InvenSense on the evolution of the MEMS market: Think software and use case!
MEMS & Sensors - July 23, 2015
The MEMS sensors are at the heart of the evolution of IoT applications and especially in the wearable field. According to Yole Développement’s report on Sensors for wearable electronics and mobile healthcare, we can expect a growth from $23B in 2015 to $88B in 2020, representing almost 284M units, spread among consumer, healthcare and industrial markets.
However, such evolution could be conditioned by a simple question. What are the real usages of the wearable systems?
To be accepted, wearables must provide an added value for a specific use case, if they don’t, they won’t performed, if they do, that’s means that the sensors functions match perfectly with the software enabling easy use of the sensor. And it’s all here, wearable penetration is conditioned by the perfect fit between software and hardware, based on the real case of applications.
Discover our recent interview with Behrooz Abdi, President and CEO at InvenSense.
Yole Développement: Can you introduce InvenSense’s product line in the MEMS market, its history and current activity?
Behrooz Abdi: InvenSense Inc. (NYSE: INVN) is the leading provider of intelligent sensor system on chip (SoC) for Motion and Sound solutions for consumer electronic devices. The company's patented InvenSense Fabrication Platform and MotionFusion® technology address the emerging needs of many mass-market consumer applications via improved performance, accuracy, and intuitive motion-, gesture- and sound-based interfaces. InvenSense technology can be found in Mobile, Wearables, Smart Home, Industrial, and Automotive products. InvenSense reached a $372M net revenue in 2015, with a very strong growth from 2014.
YD: What are the competitive advantages of your products?
BA: The new technology platform mixing CMOS IC technology and MEMS assembled together by stacking is a key advantage of InvenSense. This technology allow us to make thinner, higher performing devices with the integration of 3-axis accelerometer and 3-axis gyroscope in the same silicon. Such technology enables to have MEMS devices that behave like CMOS.
At the beginning of the company, the first product was a gyroscope for consumer applications. But it was just a start. A discrete device is not enough: most customers do not know how to integrate inertial sensors in their products. So the only way to accelerate the market and capture more value is to provide functions embedded in software and use case.
Another competitive advantage of InvenSense is its portfolio of algorithms and software, able to provide motion solutions to InvenSense customers and simplify the development of applications. With a community of more than 25,000 developers, the value for them of such solutions portfolio is very high.
YD: What was the rationale behind the acquisition of Movea last year?
BA: The acquisition of Movea brings not only additional software and solutions for motion sensing but also for audio applications and additionally more that we have not already realized. So yes, we are very positive on this acquisition and the impact on the long term growth of InvenSense.
YD: InvenSense has diversified its activities in microphone, why?
BA: The microphone applications are a very important market, with more than 5B units shipped every year, which means a large market in dollars if you are adding microphone, audio codec and related devices. InvenSense has developed its own device and made the acquisition of ADI microphone business line, which was a good added value to InvenSense’s own portfolio of products. We have now the best technology in term of S/N ratio and power consumption. We currently have multiple design wins outside the mobile phone applications and InvenSense is now entering the mobile phone microphone area, from low end to high end devices. Audio software is also under development at InvenSense in a similar strategy compared to motion sensing: which is to be able to deliver high functionalities to the customer, not only a sensor.
YD: InvenSense shows a nice growth since several years, especially thanks to smartphones
market, however, we see a small decrease of the growth of this market in the US and European market, are Chinese and emerging countries smartphones OEM the next step?
BA: Well… InvenSense growth last year was 70%! Q1 was stable compared to 2014 but normally, our strongest quarters are Q3 and Q4. From what we can see at the moment, the rest of the year will be great! We are where we want to be in term of market share.
YD: Are you still interested by the higher-end market?
BA: More diversification will come as the overall activity in the markets continues to grow. The technology developed 10 years ago has no foreseen limits for its adaptation to the high end applications, this is just a matter of priorities and focus. We think at InvenSense that now the automotive and industrial applications for motion sensing are big enough to attract our interest and investments. So yes, we are interested by such applications and working on it at the moment.
YD: Smartphones has been the major market driver for MEMS for the last 5 to 10 years, wearables and IoT seems to be future opportunities.
BA: IoT will be significant in term of market opportunity but it will take time. InvenSense customers need the channel to develop such applications and it’s a matter of time and investment. InvenSense 25,000 developers will be a critical advantage to reach that kind of diffused applications and markets.
YD: Many people were surprised to find a STM 6-Axis IMU in the Apple Watch, do you think there’s a chance to find an InvenSense’s sensor in future versions?
BA: We do not comment on specific customers. Winning a socket is a matter of cost and competition and we have seen in the past, sockets that have been shared among different suppliers.
YD: What are the key challenges for the wearable market?
BA: Wearable applications are still searching its use case; and the growth of that market is all about finding a real use of such systems. Time is now needed, after the launch of multiple products with limited production in volume, to create really exciting products. InvenSense is developing a complete library of use cases linked to wearable applications using our software portfolio. We will then enable the emergence of the major use cases that will help drive the growth of wearable applications.
YD: Do you see technological breakthrough in the MEMS market in the coming years, if yes which one? Which sensors do you think will be the most promising for the future?
BA: The entire MEMS industry is involved in a very strong innovation phase, at the device and processing level. Architecture of devices are changed in order to follow the price decrease, we here at InvenSense are improving the performances, and providing more freedom to the developers.
YD: InvenSense acquired a competitive advantage with its innovative packaging, what do you see as the next technological “game changers” for MEMS: advanced packaging, sensor fusion, 300mm production, piezo thin films...?
BA: We do not provide data on InvenSense plan on 300mm nor on the other technology changes that we see in the industry. 200mm is the platform we are pursuing for manufacturing at the moment and this is where a lot of innovation will happen in the next years.
YD: InvenSense is well positioned in sensor fusion with FireFly, you acquired Movea and Trusted Positioning last year, are you willing to acquire new companies related to the sensor fusion topic?
BA: The acquisitions have been important in order to help InvenSense to provide use case solutions and continue to move up in the value chain. This is a common challenge for the entire MEMS industry, otherwise we will all manufacture commoditized products in the next 2 years.
This added value strategy at InvenSense drove us to launch the FireFly sensor fusion device, with an integrated framework optimized for motion processing, no need to bring up a MCU, totally independent to the platform you are targeting and optimized in term of power and performances. InvenSense 6-axis and 7-axis context aware motion hub are able to provide more than 7 built-in functions, like accurate calorie count, elevation change, always on gesture, activity classification.
You will see in the next months a series of new products that are using the integrated sensor hub and we consider at InvenSense that we are providing an enabling product for the developer community.
YD: What are your perspectives for the future?
BA: InvenSense is a Sensing Everything™ company, so yes, we are looking at multiple new devices linked to environmental sensing, biometric identifications. These types of devices are for us the next big opportunities. Technical challenges exist in order to manufacturer such device at the right price with the right specifications, but the use case is also extremely important. InvenSense is working in parallel on multiple new devices, both on the design side and use case side.
Concerning M&A, 2014/15 has been an active year. We continue looking at potential opportunities in an optimistic way.
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