The killer application that may eat its siblings
03/01/2001
MST/MEMS
J. Eric Gulliksen, Venture Development Corp., Natick, Massachusetts
More than 20 years ago, researchers found that selective doping and etching techniques could be used to fabricate 3-D structural elements on a silicon wafer. Shortly thereafter, they realized that the use of "sacrificial" layers, which enabled the undercutting of selected wafer elements, allowed these elements to "float" above the surface of the substrate. Their findings led to the development of microstructures technology (MST) and its subset, microelectromechanical systems (MEMS).
Despite being hailed as a revolutionary enabling technology, MST has only achieved significant success in certain niche applications. Hard disk drive (HDD) heads, which are produced through MST techniques, are the most prevalent and comprise, at present, the largest dollar volume.
True MEMS devices, which include moving or deformable parts, have, until now, been largely limited to ink jet printer cartridges and heads, inertial measurement sensors (accelerometers, microgyroscopes), and process/environmental variable sensors (for pressure, flow, etc.).
Forward-thinking researchers and companies have investigated, with some success, diverse areas such as MEMS memory and display devices, microrelays (including RF), and a host of MST/MEMS-based medical and analytical devices. Commercialization has, however, been somewhat limited. The industry as a whole has been anxiously awaiting the emergence of a "killer" application that would allow the technology to realize its full potential.
It's here, and "in spades"
The emergence of a true "killer" application is driven by demand at a grass-roots level, not by technological breakthrough. For example, the demand by gamers for faster, more powerful machines with increasingly realistic graphics capability causes the computer hardware industry to continuously strive to reach new heights in performance. (Business or "casual" users, in general, don't require >1GHz processors or 3-D graphics.)
 Market projections — MST/MEMS optical switching devices. |
Despite the "dot-com meltdown" and the apparent fallacy of the "new economy," "Dick and Jane Consumer" demand quicker-loading, faster-response, streaming audio and video, 3-D graphics, and the like, to enhance the entertainment value of their Internet experiences and to reduce frustrations. This necessitates improved, high-speed (broadband) Internet access, presenting MST/MEMS technology with a huge opportunity. It has accelerated the global implementation of optical communications networks which, in turn, has created an unprecedented need for optical switching and routing devices. Although other technologies wait in the wings, MST and MEMS provide the most immediately viable means for meeting this demand.
The promise
Market research firm Venture Development Corp. (VDC) predicts that MST/MEMS-based optical switching devices will exhibit a compound annual growth rate ranging from 109% to 134% through 2004, perhaps achieving a sales level of US$7 billion by that year. (See the figure; the "worst case" scenario assumes delays in achieving suitable device yields and in creating the necessary infrastructure.)
This is certainly enough to raise anyone's eyebrows, and has prompted a miniwave of acquisitions. Several of the formerly independent leaders in the MST/MEMS industry have been acquired, and for disproportionately large sums (sometimes in the billions), by the large telecom and fiber optics firms. These include, for example, Cronos Integrated Microsystems Inc. (by J.D.S. Uniphase), CoreTek Inc. and Xros Inc. (by Nortel), IntelliSense Corp. (by Corning Inc.), and Kionix Inc. (by Calient Networks Inc.). Note that both Lucent Technologies and Agilent Technologies have announced their own optical switching devices, which were developed in-house.
Although all parties to these acquisitions have stated that they do not expect the businesses of the acquired companies to change as a result of these purchases, both history and logic suggest that the reality will be quite different. Resources, particularly experienced MEMS engineers, are limited; it only makes sense that the development and production efforts of the acquirees will be refocused to concentrate primarily on optical switching, complementing the businesses of their parents, which was the reason that they were acquired in the first place.
Chasing the big bucks
Although VDC does not expect that MST/MEMS business units already part of large, non-telecom-oriented corporations (e.g., Honeywell, Rockwell, Xerox, Kodak, Analog Devices) will change their business plans to pursue optical switching, this is by no means certain. Texas Instruments, for example, which was a pioneer in directing light through its digital light processing arrays used in projection apparatus, might very logically elect to expand its efforts into this space. On the other hand, companies that have become well established in other market segments, particularly the biomedical field (e.g., Caliper Technologies Corp.) are unlikely to attempt such diversification.
