MEMS market declines 2%

Hewlett-Packard was still the number one company producing microelectromechanical (MEMS) devices during 2008.

However, overall sales of the top companies making MEMS decreased by 2% last year, according to Yole Developpement, a European specialist research and consulting company in the MEMS field.

In 2008, the MEMS market saw significant changes in the ranking of the top 30 MEMS companies:

• STM has become, for the first time, the third MEMS manufacturer by $ revenue in 2008;
• Delphi and Sanyo are moving out of the top 30 MEMS ranking;
• Kionix and IMT are entering the ranking for the first time;
• IMT is again the world leader in the independent MEMS foundry business;
• HP and Texas Instruments, despite decreases in sales, are still numbers one and two in the ranking.

Last year revealed unusual movement in the industry: 18 companies have shown growth ($ revenue) in 2008 compared with 2007, with Kionix leading the way with 70%, and also Measurement Specialties, STM, Panasonic and Murata.

Twelve companies have shown a decrease in sales ($ revenue) in 2008 compared with 2007 (in addition to Sanyo and Delphi leaving the ranking), with FormFactor, Silicon Sensing Systems and Lexmark showing the largest decrease in sales.

The economic crisis has definitively had an impact on MEMS companies’ financial results, specifically during the last quarter of 2008. But this impact is very different according to the various MEMS players’ markets.

The motor vehicle business has been most dramatically affected by the downturn. In terms of units: some 10–20% down over previous years.

Some companies have suffered less than others (as is the case for Robert Bosch, for example) but all of them are affected.

The impact is also different according to the maturity of MEMS products. Established devices such as airbag accelerometers are suffering more than emerging devices eg, transaction processing management systems (TPMS).

The consequences in consumer markets are also different, depending on the MEMS products. Manufacturers of ink jet heads (IJH) are suffering a lot, with a decrease of about 15% for 2008.

On the other hand, inertial MEMS products for the consumer market are still growing with some players (eg, STMicroelectronics and ADI) showing good results.

Highlights of 2008 were: IJH players are dramatically impacted with a decrease in both sales and units (this is the case for HP and Lexmark, the latter undergoing the strongest decrease for IJH).

However, HP is still the number one MEMS company for 2008.

Texas Instruments has seen a decrease in its DLP chip sales of about 13% (in US$) and, due to its growth of the consumer market, STMicroelectronics’ business had a profitable 2008 with US$200m for its accelerometer business (twice 2007 sales). The company moved from 4th position in 2007 to 3rd in 2008.

Although it is probably the motor vehicle MEMS player performing the best in 2008, Robert Bosch underwent a -10% decrease in euros compared with 2007. Its 8" fab is now ready but production will start only when economic conditions improve. So Bosch is moving from 3rd position in 2007 to 4th in 2008.

This year, Sanyo and Delphi have disappeared from the 2008 ranking: Sanyo has stopped its foundry activity and Delphi has reduced its MEMS staff. We believe that only development/assembly will be kept.

For the future, says the report, the crisis will come to an end only when device stock levels fall. Some information from Taiwanese players seems to indicate a restart of semiconductor production.

Although it could also be the case for MEMS, Yole believes that 2009 will be a flat year for the market.

Yole Developpement