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May 19, 2003 — They say a little bit of know-how can go a long way. Advanced MicroSensors Inc. took a lot of know-how and went further — to revenues and growth in the MEMS business.

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Based in Shrewsbury, Mass., about 35 miles outside Boston, the company came into existence in April 1999. But it has much deeper roots in a cousin to MEMS: read/write heads for computer hard drives. With that understanding of how to manufacture microscale thin films, AMS gambled on the next logical step.

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“We knew all these processes … were ideally suited for MEMS,” said Al Sidman, chief technical officer and point man for all things MEMS at the company.

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Today, AMS makes various inertial sensors, magnetic actuators, signal isolators, inkjet printer heads and other MEMS devices; microelectronics accounted for roughly half of its revenue stream in 2002. Customers include Analog Devices Inc., Radant MEMS Inc. and other undisclosed companies.

How’s business? AMS is a privately held company and Timothy Stucchi, its chief executive, refuses to be specific. But he did say that overall revenues are growing at an average of 40 to 50 percent a year, operations are profitable, “and we expect to stay there,” he said. “We’re quite happy where we are.”

AMS traces its roots back to 1979, when Digital Equipment Corp. established a division to manufacture read/write heads. (Sidman was one of the founding engineers.) Digital Equipment moved the group to Shrewsbury in the late 1980s, and sold the division to Quantum Corp. in 1994. The group then became part of a short-lived joint venture with Panasonic in 1997, which unraveled one year later.

Advanced MicroSensors formally incorporated in 1999 with 45 employees. Its first customer was Analog Devices, which needed a digital signal isolator.

Sidman and Stucchi both credit the company’s MEMS success to its experience in building read/write heads. AMS engineers spent years refining their photolithography and wet-etching processes; the company can layer metal and polymers down to 0.5 microns thick, and make components with distinct features as small as 1 micron.

Stucchi and Sidman both agree that while MEMS might be a brisk business for AMS specifically, as a whole the technology is still a tough sell for customers. Buyers are skeptical about product failure, ease of volume manufacturing and cost benefit. Convincing them that MEMS can work — and work more cheaply than other technologies — is still a challenge.

“Even for us, we have a ways to go to assure these companies,” Stucchi said. “People also underestimate the power of old technologies. They innovate very rapidly.”

Today, the company has 72 workers. The company has raised nearly $12 million in venture capital, most recently an $8 million second round in November 2000. Stucchi has no immediate plans to raise additional cash.

John Maciel, chief operating officer for Radant MEMS, said he is leaning on AMS to help develop a prototype microwave switch that should be ready for commercial launch in about a year. “They’re very good. … They help us with our manufacturing process very much,” he said.

The Radant MEMS project is one example of what Sidman believes is the hot industry for microelectronics: radio frequency (RF) devices. “We’re getting a lot of interest in the RF space. … The volume for components will be high. The demand is real,” he says. Power conversion devices are also a growth area, he said.

Carl Rodia, an independent MEMS consultant in Connecticut, says he is not surprised that a company with read/write head experience can jump into MEMS so easily. “They’d be very familiar with conventional semiconductor manufacturing processes,” he said. “Seventy-five percent of [MEMS] is the same semiconductor stuff, but we’re adding more steps” such as extra etching or fill processes to shape components.

The trick, Sidman said, is consistency learned through experience. “We’ve made tens of millions of planar inductors,” he said. “The issue of volume manufacture is key… very few players can do it.”

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Company file: Advanced MicroSensors Inc.
(last updated May 19, 2003)

Company
Advanced MicroSensors Inc.

Headquarters
333 South St,
Shrewsbury, Mass., 01545

History
Although AMS was incorporated just four years ago, it stems from a Digital Equipment Corp. hard drive read/write head division created in 1979. The division was sold to Quantum Corp. in 1994, entered briefly into a 1997 partnership with Panasonic, and became its own company — Advanced MicroSensors — in 1999.

Industry
MEMS/MOEMS sensors and devices

Employees
72

Small tech-related products and services
AMS technology is applicable to data recording, signal processing, RF/optical communications, process control, automated testing and power conversion.

Management

Investment history
After garnering roughly $4 million in venture funding, AMS completed an $8 million second financing round in fall 2000. Participants have included Quantum Corp., Fitel Technologies, Lafe’ Holdings and AMS employees.

Selected strategic partners and customers

Selected competitors

— Research by Gretchen McNeely