The results are in and the grades are in for the 2021 microelectromechanical systems (MEMS) Industry Commercialization Report Card Study. Not surprisingly due to Covid and supply chain woes, the final grade declined from B- to C+, breaking a string of the previous six years.
Does having a report card matter?
The initial and ongoing intent of the author has been to report to the MEMS community the barriers or critical success factors in the creation of a successful MEMS industry and to help guide participants with valuable inputs to better succeed based on past performance. This is truly a “lessons learned” opportunity and in the words of the famous philosopher George Santayana,” Those who forget the past are condemned to relive it.”
MEMS were discovered in the mid-1950s, along with semiconductors, both at Bell Labs. In 1998, I felt that it was long overdue in providing the MEMS community a different and objective approach to reporting on the progress of MEMS commercialization activities as a valuable alternative to the standard quantitative approach of sales volume and growth rate reported by several organizations. What was needed was a unique and simplified approach to create a vehicle that could intimately address the sentiments and attitudes of the MEMS community. Thus, the Report Card was born.
According to Gartner, 2021 worldwide semiconductor revenue was $595 billion. Conversely, and according to IC Insights, 2021 MEMS worldwide revenue was $15.9 billion. This constitutes a 37.4 to 1 discrepancy. This prompts the question… why? Looking to the semiconductor industry and its successful commercialization is certainly a lessons-learned opportunity. After considerable research into technology commercialization, I concluded that the 14 Report Card subjects, also known as critical success factors, were the best vehicles for insight. The resulting reporting and subsequent call to action recommendations can be planned and executed to address subjects that appear problematic.
Methodology
From its inception, the Report Card Study research process has embraced a hybrid approach using two popular market research vehicle concepts: The Delphi Process in addition to the Mass Observation Process (MOP) which gained popularity prior to WWII in the UK. Both approaches use inputs for a limited number of participants as compared to the popular opinion research vehicles such as Harris, Gallup and Nielson polls which rely upon many interviews to project an outcome within a certain degree of accuracy.
For the 2021 report card, 42 completed questionnaires were received from a select list of 111 MEMS industry professionals in the Roger Grace Associates database resulting in a 38% return rate. The emailed questionnaire required respondents to assign letter grades with plusses and minuses from A to D to each of the 14 subjects as well as provide verbatim comments on subjects that they considered of unique importance. The typical respondent had an average of 25 years of experience in the MEMS industry and, as such, the Report Card represents a total of over 1,000 person years of cumulative MEMS experience. It should be noted that achieving a response rate of over 5% for this type of market study is virtually unheard of in the market research community. I believe that the 38% return rate demonstrates the continues commitment of the individuals in the study to support the MEMS community.
Results
As mentioned, the Report Card consolidated grade for 2021 dropped from B- to C+. The C+ grade previously occurred only in the years 2008 and 2009 and as a direct result of the worldwide financial recession. A C+ grade was given for the initial year of the Report Card in 1998. More importantly, and as a result of a closer examination of the numerical results, the actual numerical score (not the grade mark), in 2021 was the lowest in the history of the study.
Additionally, all but one of the 14 subjects, Industry Roadmap, declined and with Infrastructure declining two grades. The apparent maturity of the MEMS industry, to maintain its B- grade which has been previously reported here in Fierce Sensors [6], has been severely upended by economic and societal changes brought by Covid in 2020 and 2021 and is now being projected into 2022 because of the Omicron variant.
Here are some significant results:
Marketing…a major reduction in travel and attendance at industry events has torpedoed marketing and sales programs.
Infrastructure…the supply chain problems have been severe, and organizations are attempting to develop local suppliers for critical parts.
R & D…the inability of researchers to collaborate in our labs and travel bans that have kept graduate students at home has seriously derailed the progress on ongoing projects.
Summary
The final grade for the 2021 Report Card declined to C+ with a standard deviation from 1998 to 2021 of 0.40. All subjects declined in at least one grade except for Industry Roadmap which remained the same. Infrastructure declined two grades, highly driven by the significantly negative and prolonged impact of supply chain disruptions resulting from Covid. This outcome was projected to occur last year’s Fierce Electronics coverage of the 2020 Report Card and referenced in my Forecast 2022 article.
With the recent surge in COVID cases in Q2, 2022, because of the emerging dominance of Omicron BA.5 and BA.4 variants, it is highly likely that the Report Card for 2022 could be similarly affected as for 2021.
I hope this unique annual market study will provide valuable guidance and actionable information to the MEMS industry to support its commercialization efforts. It should be used as a valuable tool to successfully overcome existing barriers to commercialization and act as a critical input to help formulate strategies and tactics. Organizations should use this information to help pivot in the market and to create and execute new strategies to become successful in the new normal of future health-driven economic uncertainties. And yes…to answer the above question…the Report Card matters.
Due to limited space, information including critical verbatims and recommendations to overcome barriers was not provided here. However, the extensive Report Card Final Report is available on the Roger Grace Associates website. Thanks go out to all participants.
Roger H. Grace is president of Roger Grace Associates, a Bonita Springs, Florida-based marketing consultancy he founded in 1982 that provides market research, strategic marketing communications and business development services to the MEMS, sensors and capital equipment industry. He can be reached via email at [email protected]. His background includes over 40 years in high frequency analog circuit design engineering, application engineering, project management, product marketing and technology consulting. He was a founding member of MANCEF and currently is its VP of the Americas. Specializing in microelectromechanical systems (MEMS) and sensors for over 35 years, he is considered a pioneer in this field.
Grace has authored more than 40 technical feature articles, organized, chaired, and spoken at more than 30 international technical sessions and is frequently quoted as an industry expert in major international technical and business publications. He is a recipient of the Outstanding Engineering Alumni of the Year in 2004 by Northeastern University and was bestowed the inaugural Sensor Industry Impact Award by Sensors Magazine in 2016. Mr. Grace held the position of visiting lecturer at the University of California at Berkeley from 1990 to 2003. His educational background includes a B.S.E.E. and M.S.E.E. (as a Raytheon Company fellow) from Northeastern University, and the MBA program at Haas Graduate School of Business at U.C. Berkeley.