MEMS Industry In-Depth Report: The Basic Components of Hardware Renaissance

Core View

MEMS is a fundamental component in the revival of hardware. As a key element in the micro-innovation of mobile terminals, MEMS has become the foundation for new hardware such as wearable devices. We believe that MEMS is one of the most promising electronic components in the coming years, especially with the increasing demand for indoor navigation, background recognition, keyword detection, full-time boot, and more accurate motion tracking.

MEMS comes in various types and is widely used across many applications. Due to its low power consumption, small size, and high performance, MEMS has found extensive use in mobile terminals, particularly in inertial sensors and MEMS microphones. The adoption of air pressure sensors and OIS gyroscopes is also expected to grow rapidly. Additionally, emerging applications like MEMS autofocus and MEMS resonators are opening up new markets. With the growth of wearable devices, the usage of sensors such as barometers, gyroscopes, thermometers, hygrometers, and microphones will continue to rise beyond simple single-axis accelerometers.

MEMS is moving towards a more specialized division of labor, which benefits advanced packaging. Historically, the MEMS industry was dominated by vertically integrated IDM companies. However, as the industry matures, there's an increasing trend toward fabless design companies and specialized foundries. Advanced packaging solutions like wafer-level and BGA/LGA packages are becoming more prominent, offering reduced size and cost. The integration of MEMS and ASIC through 3D wafer-level packaging is expected to further enhance efficiency and reduce form factor.

Investment Suggestions: We are optimistic about the expansion of MEMS applications and recommend focusing on Goer Acoustics (002241, unrated). Goer’s MEMS-based microphones have positioned it as one of the leading domestic MEMS companies, and it has also made breakthroughs in pressure sensors, expecting to benefit from the growing demand for air pressure sensing in devices like the iPhone 6.

Under the trend of advanced MEMS packaging, we suggest paying attention to Jingfang Technology (603005, unrated) and Huatian Technology (002185, unrated), which are advancing WLCSP/TSV technologies.

Risk Warning: There is a risk that MEMS market applications may not meet expectations, and increased competition could impact the industry.

1. MEMS – The Core Component of Hardware Revival

1.1 MEMS – The Current Direction of Micro-Innovation and the Basis of Wearable Devices

MEMS (Micro-Electro-Mechanical System) integrates micro-circuits and micro-mechanics on a single chip. Based on semiconductor technology such as photolithography and etching, MEMS combines ultra-precision machining with materials, mechanics, chemistry, optics, and more to create millimeter or micrometer-scale systems with precise electrical, mechanical, chemical, and optical characteristics. After smartphones and tablets, innovation in consumer electronics entered a platform period. Companies are now focusing on new features and applications to improve user experience.

We believe that MEMS-based sensors and actuators will be the direction of micro-innovation in mobile terminals before the next major innovation, possibly in wearable devices. The maturity of MEMS technology will greatly promote the development of wearable devices.

1.2 Expanding Application Fields

MEMS sensors began entering the mobile terminal field with the iPhone in 2007, including inertial sensors, MEMS microphones, proximity sensors, and light sensors. These sensors enhanced user experience and helped shape user habits. As a result, MEMS is spreading to other markets such as gaming devices, wearables, smart TVs, health monitoring, automotive, and LBS. Features are also expanding, from inertial sensors to air pressure, humidity, temperature, RF switches, and more, with multi-sensor integration enhancing miniaturization and functionality.

1.3 New MEMS Sensors in Mobile Terminals

Mobile terminals will be a key growth area for MEMS. In addition to continued popularity of inertial sensors and microphones, the penetration rate of air pressure sensors and OIS gyroscopes is expected to rise rapidly. New MEMS sensors such as oscillators, switches, speakers, gas sensors, and cameras are also anticipated to appear in the coming years. The MEMS market on mobile terminals is expected to grow at an average annual rate of 20% between 2012 and 2018, with pressure/temperature and humidity sensors being the fastest-growing segments.

1.4 Increasing MEMS Requirements in Wearable Devices

In wearable devices, different devices require different interactions and sensor needs. For example, inertial sensors are needed to measure movement and provide more accurate data. As functionality improves, the number of MEMS sensors in wearables is also increasing. Apple and Samsung are actively integrating MEMS into their devices, from basic step counters to advanced activity trackers with multiple sensors for improved accuracy and functionality.

2. Multiple Applications in the MEMS Market

2.1 Diverse Types of MEMS

MEMS offers advantages such as small size, low power consumption, and stable performance. It has potential in many fields. Although there are many applications, the MEMS market is still in its early stages, with significant growth potential. MEMS includes sensors, actuators, and micro-energy systems. Sensors like pressure, inertial, and environmental sensors are already established, while actuators like MEMS oscillators and speakers are emerging. MEMS fuel cells, though promising, are still costly.

2.2 Inertial Sensors Remain a Key Market

Inertial sensors include accelerometers, gyroscopes, and geomagnetic sensors. While traditional single-axis sensors are used in automotive control, three-axis MEMS inertial sensors became popular in smartphones after 2009. Today, 6-axis and 9-axis combinations are becoming mainstream, with future trends pointing toward even higher integration. The global inertial sensor market is expected to grow significantly, driven by mobile and wearable devices.

2.3 MEMS Microphones

Companies like Knowles and Goer Acoustics have led the MEMS microphone trend, replacing traditional electret microphones. Their advantages in quality, anti-interference, and miniaturization make them ideal for new hardware. MEMS microphones are also important for voice recognition, background detection, and keyword identification in wearables, enabling always-on listening and better user experiences.

2.4 Optical Image Stabilization and Auto Focus

Optical image stabilization (OIS) is crucial for smartphone cameras, especially in low-light conditions. MEMS autofocus systems offer faster focusing, lower power consumption, and smaller size compared to conventional VCM lenses. This makes them ideal for high-performance camera modules in smartphones and wearables.

3. Optimistic Outlook on MEMS Applications and Packaging Opportunities

3.1 Shortened MEMS Market Cycle and Industry Chain Evolution

The MEMS industry chain is complex, involving manufacturing, packaging, testing, and more. Traditionally, MEMS was controlled by vertically integrated IDMs due to fragmented applications. However, as technology matures and demand increases, the industry is shifting toward fabless design companies and specialized foundries. This shift is creating opportunities for packaging and testing plants.

3.2 Upgrading Manufacturing Links and Benefits of Advanced Packaging

As MEMS becomes more widespread, manufacturers are adopting advanced processes and larger wafers. Packaging requirements are also increasing, with 3D wafer-level packaging and BGA/LGA packages showing strong potential. These solutions offer reduced size, cost, and improved performance, making them ideal for wearable devices and other compact applications.

3.3 Investment Recommendations

Goer Acoustics is a leader in the domestic MEMS field, supplying microphones for Apple and other major brands. It is also expanding into pressure sensors and other MEMS applications. Jingfang and Huatian Technologies are also worth watching for their advancements in WLCSP/TSV and SiP packaging technologies.

4. Risk Warning

There is a risk that MEMS applications may not meet expectations, and increased competition could pose challenges to the market.

Author: Orient Securities Kuai Jian Hu Yu Mirror