MEMS market to grow to US$20 billion by 2028

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MEMS-enabled functionality offsets impact of economic downturn, announce Yole Intelligence’ s analysts.

The MEMS market is set to grow from US$14.5 billion in 2022 to US$20 billion in 2028 at a 5% CAGR, according to annual MEMS analysis by Yole Group, Status of the MEMS Industry report. The consumer MEMS market remains the largest segment, where emerging wearable applications will offset the recent downturn in smartphone demand, growing from US$7.6 billion to US$9.4 billion at a 4% CAGR. The automotive sector continues to benefit from the increasing autonomous functionalities in cars and will remain the second largest market – while industrial, defense and aerospace, medical and telecom experiences CAGRs of at least 5% over the forecast period.

The Status of the MEMS Industry report is one of Yole Group’s best sellers. The market research & strategy consulting company is covering the MEMS industry for more than 20 years and has developed a core expertise in this domain. Combining innovations and business opportunities, this report is offering a relevant and detailed understanding of the MEMS market, its ecosystem, latest innovations, and business development. Analysts offer you today a snapshot of this report.

Added functions in cars and wearables help drive automotive and consumer markets

Pierre Delbos Technology & Market Analyst, Yole Intelligence, part of Yole Group.
“With more than a billion of devices shipped worldwide annually, each containing numerous MEMS components, smartphones have typically been the main driver of the MEMS consumer market. However, as wearable technology matures and a greater number of end products are entering the market, they are beginning to take some of this market share. Importantly, the emergence of new wearable functions is helping to offset the decrease in smartphone purchases – particularly notable in China – as consumers react to high inflation rates and uncertain economies.”

For example, products such as wireless headphones, smart watches and AR/VR headsets feature novel functionalities such as navigation assistance, altitude measurement, spatial audio and even sleep monitoring. This has resulted in an increase in MEMS penetration rate as OEMs integrate more MEMS components to further improve performance and enhance functionality.

Similarly, in the automotive sector, a growing MEMS penetration rate – driven by the integration of autonomous and ADAS features – is helping to counteract a somewhat flat/slow-growing overall automotive market. While we expect an overall reduction in the number of MEMS sensors being used in EVs in the very long term (2030 and beyond), growth is expected in other segments. Demand for components such as MEMS inertial sensors for GNSS positioning, MEMS micromirrors for LiDAR, and MEMS environmental sensors for in-cabin comfort, will help the market grow to US$4.1 billion by 2028 at a CAGR of 7%.

The industrial market, the next largest sector, will be driven by warehouse automation and the implementation of Industry 4.0, where inertial sensors, oscillators, and pressure sensors for robots or autonomous vehicles in factories will be key.

Position sensing requiring high-end MEMS inertial sensors will continue to be an important application for the defense and aerospace sector, while the continued miniaturization of diagnostic and monitoring equipment along with the introduction of wearables will increase demand for MEMS components in the medical sector.

The telecom market is expected to see the largest CAGR (28%) in the forecast period, where optical MEMS for switching and MEMS oscillators are becoming ever more crucial in meeting the exponential rise in data demand.

In terms of volume, the industrial, defense and aerospace, medical and telecom markets make up just 5% of MEMS shipments, but as the performance requirements for these markets are more stringent, the cost for components is higher than consumer and automotive (which make up 95% of the market volume).

MEMS ecosystem: economic downturn keeps high-end players on top and leaves low-end suppliers struggling

Between 2021 and 2022, the leading company in MEMS, Robert Bosch, grew at a 12% CAGR. Bosch has business segments in both consumer and automotive, which tend to balance each other out, allowing it to keep revenues up.

STMicroelectronics grew at a 5% CAGR. The Samsung supplier is strong in the consumer space but recently entered the automotive market.

SiTime, which supplies clock oscillators, grew by an impressive 30% in the last year, which follows a successful few year or the company.

Most players analyzed in the report achieved growth, but there were some players that reported losses. Microphone supplier Goermicro (14% downturn), for example, has been impacted by the tough year experienced by the smartphone industry, as well as by fierce competition, especially from Chinese suppliers. Companies that supply mid- to low-end consumer brands are more heavily impacted by the turbulent global economy and downturn in consumer spending than MEMS players with high-end customers. This is leading to a polarization of the MEMS ecosystem.

Pierre-Marie Visse Technology & Market Analyst at Yole Intelligence, part of Yole Group
“For high-end customers who charge hundreds or thousands of dollars for devices, cost is less of a critical factor than performance. This allows the high-end suppliers – for example, Bosch who supplies Apple – to keep some price flexibility while retaining competitiveness. This price power ensures a stable margin and a stable R&D budget, which, in turn, creates a stable innovation rhythm. This then allows companies like Bosch to innovate more effectively so they can attract high-end customers and keep their prices high – which keeps them benefitting in a virtuous cycle.”

In contrast, consumers of brands such as Oppo, Motorola and Xiaomi are much less willing to pay premiums for added performance or functionality than Apple or Samsung users. Despite having a few premium models in their portfolios, mid- to low-end devices make up the bulk of these brands’ products.

Khrystyna Kruk Technology & Cost Analyst at Yole SystemPlus, part of Yole Group
To remain competitive and secure design wins, MEMS players such as MEMSensing, Alps Alpine and GMEMS, are under increased pressure to lower their prices, which over years erodes their margin. There is then less finance for R&D, less opportunity for innovation, and they are trapped in a vicious cycle. In addition, mid- to low-end devices typically have more competition as the components are easier to produce.”

This competition is particularly apparent in China, where the MEMS ecosystem is growing rapidly thanks to funding and incentives. The long-term effects of this push are still unclear. Will it allow Chinese companies to increase the quality of their MEMS and compete with European and American companies at lower prices? Or will it create a massive local over-supply and sabotage the ecosystem by killing the margins of all local players because of excessive competition? Or, should we expect a greater consolidation of the Chinese ecosystem?

When the market demand for smartphones is healthy, this vicious cycle becomes less of an issue, but in the last few months – where brands such as Motorola, Oppo and Xiaomi have been impacted more dramatically by consumer spending than Apple or Samsung – the gap between MEMS leaders and the rest of the competition has widened, which will continue if demand does not pick up rapidly.                        

Yole Group will attend the MEMS & Imaging Sensors Forum, powered by SEMI. Analysts will be pleased to present key results of the annual MEMS report with a dedicated presentation on Sep. 20, “Future of the MEMS Technology” session. Yole Group’s speaker, Pierre-Marie Visse will explore the latest and future MEMS trends for a smarter world…

Analysts are glad to meet Yole Group’s customers and business partners, establish new contacts and help drive business forward during the show. Come and meet them and look through the latest market, technology, reverse engineering and reverse costing analyses. Ask for a meeting at Yole Group’s booth:

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