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May 23, 2003 — OnStream Holding of the Netherlands, which makes wireless MEMS switches, has declared bankruptcy for the second time since it was spun off from Philips Electronics in 1998.
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OnStream’s management is looking at ways to restart its MEMS projects, and there are a few interested investors, according to OnStream’s curator, Louis Deterink, who was assigned by a court to take over daily management of the company. (This is comparable to the Chapter 7 bankruptcy procedure in the United States.)
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Just after its first bankruptcy in 2001, OnStream restarted with 240 of its original 400 employees separated into two companies: OnStream Data and OnStream MST. The first produced digital tape recorders, while the second produced thin film magnetic heads for the tape recorders, microsieves, and lately also RF (radio frequency) MEMS.
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In November 2002, OnStream MST announced a partnership with Coventor Inc. to mass-produce RF MEMS switches. At the time, Henne van Heeren — OnStream MST’s former business development manager — said test production would start in early 2003.
Last month, however, OnStream dismissed van Heeren and the rest of the 240 employees. The declining sales of OnStream’s tape recorders proved fatal for the entire company, according to van Heeren. “That’s a pity, because our RF MEMS and microsieves projects were quite promising,” he said.
Jean-Christophe Eloy, director of Yole Developpement, a French marketing consulting company for the MEMS industry, agreed with van Heeren on the technology’s potential, but said OnStream had a hard time finding financing for the long term.
Today, he said, MEMS foundries face structural problems. Yole’s studies show that there is overcapacity resulting from investments made in optical telecommunications, and in immature technologies or markets. Companies with operating losses have a hard time raising money. Consequently, some even had to close down. Among them were Optical Micro Machines (OMM), Transparent Networks and Standard MEMS. Others had to fire employees, like MEMSCAP, SensoNor and PHS MEMS, or had to sell their business altogether, like Motorola and JDS Uniphase. Consolidation of the business is now clearly on the way, Eloy said.
Nevertheless, Eloy is optimistic for the future. He expects the number of manufacturing facilities to grow, with strong investments in Europe, Taiwan and China. Some market segments are expanding very fast, especially in the automotive and medical field. Companies like Tronic’s Microsystems and Asia Pacific Microsystems are setting up new manufacturing facilities to respond to the increasing demand.
OnStream MST had a good deal of experience with metal processing. “Our RF MEMS technology was based on processes that have been in use for over 10 years,” said van Heeren. One of its unique features, he said, was the ability to integrate the main RF components — switches, tunable capacitors, micro-inductors and mechanical filters — on a single chip.
Kees Eijkel, technical commercial director at MESA+, a Netherlands institute that studies nanotech and microsystems, was also impressed with OnStream’s capabilities. “Perhaps silicon-based foundries like SensoNor or Colibrys were better known than OnStream MST, but in the field of metal microstructures, OnStream had developed a strong reputation.” And, he said, this is especially relevant for RF MEMS, which need metal layers for high performance. Companies with experience in silicon microstructuring should be careful not to expect results too soon when they enter the RF business, according to Eijkel. “They might overlook just how complicated it is to get the metal processes under control.”
Will the bankruptcy affect OnStream’s recently announced partner Coventor? Marlene Bourne, senior analyst with InStat/MDR, said it won’t. She pointed out that OnStream is just one of Coventor’s many partners. Bourne didn’t think the deal with Coventor was a big issue: “Many MEMS foundries have deals in place with one or multiple companies who provide CAD tools for design solutions.”
Besides RF MEMS components, the foundry worked on microsieves for filtration and fluid analysis.
The microsieves technology is based on wet etching, producing pores as small as 0.8 microns. Its design comes from AquaMarijn, a spinout from the University of Twente in the Netherlands. “The industry is quite interested in this product,” said Eijkel of MESA+. “For example, Grolsch — a large Dutch beer brewery — uses the microsieves in a pilot to reduce filtration costs.”
And the microsieves market is still growing, according to van Heeren, especially in the United States, where homeland defense and food safety are hot issues. Microsieves can also be used in analytical tools to detect the bacteria in biological weapons or contaminated food.
Meanwhile, van Heeren co-founded a MEMS/MST consulting company called Enabling M3. If no one decides to use the technology, Van Heeren will use it himself: “It’s just too promising to leave it for scraps.”