What can you expect for More than Moore markets in 2016?

2015 has been a year of significant changes that are impacting the semiconductor industry on a very large scale and that will have a long-term effect:

  • An unprecedented consolidation of the semiconductor industry happened last year – and is expected again in 2016
  • Chinese companies and investors have been pushed to acquire more companies as fast as they can in order to create a complete semiconductor industry in China, from equipment manufacturers to packaging services and device manufacturing
  • An explosion of wearable systems – although with limited commercial success at the moment – and the continuous hype surrounding the Internet of Things (IoT)

We, at the Yole Group, focus on ‘More than Moore’ applications, Yole Développement itself doing market research, technology and strategy consulting, System Plus Consulting reverse engineering and reverse costing, and KnowMade intellectual property (IP) and patent analysis. Every day, we look at the trends affecting sensors, actuators, LEDs, power, imaging and microfluidic devices and all the non-integrated circuit (non-IC) devices reusing semiconductor infrastructure. Doing this, we see different trends. The consolidation of the wider industry is affecting the power electronics field because it is mature. However, this has had a very limited effect in sensors for MEMS and imaging, where the most important Chinese acquisitions have been Omnivision for image sensors and Silex for MEMS, LEDs and microfluidics. The Chinese investments are particularly visible in key power devices for the electrification of transport in China, though there are more Chinese local investments in the other More than Moore markets. Wearables and IoT are fueling the growth of sensor applications.

More than Moore 2015 - Yole Développement

What we can expect in 2016?

Power devices will remain the key devices for the electrification of transport and changes to the grid infrastructure. These two fields have been very quiet in terms of radical innovations since their beginnings 100 years ago. However, today they are being influenced by the combination of renewable energy production and storage stations and by the political push towards cleaner transport systems. 2016 will be another year of multiple initiatives supporting these two fields, with increasing interrelation between power management and energy storage.

Microfluidics is becoming the enabling technology for all the new instruments of the pharmaceutical and life science industry. Next generation sequencing instruments, single cell manipulation and analysis and point of care analysis all rely on microfluidics to industrialize the process and make them cheaper. 2016 will see multiple new releases of innovative systems.

The lighting industry is now investing in and increasing the value linked to LED modules because this is where the specifications of luminaires are improved, cost is optimized and value is flowing. More industrial ventures will initiate this transition in 2016 (see the Yole Développement report “LED Lighting Module Technology, Industry and Market Trends 2015”).

The biggest changes are happening in the sensor industry, both for MEMS sensors and imaging (see Yole Développement’s “Status of the MEMS industry” and “Status of the CMOS image sensor industry”). Two trends are reshaping these industries: the commoditization of a three-axis accelerometer via multiple sources for a price below $0.15; and the growing importance of sensors for systems from mobile phones to drones to cars and medical devices. There would be no IoT, wearable systems or autonomous cars without sensors.

There are also two other trends in the sensor industry. First, in 2015 the market volume for sensors in consumer applications grew almost 20%, while the market’s value remained almost flat. This means extreme price competition, decreasing margins and a search for differentiation by any means. 2016 will see several sensor manufacturers transform into to function providers, delivering modules with embedded software and functions to their customers. This is the only way for them to stay in the race and maintain sales and long-term profitability. Image sensor manufacturers like Omnivision or MEMS sensor manufacturers like STMicroelectronic are good examples of this trend.

Secondly, we are expecting very strong growth in the mid-range and high-end sensor market in 2016 and beyond. All the driving end markets, for example building and home automation for energy management, drones and various flying objects, autonomous vehicles, need cost adapted/good specification devices. As their performance improves, so does the performance of the sensors they are using. Look at the new drone families about to be released on the market. Their stabilization, tracking and image capture needs higher-end sensors compared to mobile phones and other consumer applications. This is even truer for autonomous cars and also all high-end applications driven by medical, industrial or consumer applications like mobile phones. As sensors are a smart way to differentiate mobile phones, we will certainly see models with chemical sensors, spot thermometers, integrated autofocus and multiple other sensing capabilities in 2016.

Apple’s acquisition of two fabs, one in Taiwan from Qualcomm and one in California from Maxim, are also an example of the importance of More Than Moore devices for the industry in general and its biggest company in particular. Direct access to specific processes that are not available easily is extremely important. The glass processing fab in Taiwan and versatile analog mix signal fab in California cannot produce any leading-edge IC devices. However, they can be very good tools to develop and industrialize sensors and specific displays.

The pure IC market is expected to be stable or decrease in 2016. By contrast, we can again expect at least a 10% increase in More than Moore applications, thanks to the diversity of the applications and the linked driving forces.

Yole Développement, System Plus Consulting and KnowMade will continue to follow all these applications, the companies supporting them, and the new devices and modules to be released in 2016. That will enable us to understand new market trends, highlight new technologies implemented in production and also the IP and patent situation. You will find more details in our reports and also a daily update on what’s happening in the industry on our website:


Author: Jean-Christophe Eloy, CEO and President

Source:  Yole Développement