Integration of MEMS components and sensors is not new to the mobile phone industry. For example, FBAR RF filters and silicon microphones have been integrated on our mobile phones since 2002. More recently, MEMS accelerometers have been established as a must-have feature for many smartphones and feature-phones. And other types of sensors, such as CMOS image sensors, have experienced a large success in the recent years.
But the mobile phone market is changing extremely quickly. It appears that in 2010 we are at a turning point in the history of MEMS and sensors for handsets. The market for MEMS and sensors will experience double-digit growth, from $3.55 billion in 2009 to $7.91 billion in 2015.
We have identified several factors explaining why MEMS and sensors will experience this tremendous growth over the next few years:
- Share of smartphones is rising faster than ever: 44% of the mobile phones will be smartphones in 2015. Success of smartphones is leading to an increasing amount of MEMS and sensors in mobile phones to provide new features/services to end users, to reduce cost through more integration, or to improve hardware performance
- GPS integration is not limited to high-end phones anymore. Nearly one phone in three will incorporate GPS in 2010. This is an additional driver to integrate motion sensors: when combined with compass, accelerometers, or gyroscopes, this enables new services to be deployed
- The RF part of cell phones is currently changing very quickly, with more and more multi-band, multi-mode mobile phones. The incoming deployment of new standards (LTE network in particular) has a direct impact on RF components and will open new doors for online services, using an increasing amount of sensors
- One striking illustration on how quickly things can happen in the mobile phone industry is the recent release of iPhone 4, the first mobile phone to integrate a MEMS gyroscope, followed a few days later by the announcement of InvenSense IPO. The gyroscope business is now expected to boom very quickly: we believe that the gyroscope market for mobile phones will be more than $80 million in 2010 already. We believe strongly that the impact of gyroscopes on the user experience will be as high as the accelerometer case. Only 3 years ago, the first accelerometers were integrated on mobile phones, at a price level similar to gyroscopes today. Now accelerometers are viewed as commodity products in some platforms, and their penetration should be above one third of cell phones in 2010. Total motion sensor market for mobile phone will reach $1.19 billion in 2015, with a 25.3% CAGR.
Gyroscopes are not predicted to be the only killer app in handsets for the years to come. Such an attractive market brings with it intense competition between players. We can observe very quick changes in the supply chain since 2 years, with the emergence of new players, the alliances between companies, and regular fundraising/acquisitions, in particular when it comes to startups. IDMs such as ST Microelectronics have been established as business leaders, by offering reliable components, high-level customer support, an extensive product portfolio, and huge price reduction. However few fabless companies have been successful, and several innovative fabless startups are expected to impact the market within a few years.