The Analysis of Driving Force and Challenge of Emerging MEMS

Emerging market has great market potential in many fields. In the aspect of the rising MEMS sensor, its market is projected to account for 10% of global revenue in the coming five years, according to a report from Yole Développement.

Yole notes there are mainly three driving forces for the growth: smartphone, home care (medical application) as well as the Internet of things.

In developed regions, high-end smartphone shows the trend of saturation and slow replacement wave. By contrast, given by the huge population base, and the price cutting, mid- and low-end smartphone is finding large application in emerging markets, supporting the adoption of the necessity-MEMS sensor.

In recent years, medical application is undoubtedly hot spot, especially in emerging countries, due to the accelerated population aging, limited medical resources and medical reform in some countries. According to Transparency Market Research, medical MEMS market will amount to $6.5 Billion globally in 2019. Diagnostic, Monitoring, Therapeutic & Surgical, Sensor types are all the application segments.

But meanwhile, challenges also exist, Yole said.

First, the cost reduction is a big problem. Since most of the emerging MEMS companies are fabless start-ups that rely more on worldwide MEMS foundry capabilities. They deliver MEMS devices directly to commercial consumer markets, without going through the usual “small volumes” phase in niche markets (enabling progressive cost reduction and product maturation), causing the cost pressure.

Second: complex supply chain challenges. Consumer electronics can be ranked as the fastest replaced products. For manufacturers, to keep competitiveness and win market, fast innovation is necessary, so they pose requirements to provide fast process transfer, have fast yield improvement, and ensure full solutions from front-end to packaging.

The first challenge comes from technology. Emerging markets relatively lags behind developed regions in MEMS technology. After years of rapid development, even there are technologies, they are in the hand of large companies, resulting in many advanced MEMS components should rely on import.