News from The Freedonia Group, Inc.: US MEMS Demand to Reach $3.3 Billion in 2008

CLEVELAND--June 21, 2004--The US market for micro-electromechanical systems (MEMS) is projected to increase better than 19 percent per year through 2008 to $3.3 billion. Fueling gains will be further recovery in technology sector business fundamentals, advances in MEMS design and fabrication techniques, and an expanding scope of applications for MEMS-based solutions. MEMS products holding especially good prospects include optical switches for both telecom carrier and internal corporate networks; radio frequency (RF) switches and relays for wireless phones and related devices; and advanced actuators such as biochips for complex biomedical testing and analysis.

The fledgling MEMS business was adversely impacted by the early 2000s tech sector downturn, with revenue growth just modestly positive in 2002, followed by a moderate pickup in 2003 that accompanied the recovering macroeconomy. Optical switches for telecommunications networks -- which had been one of the hottest segments of the MEMS market around the turn of the millennium -- were particularly hard hit, as capital spending in the telecom sector literally dried up beginning in 2001. By contrast, demand for MEMS-based microdisplays held up relatively well, providing offsetting support to the market as a whole.

The three best established products within the MEMS market -- airbag accelerometers, ink-jet printer heads and blood pressure monitoring sensors -- are becoming mature, and will register respectable although by no means stellar growth over the next several years. As a result, the strongest gains will occur in new products and emerging applications.

Among end users, the most rapid growth will occur in the telecommunications sector, as MEMS-based optical switching finally begins to gain some commercial traction along with recovery in sector capital spending, and as the market for MEMS-based RF switches and relays continues to develop.