit shipments currently aren't sufficient to offset the lower prices. Those in the know have already turned their attention to industrial automation, and the combined use of GPS, RFID and MEMS sensors are projected to find the greatest traction in commercial equipment. Tellingly, five of the top ten suppliers of MEMS devices are leaders in industrial sensing - most of whom are missing from other widely publicized rankings.
The 2008 MEMS Forecast is the 8th consecutive annual forecast/market assessment personally developed and written by Marlene Bourne, a highly respected industry analyst who published her first MEMS forecast nearly 15 years ago. The report also found that:
Declines in automotive production, saturation of the consumer ink jet market, and a change in direction for digital TV - the three largest revenue streams for MEMS - will continue to have a dampening effect on revenue growth for the next few years.
The shift from televisions to "pico-projectors" is rapidly evolving (as is the competition), and optical networking is making a comeback. RF MEMS may reach a turning point in 2009, but as with microphones, there are inherent business model problems.
MEMS suppliers must not dismiss the impact nanomaterials are starting to have on this industry - both from a complementary and competitive perspective.
Despite a few bright spots, overall near-term growth is projected to remain negligible. Unit shipments of MEMS devices are forecast to increase at a CAGR of 6.4% through 2012, with revenues forecast to increase at a CAGR of 5.5% during the same period.
The report, 2008 MEMS Forecast, details venture capital funding for 2007, provides a definitive ranking of MEMS suppliers based on actual 2007 revenues, and outlines growth opportunities and challenges over the next five years, including specific examples of nanotechnology's impact. The forecast includes unit shipments and revenues by major device category and end-use market through 2012.
Some of the companies highlighted in the report include: Analog Devices, Avago Technologies, Dell, FLIR Systems, FormFactor, Freescale Semiconductor, Emerson Electric, GE, Hewlett-Packard, Honeywell, Illumina, Infineon Technologies, Kodak, Microvision, Qualcomm, Schneider Electric, STMicroelectronics, Texas Instruments and Yokogawa.
The 2008 MEMS Forecast is priced at $3495; members of the MEMS Industry Group are eligible for a 10% discount. For more details, or to obtain a table of contents, please contact Bourne Research at 480-695-0521.