Last week, the MEMS Industry Group (MIG) presented their most recent outlook on the market for microelectromechanical systems (MEMS), paying particular attention to mobile and consumer MEMS. The reason for the drill-down presentation is that forecasts for the hot MEMS sector, which has maintained strong double-digit volume and revenue growth, is likely to slow by 2015 as CE markets decelerate.In their presentation, MIG detailed that MEMS has experienced a roughly US $1 billion year-over-year growth market, or roughly 11% compound annual growth rate (CAGR), compared to the overall semiconductor market which experienced only 1.4% growth in 2011. However, the forecast for MEMS post-2015 begins to look much more like semi in general as penetration slows for MEMS in consumer end-products, especially in current MEMS auto, tablets, smartphones, and gaming devices. The leading devices that drive MEMS market share growth are the consumer and mobile MEMS, notably for tablet PCs and smartphones. As these devices begin to see sales slowdowns based on initial penetration and then moving to refresh cycles, the forecast for MEMS correlates directly and will slow as well.
According to MIG, further affecting MEMS pricing trends is that two-thirds of MEMS are purchased by just two OEMs, Apple and Samsung. This odd fact dictates the pricing structure in two ways. Firstly, as these two OEMs' products fluctuate through penetration and ASP cycles, so follows the bulk of MEMS volume growth and ASP changes. Secondly, the level of purchasing power held by only two OEMs significantly skews the competitive ASP and volume access landscape within the MEMS sector.
Long-term MEMS forecasting by MIG raises significant questions about the loci for the next growth wave. MIG's models show that by 2015, MEMS will be growing at the more matured component pace that we see in semi overall, that is, roughly 5-7%. As MIG explained, this decelerating curve is in parallel with the automotive semi and auto MEMS sector growth trends, and so the validity of the model is further strengthened, giving good cause for next growth wave questions and search for the next drivers.
The remaining question outlined by MIG for the MEMS market, while enjoying strong growth through 2014, is what will be the next "killer application" for MEMS, that is, the next hot device that will leverage MEMS components and drive the next wave of growth for this exciting market sector.