In Taiwan Manufacturers Move into MEMS market we noted that TSMC, UMC and ASE were all moving into the micro-electro-mechnical system (MEMS) market sector. In TSMC Increases Their CAPEX we noted TSMC were upgrading their 0.35 micron processes to be able to accomodate MEMS systems.
Reuters noted yesterday that the growth of the MEMS market due to the rapid adoption of motion sensor chips in the Wii gaming devices and the Apple iPhone has provided an increased incentive for the world's chipmakers to jump into the market. Reuters notes TSMC had sat on the sidelines of this sector for sometime but has now jumped into the market, confirming the earlier reports. Reuters observes:
Chip makers are convinced of the potential for motion sensing chips in portable gadgets, thanks to the success of Nintendo's Wii game consoles and Apple's iPhones.
The market for micro-electro-mechanical systems (MEMS) devices, which detect motion using acceleration sensors, could reach $7.3 billion this year and $11 billion by 2011, Taiwan chip maker TSMC has said, quoting independent research.
However, although there is growth opportunities in this sector, the sector is still small. Reuters writes:
In dollar terms, the MEMS market is still relatively small for firms that generate billions of dollars in revenue each year. But potential growth is triple that of the meager 4 percent rise that TSMC projected for the entire $280 billion semiconductor market this year.
But with chip manufacturers facing a downturn in demand for memory and logic chips, the growing use of motion sensing devices in mass market gadgets, such as phones and music players, offers a chance to boost sales.
At its annual technology symposium in May, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's top contract chip maker, featured MEMS as among the most promising new technologies.
"TSMC sat on the sidelines for several years but now appears convinced that MEMS is ready for prime time with consumer electronics and mobile applications," iSuppli analyst Richard Dixon said.
"Following iPhone's lead, which put motion sensing to the core of the stunning display, we expect to see (MEMS) mobile phones rapidly expand as manufacturers scramble to differentiate with similar functions."
NEW DEVICES
TSMC, which has started making MEMS chips for Analog Devices , could see the business make up 10 percent of its total sales this year, with the ratio growing to 20 percent in the next 2-3 years, Taiwan's Topology Research said.
Rival United Microelectronics Corp (UMC) is also reportedly preparing to supply similar chips later this year or next, although the company declined to comment.
MEMS suppliers that traditionally made most of their revenue in the automotive sector have reached the limits of capacity, and many have chosen either to upgrade their manufacturing technology, like STMicro or Freescale, or to subcontract out production, iSuppli's Dixon said.
In an interview with Tech-ON, the head of TSMC's MEMS business Robert Chin-fu Tsai discussed TSMC's movement into the sector. Mr. Tsai said:
MEMS output is about 4,000 chips per month at both Fab2 and Fab3. Considering that the output capacity of both lines is slightly more than 100,000 chips per month, MEMS production accounts for a tiny portion at the moment. This amount will expand rapidly, however, in the second half of this year.
The number of MEMS devices to be mass-produced will increase all at once from late 2008 to early 2009. Among the multiple MEMS projects we are currently conducting, three will enter the volume production phase within 2008 and one in early 2009. In accordance with this schedule, the ratio of MEMS production is likely to increase at Fab2 and Fab3 first.
This is another new sector for Taiwanese companies and once again they are leveraging their pure-play foundry strengths to establish a dominant position.
Reuters: Chip makers get moving with motion sensing chips
Tech ON: TSMC Discusses MEMS Foundry Biz
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