Consumer MEMS Growth?
May 24, 2012, MEMS Business Forum, Santa Clara, CA—Jeremie Bouchard, director and MEMS analyst at IHS ISuppli talked about MEMS and consumer tends. At issue is the possibility for long-term growth in an industry that is starting to see longer term price erosion.
Currently, the big drivers for sensors are consumer and mobile, which are projected to grow at a CAGR of 18 percent through '16. The mobile market includes smart phones and tables, and as yet unreleased new devices. All of these devices will have multiple sensors for motion, sound or air pressure, and more.
Motion sensors will be a $2B market by '16 and the basic 3-axis sensor will upgrade to a 9-axis one driving the needs for better sensor fusion software. The next generation of sensor arrays will have better resolution, faster response times, and lower power. The good thing for new companies is that the total number of suppliers will increase, as some vendors will focus on specific segments.
The ecosystem will need integrated software solutions to support the dedicated cores and ASICs. The sensor cost reductions will enable many other apps, such as multiple microphones for noise reduction, or RF switches and varactors to run the radios. Although MEMS have competition, the alternatives in RF are likely to remain more costly.
The markets are already starting to flatten out, and by '16, growth will only be about 5 percent a year. The big question will be is price or equipment functionality the driver? Already, some of the markets are saturating. Growth in gaming saturated about '08, and gyro growth flattened out in '10. Motion sensors in mobile handsets in now in the single digits, and tablets started with a 90 percent growth rate, dropping to less than 10 percent in '16.
In the past, the drivers and milestones were in automotive, gaming, and phones. The next generation will come from mandates for stability control in the BRIC countries with a TAM of $460M. Germany is calling for diesel particulate filters and associated sensors with a $225M TAM in '18. Unfortunately, non-MEMS sensors will populate the Internet of Things.
Potential new markets include drug delivery and monitoring systems, environmental and biological sensors (possibly even in handsets), and energy scavenging. Environmental and biological sensors will have many apps, and coupled with communications, could offer the rest of the world low-cost advanced medicine. A set of sensors in your phone could infer state of mind through sensors for skin conductivity, heart rate and respiration.
The market for sensors will continue to grow for a long time, but the growth rates will drop to the low single digits in '15. Even though the overall industry will be looking at replacement cycle growth rates, there will be opportunities for some companies to grow much faster than the overall market. New products will need advanced technologies and market pull to be successful. Most big companies now assume a need for sensors in their products. The new technologies need to be ready for the next iPhone. The innovators need to create new functions that solve problems.