MEMS Market Attracting more Players

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

TSMC Increases Their CAPEX

EE Times writes TSMC has decided to expand their CAPEX for to develop their 45 nm and 40 nm processing technologies. Some of the CAPEX will also be used to upgrade their equipment. EE Times writes:

The board of Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) has approved a $795 million capital spending plan that includes a push into 45-/40-nm CMOS processes and MEMS.

The spending is part of TSMC's previously-announced capital expenditure budget for 2008. For year 2008, total capital expenditures for TSMC is expected to be around $1.8 billion, compared with $2.6 billion spent in 2007.

On the leading-edge front, silicon foundry giant TSMC said it has approved the appropriations of $687.60 million to expand its 45- and 40-nm manufacturing capacity within its 300-mm fabs. TSMC recently rolled out these processes.

The company has also approved capital appropriations of $107.40 million in 200-mm fab equipment. It will upgrade a portion of its 0.18-micron logic process capacity to 0.11-micron CMOS image sensor technology, 0.11-micron logic, 0.13-micron high voltage, and 0.18-micron RF.

EE Times also notes TSMC's expansion into the Microelectromechanical System (MEMS) fabrication (we previously commented on this in Taiwan Manufacturers Move into MEMS market). According to EE Times:

In addition, the appropriation will also be used to upgrade a portion of its 0.35-micron logic process capacity to MEMS processes.

TSMC (Hsinchu) has been involved in MEMS foundry production for some time, but the company is expanding its efforts in the arena--and for good reason: MEMS is growing at an annual rate of 13 percent, according to the company.

Within its fabs, the company is devising several MEMS products on a foundry basis for customers, such as inkjet devices, sensors, RF MEMS and displays. It is developing several processes in the arena, such as bulk MEMS, surface MEMS and a CMOS-MEMS integration technology.

Unsurprisingly UMC, TSMC's main competitor, is also jumping on the MEMS bandwagon.

EE Times: TSMC hikes capex for 40-nm, MEMS

Taiwan Manufacturers Move into MEMS market

More and more Taiwanese semiconductor companies are moving into the micro-electromechanical system (MEMS) market. What is MEMS? MEMS and Nanotechnology Clearing House say the following:

Micro-Electro-Mechanical Systems (MEMS) is the integration of mechanical elements, sensors, actuators, and electronics on a common silicon substrate through microfabrication technology. While the electronics are fabricated using integrated circuit (IC) process sequences (e.g., CMOS, Bipolar, or BICMOS processes), the micromechanical components are fabricated using compatible "micromachining" processes that selectively etch away parts of the silicon wafer or add new structural layers to form the mechanical and electromechanical devices.

The China Economic News (CENS) reports:

In light of increased availability of micro-electro-mechanical systems (MEMS), heavyweight Taiwanese chipmakers are competing for an advantageous position in the market.

Asia Pacific MEMS System Corp., in which United Microelectronics Corp. (UMC) holds dominant stakes, recently announced it would contract UMC to make its products designed on sub 0.35-micron processes.

Taiwan Semiconductor Manufacturing Co. (TSMC), currently the world`s No.1 pure silicon-foundry supplier, has begun using its 150-mm and 200-mm fabs to make MEMS used in inkjet heads of printers after starting to make contact image sensor (CIS) in cooperation with Omni Vision Inc. TSMC plans to shoot for foundry orders for radio-frequency MEMS and digital mirror device (DMD) next year.

Advanced Semiconductor Engineering (ASE) Inc. has won considerable orders to test and package automotive sensor devices, RF-MEMS modules, biochips, and silicon-based microphones in cooperation with subsidiary Universal Scientific Industrial Co., Ltd. for Nordic, VLSI, austriamicrosystems AG, and Medtronic. Industry watchers note that MEMS accounts for around 50% of packaging and testing costs.

For a long time, MEMS technology has been mostly applied to automobiles and industrial equipment. Recently, it has been increasingly built into consumer electronics like mobile phones and game consoles. Apple iPhone and Nintendo Wii are two typical consumer applications of the technology.

Demands for MEMS devices have surged sharply along with brisk growth of consumer-electronics market. Besides foundries TSMC, UMC and ASE, IDMs Texas Instruments (TI) and Sanyo have also entered MEMS market.

And according to Digitimes, both UMC and TSMC are bidding for contracts with Invensense, the world leader in motion sensing solutions for mobile devices. Digitimes says:

Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corporation (UMC) are said to be geared up to bid for micro electro-mechanical system (MEMS) orders from InvenSense, with their respective backend solutions also being prepared, according to industry sources.

The sources indicated that leading MEMS gyroscope supplier InvenSense plans to outsource its front-end CMOS production to foundries in Taiwan, which has spurred the two leading pure-play foundries to compete for the potential orders.

Actually over the past while we have been reading more and more about MEMS. As the CENS articles says, MEMS have been around for a while but the rate of adoption is increasing quickly and more and more MEMS are being applied in consumer electronics. This will definitely provide Taiwan semiconductor companies with more opportunity to expand their market and product offerings. Both UMC and TSMC are ready to provide the fabrication facilities needed. This is another emerging market sector that will be interesting to watch over the next while. We will keep you posted!

MEMS and Nanotechnology Clearing House: What is MEMS Technology?
China Economic News: Taiwanese Chipmakers Venture Into MEMS Segment
Digitimes: TSMC and UMC bid for MEMS devices orders from InvenSense