We have, however, seen indications that other independent MST/MEMS companies have been beguiled by the lure of potentially large profits and/or the possibility of being acquired by one of the telecom giants. Some, which have formerly concentrated on sensors, have begun to position and portray themselves as suppliers of optical switching elements. Others have gone so far as to establish internal business units dedicated to this field. Standard MEMS Inc. is a prime example of the latter category; it has acquired optical technology and fiber optics companies itself, and has recently opened a Microphotonics Technology Center in Southbridge, MA.
Potential downside ramifications
MST/MEMS technology has, among other aspects, the potential to provide computers with sensing and manipulating capability on a grand scale. To date, however, only a small portion of the potential has been realized. Technical, economic, and infrastructure limitations have combined to keep short-term growth rates, and thus short-term return on investment, to less than spectacular levels.
Optical switching will likely change this situation, but only for that segment of the industry. MST/MEMS will not achieve the ubiquitous stature that has been hoped for by industry pundits solely through the advent of optical switching. On the contrary, this "killer" application may actually hamper growth of the technology in other areas.
Participants. As has been previously noted, several of the best-known and progressive companies in the MST/MEMS field have been acquired, and will be refocused onto optical switching devices. This will reduce the number of credible organizations dedicated to advancing the technology as a whole and/or doing research and product development targeted toward other market segments, thereby placing advances in these other areas on indefinite hiatus. We doubt that these companies will be encouraged to deviate very far from their parents' core market/application areas, at least in the near future.
Economics. Economics and financing present an obvious limitation, particularly in view of the current US economic slowdown and adverse investment climate. Financing which might otherwise have been made available to other MST/MEMS operations will almost certainly be redirected toward optical switch suppliers, which evidence more potential for short-term, positive return.
Physical plant and personnel.
Inasmuch as MST/MEMS device manufacturers may use otherwise obsolete physical semiconductor fabrication facilities, physical plant resources should not present a limitation. However, because MST/MEMS has not been a burgeoning, glamorous field, experienced engineers and designers are in relatively short supply. As has been the case with other technological "hot prospects," we may expect intense competition between optical switching companies for the services of this type of individual at the expense of other industry participants.
Vision. The success of any emerging technology depends upon the entrepreneurial vision of its pioneers. Many of those visionaries who were instrumental in the establishment of MST and MEMS are likely to be absorbed into the giants that have acquired their businesses, leaving other industry segments without "champions."
The bottom line
VDC concludes, therefore, that optical switching may prove to be the "Killer Application That Ate Its Siblings" by absorbing a majority of the resources that might otherwise have been directed toward research and development targeted at other MST/MEMS device and application segments. Many of these others will surely be relegated to "back burner" status, at least for the near term, perhaps to await a new generation of visionaries.
There is, of course, a flip side to this coin. Opportunities may arise for new startups, which may be able to take up some of the slack. As was the case prior to the emergence of optical switching, would-be investors must have the patience and wherewithal to continue to provide support while they await the emergence of the next "killer" application.
J. Eric Gulliksen received his BSEE and MMgS&E from Worcester Polytechnical Institute, and his MBA from Clark University. He has more than 30 years of global industrial experience, having held executive positions in both product development/engineering and sales/marketing, and has been awarded 17 US patents. Gulliksen joined Venture Development Corp., where he is a MEMS analyst, in October 1999. Venture Development Corp., One Apple Hill, Natick, MA 01701; ph 508/653-9000, ext. 149, fax 508/653-9836, e-mail [email protected], www.vdc-corp.com.
This article is based on the report MicroStructures Technology (MST) and MEMS: An Applications and Market Evaluation published by Venture Development Corp. For this study and others on the same or different topics, contact Marc Regberg, ph 508/653-9000, ext. 111, [email protected].