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FROM THE EDITOR: SENSOR COMPANIES CAN GAIN FROM TARGETING HIGHER-MARGIN MARKETS.

Publication: Sensor Business Digest
Publication Date: 01-APR-03
Format: Online
Delivery: Immediate Online Access
Full Article Title: FROM THE EDITOR: SENSOR COMPANIES CAN GAIN FROM TARGETING HIGHER-MARGIN MARKETS.(Editorial)

Article Excerpt
SBD notes that sensor companies can benefit from addressing markets/applications that command relatively moderate or medium volumes (e.g., up to around 100,000 units or more annually) and allow for higher-priced sensors, compared to commodity applications. An emerging sensor company can particularly benefit by, at least initially, focusing on providing highly reliable, value-added, yet cost-effective products for key niche applications that do generate enormous volumes, as opposed to devoting an over-abundance of its resources to pursue ultra high-volume applications that may strain its present manufacturing, design and engineering, and quality control resources. Moreover, a company that provides more sophisticated sensor products that require a high degree of specialization and development work and are sold in low volumes is advised to examine opportunities for leveraging lower-cost versions of the product into higher-volume markets.

Companies that provide MEMS (microelectromechanical systems) products (i.e., micron-scale devices/systems fabricated using equipment and processes similar to those used to make integrated circuits) can also find key opportunities for establishing a beachhead in market segments that allow for higher margins and do not require very high volumes of product. Such markets/applications can include industrial process control, machine monitoring, data acquisition/recording, test and measurement, environmental monitoring, medical diagnostics/monitoring, and aerospace/military.

MEMS technology is particularly well-suited to manufacturing in very high volumes for achieving greater economies of scale. It is logical, therefore, that MEMS companies seek to optimize their fabrication and production techniques in order to be able to address large-scale existing or potential applications in such areas as automotive, consumer, medical monitoring/analysis, optical switches, wireless communication, genetic screening, drug development.

For example, MEMS accelerometers are used in very high volumes in automotive crash sensing for air bag deployment, and they have been increasingly finding expanding opportunities in such automotive applications as vehicle dynamic systems (which use a low-g accelerometer to determine lateral sliding and a gyro), ABS-equipped all-wheel drive vehicles, rollover detection (which uses a gyro, a low-g Z-axis accelerometer or a dual-axis accelerometer for reading vertical (Z-axis) and lateral acceleration), accelerometer), vehicle navigation systems (which use a gyro for heading information and a low-g accelerometer for dead-reckoning/position information). Low-g MEMS accelerometers have opportunities in non-automotive applications that could potentially generate very high volumes, such as mobile phones (that provide enhanced functionality, such as navigation/orientation, games, or motion-based scrolling of Web pages/other graphic formats), electronic games/toys; keystone correction in LCD projectors plugged into PCs (where the accelerometer helps maintain the proper projected image), home appliances, computer mouse, joysticks, physical therapy or fitness equipment, pedometers.

However, MEMS companies can efficiently grow and gain market share by undertaking considerable efforts to ensure that they can cost-effectively fabricate and produce product in smaller volumes in order to penetrate applications that require sufficient but not overwhelmingly high volumes. To be able to efficiently and reliably produce product for higher margin, relatively moderate volume applications, a MEMS company should focus on ensuring high manufacturing yields and on reducing its manufacturing/fabrication costs.

Packaging is a vital area impacting the cost, yield, and performance of a MEMS product, since the MEMS sensing element often needs to be in contact with the environment, while the electronics requires protection from the environment. Wafer-level packaging, which allows for packaging and encapsulating MEMS devices while they are in wafer format, can reduce the unit cost of fabricating MEMS devices and enhance manufacturing yield.

A key benefit of MEMS technology is its ability to offer more highly integrated, intelligent network-configurable sensing system solutions, including those that can offer sensing, actuation, communications,...

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