Industry Insights Market Analysis

Is the MEMS industry back on track?

Micro-Electro-Mechanical Systems (MEMS) devices are integral to modern life, found in a wide array of applications ranging from smartphones and automobiles to fighter jets.

Their extensive use means that the production volumes and associated revenues of MEMS devices can be substantial.

The MEMS market is poised for significant long-term growth, driven by key trends across various sectors. These trends include the increasing integration of sensors in consumer electronics, the advancement of autonomous driving technologies, the push for enhanced comfort in vehicles, the evolution of Industry 4.0, and the rise of artificial intelligence.

Yole Group anticipates a robust compound annual growth rate (CAGR) of 5% from 2023 to 2029 in both revenue and volume. This growth is expected to result in nearly 43 billion units being shipped and revenues reaching $20 billion by 2029.

In this context, Yole Group has released its annual market and technology report, ‘Status of the MEMS Industry 2024’. This latest edition offers updates on MEMS market volumes, average selling prices (ASPs), and revenues for the year 2023. It also highlights the most promising growth opportunities and key market drivers for MEMS.

“In 2023, the MEMS industry experienced a decline to $14.6 million (a 3% year-over-year decrease), primarily because of a downturn in consumer electronics and economic cycles. Despite this challenging year, the MEMS market is expected to grow again in 2024. Approximately 34 billion units are projected to be shipped in 2024 (a 9% year-over-year increase), resulting in $15.6 billion in revenue,” said Pierre Delbos, Technology & Market Analyst, MEMS & Sensing at Yole Group.

The report provides a comprehensive overview of wafer production levels, detailing information by wafer size, technology, fabrication facilities, and geographical locations. Additionally, it examines the development of the MEMS ecosystem and emerging technology trends, offering a thorough summary of the industry’s status as of 2023 and the trends for each device and application.

“Geographically, at Yole Group, we believe that approximately 60% of these wafers are processed in Western countries (North America and Europe), around 19% in Japan, with the remainder in Greater China and Southeast Asia (Malaysia and Singapore). Despite trends toward reshoring, mainland China is expected to increase its manufacturing share in the coming years,” said Pierre-Marie Visse, Senior Technology & Market Analyst, MEMS & Sensing.

Yole Group estimates that approximately four million wafers were processed in the MEMS industry in 2023, with expectations for this number to grow to five million by 2029.

One notable trend is the increasing number of Chinese MEMS companies and foundries, which has led to significant local oversupply. This oversupply is currently squeezing the margins of many industry players. If demand does not increase rapidly, there could be a wave of bankruptcies or a cessation of MEMS activities among Chinese companies. Alternatively, this situation could lead to greater consolidation within the Chinese MEMS ecosystem. The report also raises the question of how many of these companies will secure the financial support necessary to continue operations.