IHS: China MEMS market eyes double-digit growth again
This will replicate vibrant growth for the second year in a row as MEMS usage continues to proliferate in the country's smartphones and tablets, according to the new 'China Electronics & Supply Chain' report from IHS.
Revenue for the China MEMS trade is projected to reach $2.46 billion by year-end, up from $2.06 billion in 2012. This year's increase is down just 1 percent from the hearty 20 percent expansion posted in 2012.
The next few years promise to bring steady and strong growth as well. By the end of 2017, China MEMS industry revenue will amount to $3.40 billion, equivalent to a five-year compound annual growth rate of 14 percent, dating from 2012.
With double-digit growth now for two straight years, the China MEMS market owes its success to the country's thriving wireless market because of smartphones and tablets. Here MEMS sensors such as accelerometers, gyroscopes and MEMS microphones are employed in functions including auto rotation, navigation and gesture control. This year the wireless sector alone will account for $933 million - or 38 percent of total China MEMS earnings.
In contrast, revenue won't be as strong in data processing and consumer electronics as both sectors this year are projected to decline again, similar to a downturn in 2012. In data processing, inkjet printers as well as projectors are suffering weak demand, impacting MEMS. In consumer electronics, gaming, digital still cameras and portable electronics like MP3 players have all been struggling against smartphones and tablets, likewise hurting MEMS.
Of the two toiling segments, however, consumer electronics is showing some potential for growth. High-quality voice control, gesture recognition and wearable electronics like smartwatches could drive the sector moving forward, and MEMS revenue could increase here in the double digits for the next few years if conditions prove right.
The other segments contributing to the China MEMS business are a moderately growing automotive electronics sector, a steady industrial electronics space, along with a tiny, near-negligible wired communications market.
MEMS in wireless devices are the star performers
In the vigorous wireless segment, MEMS microphones will be the top device this year in mobile handsets, prized for their capability to bring better voice performance and noise suppression in phones.
Gyroscopes, meanwhile, will be the main revenue generator in tablets, important for improved motion handling as well as for pinpointing accurate location.
A third device, the accelerometer, remains viable in both the smartphone and tablet segments, although total revenue is declining because of continually eroding prices. Average pricing for accelerometers, now considered a mature area in MEMS for handling device orientation, is set to fall to approximately $0.30 this year, down from $0.45 in 2010 and $1.30 in 2007.
An application of note in the China MEMS market is the toy aircraft space, where MEMS are used to operate the playthings by remote control. Toy airplanes are employed widely for enjoyment and play in China by children and adults alike, with the remote-control aircraft market generating high demand for MEMS gyroscopes in particular.
Local MEMS industry face challenges
While China is the world's largest producer of electronic devices in which MEMS are utilised, the domestic MEMS industry continues to be hobbled by a lack of scale in manufacturing and technical know-how.
But no local fabs possess any mass-production capabilities for MEMS manufacturing, and Chinese MEMS companies resort to leveraging global sources in order to complete production. And more often than not, wafer manufacturing is done overseas, with the product then finished at home via back-end manufacturing, packaging and local testing.
Recognising the gap in expertise between domestic Chinese makers and international brands, local governments have stepped in to support research.
The official moves, in turn, have resulted in the establishment of so-called MEMS industry incubators, such as the Suzhou Technology Institute for Nanotech Industry and the Wuxi Sensor Network International Innovation Park. Both are located on the country's densely industrialised eastern seaboard, close to the Shanghai conurbation.
