By Howard Lovy, Small Times contributing editor
MEMSIC hopes its accelerometers will be in high demand. (Photo: MEMSIC) |
October 10, 2007 — You won’t find any products by MEMSIC Inc. inside the popular Nintendo Wii game systems. But that doesn’t matter when it comes to a decision by the Andover, Mass.-based MEMS developer to file for a $100 million initial public offering. Just the fact that MEMS are at last making it into mainstream consumer applications is enough to spur the company into the public market. “I would say it’s a good time for the IPO just because of the interest coming in,” says Prashanth Venkatesh, a senior research analyst with Frost & Sullivan, a global growth consulting company.
MEMSIC, which makes MEMS-based sensors, accelerometers and systems, plans to trade on the Nasdaq under the ticker symbol MEMS. And although MEMS and MEMSIC have been around for some time, Venkatesh says that the next couple of years will see an increase in investor interest in companies like MEMSIC that develop the technology behind some of the hottest-selling consumer products, such as the Wii or the new Apple iPhone, which uses a MEMS accelerometer to change the user’s view from portrait to landscape.
“I think five years back, if you actually looked at the mobile phone segment, you only had accelerometers and MEMS being used in places like Japan and South Korea,” Venkatesh says. And, aside from those markets, MEMS have been associated largely with automotive airbags.
Now, Venkatesh says, a couple of things are happening in both markets that are making investors take notice: MEMS are getting hot inside mobile phones sold in the West; and MEMS-enabled airbags are making their way into the largely untapped markets of China and India. In the West, other companies are firmly entrenched in the automotive airbag markets, but it is still wide open in developing countries.
In addition, MEMS-enabled stability controls behind airbags are going to become required standard features in the United States, further enhancing the potential for “huge growth in the short term,” Venkatesh says.
Citi will be the lead underwriter, and the MEMSIC offering is based on 33,961,429 shares outstanding as of June 30, including 28,121,639 shares of common stock to be issued upon automatic conversion of all its outstanding shares of preferred stock. MEMSIC launched in 1999 and began to generate revenue in 2001.