Analyst: MEMS sales slowing, demand shifting

April 18, 2006 – Sales growth for MEMS devices slowed dramatically in 2005 despite “very strong” unit shipments, with demand increasing for newer markets outside the mainstays, according to a new report by In-Stat.

Nearly 1.8 billion MEMS devices were shipped last year, accounting for just under $7.0 billion in revenues in 2005, the firm noted. The top 20 suppliers accounted for more than 86% of total sales.

Inventory backlogs, weakness in key markets, and lower average selling prices all factored into slowing sales, the firm noted. Thanks to price reductions and “commodity-like pricing” for new MEMS devices, revenues are projected to achieve about 6.8% compound annual growth rate (CAGR) over the next five years, barely half the 11% CAGR seen for unit shipments during the same period.

MEMS device demand also is expanding beyond traditional mainstay automotive and computing markets. The emergence of optical networking as well as integration of RF MEMS and microphones into cell phones is making the communications segment a key driver of overall MEMS growth, In-Stat noted.


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