News Article
Impact Of The Economic Crisis On MEMS Market
It is very clear that the current economic crisis is already having a strong impact on automotive business. As such, the MEMS automotive business will certainly remain flat in 2008 compared to 2007 at $1.3B.
Key actors have extremely low visibility on Q1 and Q2 2009 and we can expect 2009 business to decrease by 10% to B$1.03. As an example: for 2008 we were anticipating unit sales of 238 million pressure sensors and 224 million accelerometers; in our re-forecast we have modified unit sales to 204 million pressure sensors and 166 million accelerometers for 2008 and 190 million pressure sensors and 157million accelerometers for 2009.
Applications with strong growth due to legislation (e.g., TPMS, electronic stability systems) or those gaining market share on existing non MEMS technologies will be less impacted compared to the established MEMS automotive applications such as MAP-BAP and airbag sensors.
The fragile players with limited cash will be severely impacted. Most planned investments for 2009 are cancelled or postponed at the moment, with no vision on when they will restart.
The impact on the consumer business is less clear and Yole Développement will continue working on this market forecast in the coming weeks. What we can say at the moment is that Q4 2008 is scheduled to be soft by most of the companies involved in consumer electronics. Our assumption is that Christmas inventories are already manufactured and shipped along with some Q1 orders as well. With an expected drop in sales for the Christmas period, inventories will grow resulting in a slow start for 2009. Yole expects that consumer related MEMS sales in 2008 will reach $3.26B compared to an expected $ 3.6B (8% growth compared to 16% growth expected).
So Q1 and Q2 2009 will certainly be weak (due to lower sales over the Christmas period as explained earlier), with the consequent impact on inventories we are expecting 5% growth in 2009 (compared to 16% originally forecast), with a total MEMS consumer market reaching $3.44B.
Other markets seem to be less affected at the moment. However, we know Telecom may suffer with Nokia announcing it will miss its 2008 target with 1.24 billion mobile phones instead of 1.26 billion units. For Nokia and Vodaphone the telecom market will suffer much more in 2009 than it did in 2008. Even if innovation and new products will keep a good level of activity, the slowdown will certainly affect the volumes and could impact prices.
Jean Christophe Eloy went on to say “The total MEMS market will reach $ 7.6 billion in 2008 and will still reach $8 billion in 2009. The crisis will and MEMS foundries deeply impact equipment manufacturers.”
The MEMS production infrastructure is undergoing 2 key changes: Transition from 6'' to 8'' wafer size for the companies involved in high volume MEMS applications Strong growth of the MEMS foundry markets, benefiting from the development of the fabless companies and the start of production outsourcing by major MEMS manufacturers.
While this evolution is irreversible, many projects will be delayed. The MEMS market is still very fragmented in terms of companies and products and the MEMS business will be less affected compare to the semiconductor industry. As a first conclusion, we can say that “The impact of the downturn will be important in 2008 ($500M of business will disappear) and very important in 2009 ($1.5B off). But at YOLE Développement we believe that the business will be able to recover between now and 2012 to reach $15B to $16B for the worldwide MEMS markets. The number of new applications remains very important and these are mainly gaining market share on existing technologies, bringing lower costs, more integration, more and new functions. As always in a downturn, the winners at the end will be the companies that have been able to invest in innovative devices, deliver new functions and new applications. So the race for innovation will just increase”
Applications with strong growth due to legislation (e.g., TPMS, electronic stability systems) or those gaining market share on existing non MEMS technologies will be less impacted compared to the established MEMS automotive applications such as MAP-BAP and airbag sensors.
The fragile players with limited cash will be severely impacted. Most planned investments for 2009 are cancelled or postponed at the moment, with no vision on when they will restart.
The impact on the consumer business is less clear and Yole Développement will continue working on this market forecast in the coming weeks. What we can say at the moment is that Q4 2008 is scheduled to be soft by most of the companies involved in consumer electronics. Our assumption is that Christmas inventories are already manufactured and shipped along with some Q1 orders as well. With an expected drop in sales for the Christmas period, inventories will grow resulting in a slow start for 2009. Yole expects that consumer related MEMS sales in 2008 will reach $3.26B compared to an expected $ 3.6B (8% growth compared to 16% growth expected).
So Q1 and Q2 2009 will certainly be weak (due to lower sales over the Christmas period as explained earlier), with the consequent impact on inventories we are expecting 5% growth in 2009 (compared to 16% originally forecast), with a total MEMS consumer market reaching $3.44B.
Other markets seem to be less affected at the moment. However, we know Telecom may suffer with Nokia announcing it will miss its 2008 target with 1.24 billion mobile phones instead of 1.26 billion units. For Nokia and Vodaphone the telecom market will suffer much more in 2009 than it did in 2008. Even if innovation and new products will keep a good level of activity, the slowdown will certainly affect the volumes and could impact prices.
Jean Christophe Eloy went on to say “The total MEMS market will reach $ 7.6 billion in 2008 and will still reach $8 billion in 2009. The crisis will and MEMS foundries deeply impact equipment manufacturers.”
The MEMS production infrastructure is undergoing 2 key changes: Transition from 6'' to 8'' wafer size for the companies involved in high volume MEMS applications Strong growth of the MEMS foundry markets, benefiting from the development of the fabless companies and the start of production outsourcing by major MEMS manufacturers.
While this evolution is irreversible, many projects will be delayed. The MEMS market is still very fragmented in terms of companies and products and the MEMS business will be less affected compare to the semiconductor industry. As a first conclusion, we can say that “The impact of the downturn will be important in 2008 ($500M of business will disappear) and very important in 2009 ($1.5B off). But at YOLE Développement we believe that the business will be able to recover between now and 2012 to reach $15B to $16B for the worldwide MEMS markets. The number of new applications remains very important and these are mainly gaining market share on existing technologies, bringing lower costs, more integration, more and new functions. As always in a downturn, the winners at the end will be the companies that have been able to invest in innovative devices, deliver new functions and new applications. So the race for innovation will just increase”
