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Aug. 30, 2002 — Even the most bullish small tech executive has taken the word “optimistic” out of his PowerPoint on prospects in optical networking. But an emerging side of the otherwise slumping telecom industry leaves room for confidence.
“You can generalize about the whole telecom market, but there are niches doing fairly well — those are the ones we’re targeting,” said Ben Naskar, president of Microlab Inc.
Microlab’s niche is radio-frequency (RF) MEMS, components that are designed to boost performance and reduce the size, cost and power consumption of cell phones and a range of electronic devices for consumer, industrial and military uses.
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Revenues in the RF MEMS sector are expected to grow from $2.5 million in 2001 to $200 million by 2006, according to a report released this week by In-Stat/MDR. “Wireless MEMS: Unleashing the Power of ‘Small,'” predicts strong growth, pushed by technological innovation and pulled by market need.
Combined with wireless MEMS sensors, the report said, the overall sector will grow from about $100 million last year to $850 million in 2006. Most of the sensor growth is expected to come from their use in tire pressure monitoring systems.
On the RF side, In-Stat revised last year’s report, which said revenues would reach $350 million by 2006. Part of the downshift is due to delays in integrating the technology in 3G, or the third-generation wireless network, but mostly it came from better information on pricing and volume from the RF MEMS makers.
“RF just basically emerged from the cave — last year it was still pretty much an idea,” said Marlene Bourne, In-Stat’s MEMS analyst. “There’s no question, either from the manufacturing standpoint or potential customers, that this is very exciting and has great potential.”
Microlab earlier this year launched its RF MEMS magnetic latching switch, which enables hundreds of elements currently found in a mobile device to be squeezed onto one chip. The chip can switch between components to operate at different frequency bands or communicate with different protocols — a useful trait for future “world” phones, which will have to contend with an increasing number of bands or modes.
Pricing and manufacturing — not performance — have prevented the technology from making it to market, but Naskar said his company is clearing those hurdles. Microlab is sampling its devices now, and is preparing for high-volume production by late this year or early next year.
“In the past, almost 80 percent of the cost has been associated with testing, assembly and the material cost of the package,” he said. “For the first time, we’re seeing high-volume packaging. That’s dropping costs, which is dropping the whole device cost.”
Naskar said Microlab also is investigating the test-equipment market, specifically in systems that test integrated circuits to make sure they’re operational. He said the IC industry currently uses an electromechanical switch that “looks like half a brick,” and an RF system could offer more performance in a small and cheaper package.
“I think this RF MEMS technology will be a key enabling technology … (for) a lot of end-user applications,” he said. “This is actually the start of a tidal wave.”
Bourne said the military likely will be the first growth area for RF MEMS because it supports lower volume, higher-priced devices for communication equipment. Once volumes are consistently high, she sees RF moving into test equipment, and sales will spike when cell phones integrate the technology.
One company looking at defense as a potential market for its first product is Teravicta Technologies, which announced in July it was sending out samples of its RF MEMS switch.
“It’s a good place to start with in introducing any new technology,” said Robert Miracky, Teravicta’s president. “You don’t want to immediately jump into a commoditized marketplace.”
Bourne said the growth of RF-based devices could help dispel the concern that MEMS have been dragged down in telecom’s spiral.
“People see the headlines … and conclude that MEMS is done in,” she said. “Therein lies the beauty of the MEMS industry. For every market segment that is struggling … there is another one succeeding, by sheer virtue of the diversity of the products in the market.”