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Monday, August 08, 2016

Top ten MEMS sensor suppliers in 2015 as market struggles

By Nick Flaherty

Market researcher IHS Markit has just released their ranking of micromachined MEMS sensor suppliers for 2015.

Despite the demand for sensors for the Internet of Things, MEMS sensor revenue declined by 3.4% in 2015 with slow growth expected to start from 2017, says Marwan Boustany, senior analyst for MEMS and sensors at IHS Markit. While microphones and other MEMS categories grew, other categories declined -- most notably, motion sensors. 
Source: IHS Markit

The three leading MEMS sensor suppliers globally, based on 2015 revenue, were STMicroelectronics at 17.85 percent, Knowles at 17.32 percent and InvenSense at 17.26 percent.

With less potential for organic volume growth due to slowing end-product markets, market-share competition will dominate in 2016. MEMS suppliers will therefore focus more on sensor improvement (power and performance), portfolio expansion and innovation (new sensor categories), acquisitions (rapid capability integration), new business models such as software services based on sensors and expansion into new product categories such as unmanned drones and smart homes.
Drones that use motion sensors began to take off in 2015. While this is a segment with a lot of potential, regulatory issues may have an as yet unclear impact on future sales volume, especially when the potential for delivery drones from Amazon are considered.

Home environmental monitoring, using gas, humidity and temperature sensors, show good opportunity for growth. This segment is led by smart home products from Nest and Honeywell, as well as carbon-monoxide detection regulations and growing consumer adoption of air-purifiers.
STMicroelectronics is still the revenue leader for consumer MEMS, thanks to its business across a wide range of sensor types. The company’s consumer MEMS revenue lead continued to erode at a fast rate last year, with competitors growing share, the company’s first-place revenue lead has narrowed from $100 million in 2014 to around $10 million in 2015. STMicroelectronic’s motion sensor revenue continued to decline in 2015, however it was helped by its growing success with 6-axis inertial measurement units (IMUs) used mainly by manufacturers in China.

STMicroelectronics was hit hard in the last two years, because Apple shifted its gyroscope business to InvenSense in 2014; however, STMicroelectronics won the Apple Watch business in 2015 with its 6-axis IMU and also increased its share of motion sensors used by Samsung in 2016.

Knowles is still the dominant leader in MEMS microphones, leading the second-ranked suppler (Goertek) by a power of three in units and revenue. In addition to offering a wide range of analog and digital-output microphones, Knowles has also started shipping its VoiceIQ microphones with local processing in 2016, as it seeks to address both mobile and internet of things (IoT) applications.

While MEMS microphone price erosion has led to revenue decline for Knowles, it still ranks second after STMicroelectronics thanks to a favorable shift in Microphone adoption. The company has dramatically narrowed the lead enjoyed by STMicroelectronics -- from more than $100 million in 2014 to just $10 million last year. Knowles provides a large share of MEMS sensors used in Apple’s products, as well as a share in most handsets, tablets and wearable products from other manufacturers.

InvenSense overtook Bosch and moved into third-ranked revenue position in the MEMS market last year. The company leads in consumer motion sensor revenue, thanks to dramatic volume growth for 6-axis IMUs as well as its dedicated optical-image stabilization (OIS) gyroscope. InvenSense is the standout MEMS supplier in terms of motion sensor revenue growth, with 26 percent year-over-year revenue growth, while the other sensor leaders suffer declining revenue.

Apple is the key and dominant source of this revenue for InvenSense, especially as it loses share in Samsung to STMicroelectronics in 2016. The company is increasingly pushing its MEMS microphone products against strong competition and hopes to release an ultrasonic fingerprint sensor in 2017 to capitalise on a rapidly growing segment.

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