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

Core view

MEMS is a key component driving the revival of hardware innovation. As the core of micro-innovation in mobile devices, MEMS has become a fundamental building block for emerging technologies like wearables. The future looks bright for MEMS, with growing demand in areas such as indoor navigation, background recognition, keyword detection, always-on booting, and more accurate motion sensing. These applications are pushing the boundaries of what MEMS can achieve, making it one of the most promising electronic components in the coming years.

MEMS comes in various forms and supports a wide range of applications. Its advantages—low power consumption, compact size, and high performance—make it ideal for use in mobile devices. Inertial sensors and MEMS microphones are already widely used, but their adoption is expected to grow further. Pressure sensors and optical image stabilization (OIS) gyroscopes are also gaining traction. New markets, such as MEMS autofocus, resonators, and speakers, are emerging, offering exciting opportunities for expansion. Wearable devices, in particular, will drive an increase in sensor usage, from basic accelerometers to advanced barometers, gyroscopes, thermometers, and hygrometers.

The MEMS industry is shifting toward specialized division of labor, which benefits advanced packaging solutions. Traditionally dominated by vertically integrated IDMs, the industry is now seeing a rise in fabless design companies, leading to increased collaboration between foundries and packaging plants. Advanced packaging techniques like wafer-level and BGA/LGA packages are becoming more popular due to their ability to reduce size and cost. 3D wafer-level packaging, which integrates MEMS with ASICs, is especially promising, as it enhances efficiency and minimizes space requirements.

Investment suggestions include focusing on companies like Goer Acoustics (002241), which is a leader in MEMS microphones and has made breakthroughs in pressure sensors. With the iPhone 6 introducing air pressure sensing, Goer is well-positioned to benefit from this trend. Additionally, Jingfang Technology (603005) and Huatian Technology (002185) are recommended for their expertise in WLCSP/TSV technology, which is crucial for advanced MEMS packaging.

Risk factors include slower-than-expected MEMS market adoption and increasing competition. While the potential is vast, challenges remain in ensuring that MEMS applications meet user needs and gain widespread acceptance.

1. MEMS: The Foundation of Hardware Innovation

1.1 MEMS – The Future of Micro-Innovation in Mobile Devices

MEMS (Micro-Electro-Mechanical Systems) combine micro-circuits with mechanical components on a single chip. Based on semiconductor manufacturing processes like photolithography and etching, MEMS systems integrate precision engineering with materials science, chemistry, optics, and more. They enable millimeter or micrometer-scale devices with precise electrical, mechanical, chemical, and optical properties. After smartphones and tablets, innovation in consumer electronics has entered a plateau. Companies are now focusing on new features and applications to enhance user experience. MEMS-based sensors and actuators are seen as the next wave of micro-innovation, especially in wearable devices. Their maturity is expected to accelerate the development of smart wearables.

a) MEMS is shaping the future of mobile interaction. With the rise of wearables, there's a growing need for smaller, more efficient components and better user interfaces. Meanwhile, mobile computing and internet technologies open up new possibilities for MEMS systems in various devices.

b) MEMS is essential for wearable technology. Wearables require more advanced MEMS than traditional mobile devices. They demand miniaturization, improved input/output methods, and environmental awareness. This makes MEMS a critical enabler for the next generation of smart devices.

1.2 Expanding Applications

MEMS sensors first gained traction in mobile devices with the launch of the iPhone in 2007. Since then, they have been widely adopted in inertial sensors, microphones, proximity sensors, and more. Apple’s influence helped spread these technologies rapidly, enhancing user experience and creating new habits. Beyond mobile devices, MEMS sensors are now used in gaming consoles, wearables, smart TVs, health monitoring systems, automotive tech, and location-based services. Features are evolving from basic inertial sensors and microphones to more complex systems like pressure, humidity, RF switches, and multi-sensor integration.

We believe MEMS is one of the most promising components in the next few years, with rising demands in areas like indoor navigation, voice recognition, and motion tracking. These trends are pushing the industry forward, opening up new growth opportunities.

1.3 New MEMS Sensors Coming to Mobile Devices

Mobile devices are a major growth area for MEMS. In addition to the continued use of inertial sensors, microphones, and pressure sensors, we expect rapid adoption of air pressure sensors and OIS gyroscopes. In the coming years, new MEMS sensors like oscillators, switches, speakers, gas sensors, and cameras will also appear on mobile platforms. The MEMS market on mobile devices is projected to grow at an average annual rate of 20% between 2012 and 2018, with pressure/temperature and optical MEMS leading the way.

1.4 Growing Demand for MEMS in Wearable Devices

Wearable devices require different types of sensors depending on their function. For example, inertial sensors are used to track movement and improve accuracy. As wearables evolve, the number of MEMS sensors embedded in them is increasing. Apple and Samsung are leading the way in integrating more MEMS into their products:

1) First-gen pedometers only had accelerometers for basic step counting.

2) Second-gen activity trackers added barometers for better calorie tracking.

3) Third-gen monitors included accelerometers, barometers, and gyroscopes for more complex motion recognition.

4) Fourth-gen smartwatches added temperature, humidity, and microphones for advanced functions like background recognition and personal assistants.

2. Diverse Applications in the MEMS Market

2.1 A Wide Range of MEMS Types

MEMS offers numerous advantages, including small size, low power consumption, durability, affordability, and stable performance. These characteristics make MEMS suitable for many fields. Although MEMS is still in its early stages, it holds significant potential for future growth.

MEMS includes sensors, actuators, and micro-energy systems:

Sensors: MEMS sensors are well-established, including pressure, inertial, and environmental sensors. Inertial sensors and microphones are now standard in many devices. Pressure, temperature, and humidity sensors are also expanding into mobile and wearable devices.

Actuators: MEMS actuators have mature applications like inkjet nozzles and RF filters. Future applications may include MEMS oscillators, speakers, cameras, and mirrors.

Micro-energy: MEMS fuel cells offer high energy density and could replace traditional batteries. However, current costs are still too high for mass adoption.

From 2012 to 2018, the MEMS market grew at a CAGR of 13%, driven by microphones and inertial sensors. Combinations like 6-axis/9-axis inertial sensors, microdisplays, and MEMS oscillators are expected to grow even faster.

2.2 Inertial Sensors Remain Key, with Integration as the Trend

Inertial sensors include accelerometers, gyroscopes, and geomagnetic sensors. While single-axis versions were used in automotive control, three-axis MEMS inertial sensors became popular in smartphones for games, VR, and fitness tracking. Now, 6-axis and 9-axis combinations are becoming mainstream, with pressure sensors expected to be integrated in the future. This trend toward higher integration will lead to more advanced functionality and seamless interaction between sensors and software.

The penetration rate of inertial sensors in mobile devices has reached about 50%, and their use in wearables like smartwatches and shoes is expected to grow. The global inertial sensor market is forecasted to expand from $1.76 billion in 2012 to $2.99 billion in 2018, with 6-axis/9-axis sensors driving the next phase of growth.

2.3 MEMS Microphones

Companies like Knowles and Goer Acoustics have led the shift from traditional electret microphones to MEMS microphones in mobile devices. Their advantages in quality, noise reduction, and miniaturization make them ideal for next-generation hardware. From 2012 to 2016, shipment growth for MEMS microphones reached 24%.

Wearables require microphones for voice input and sound output. Beyond simple calls, MEMS microphones support speech recognition, background analysis, and keyword detection. These features enable always-on, always-listening experiences, which are becoming increasingly common in phones and wearables.

2.4 Optical Image Stabilization and Autofocus

Smartphone users rely on stable imaging, especially in low light. OIS gyroscopes help stabilize images and produce clearer photos. The iPhone 6 introduced OIS, setting a new trend in camera technology.

MEMS autofocus improves focus speed and accuracy while reducing power consumption. It allows lenses to move quickly and precisely, improving photo quality and reducing heat. These advantages make MEMS autofocus ideal for next-generation cameras.

3. Optimistic Outlook on MEMS Expansion and Packaging Opportunities

3.1 Shortened Application Cycle and Shift in Industry Structure

MEMS manufacturing involves multiple stages, including fabrication, packaging, testing, and integration. Historically, the industry was controlled by vertically integrated IDMs due to fragmented applications. However, as MEMS matures and demand grows, the cycle from R&D to commercialization is shortening. Fabless design companies are emerging, creating opportunities for foundries and packaging firms.

3.2 Upgraded Manufacturing and Advanced Packaging Benefits

As MEMS becomes more mainstream, manufacturers are adopting advanced processes and larger wafers. Current MEMS production uses 6-inch wafers with 65nm processes, while ICs reach 12nm or 20nm. Larger wafers and advanced processes will improve performance and reduce size, cost, and power consumption.

Packaging is also evolving to meet the needs of wearables. 3D wafer-level packaging and BGA/LGA are expected to dominate, offering significant size and cost reductions. These packaging techniques must account for special signal interfaces, materials, and structural designs to ensure reliability and performance.

3.3 Investment Focus: Goer, Jingfang, and Huatian

Goer Acoustics is a leading player in the domestic MEMS market, supplying microphones to Apple and other major clients. Its pressure sensors are also gaining traction, positioning the company well for the growing demand in air pressure sensing. Jingfang and Huatian are recommended for their expertise in WLCSP/TSV technology, which is crucial for advanced MEMS packaging. Asahi Electronics’ SiP package is also worth considering for post-heterogeneous integration.

4. Risk Warning

MEMS application may not meet expectations, and competition is intensifying. While the potential is strong, there are risks related to market adoption and competitive pressures.

Author: Orient Securities Kuai Jian Hu Yu mirror