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Taiwan prepares for MEMS technology battle

Posted: 12 Aug 2002 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor? MEMS? optical switch? microdisplay?

Taiwan is looking to repeat its success with semiconductors by tackling both the design and manufacture of microelectromechanical systems. At least 20 companies focusing on MEMS devices have set up shop in the country, with more to come. At the top of the food chain are Walsin Lihwa Corp., a foundry, and Asia Pacific Microsystems Inc., an integrated device manufacturer.

The activity stems in part from a government drive to seed the MEMS industry here by setting up academic centers for R&D and by incubating design houses. The third prong of the MEMS strategy devised by Taiwan's government research lab, the Industrial Technology Research Institute (ITRI), is to encourage the establishment of foundries, and within the past year the private sector has built a handful of them.

No one is sure which business model will work best for Taiwan - pure-play foundry or integrated device manufacturer - and "at this point, we are incubating both," said C.K. Lee, a MEMS researcher. "Both sides have their pros and cons. History says foundry will win. But the IDM perspective is very interesting." Personally, Lee said he would like to see a system design industry emerge, anchored by fabless companies, since that is where he thinks the better money will be.

"If Taiwan wants to move away from always being the low-cost manufacturer, then we must do this," Lee said. "We are in the right time and the right place for MEMS."

Indeed, with a widening of potential uses, from car tires and hearing aids to optical switches and microdisplays, interest in MEMS has gained considerable steam worldwide in the past year or two. Design shops and MEMS fabs have been popping up everywhere, triggering a capacity glut in an industry barely off its training wheels.

The Asia-Pacific region is especially active, with startups in China, India, Japan, South Korea, Singapore, and Taiwan all pursuing MEMS. Meanwhile, 54 fabs are already established, 17 of them in the United States, seven in Germany, six in Japan, and five in Taiwan, according to InStat/MDR.

Everyone is chasing a market expected by some estimates to hit $9.6 billion by 2006, up from about $3.9 billion last year. That includes revenue earned by well-established players like Motorola Inc. and Texas Instruments Inc. with their own devices. With so many players, cutthroat competition is a given and a shakeout seems inevitable.

"By and large I would say close to 50 percent of the MEMS startups have their own in-house prototyping capability and as a result also have the capability for low-volume production," said Marlene Bourne, who covers emerging semiconductor applications for InStat and recently finished a market report on MEMS.

Analysts believe the glut will worsen next year. Eventually, for those that survive it, there may be some low-hanging fruit. The average selling price for MEMS devices will shoot up 25 percent during the next five years, Bourne said, as more expensive, non-sensor devices hit the market. She calculates the greatest opportunities to be in the communications and consumer sectors. Based on revenue, compound annual growth through 2006 should hit 151.4 percent and 42.2 percent in those two market segments respectively, she said.

What gives Taiwan an edge, say industry players, is its strong background in foundries and CMOS manufacturing, plus its ability to drive costs down. Also potentially helpful is the close integration of Taiwan's academic R&D with the activities of local companies that are already producing more mature MEMS products, such as inkjet heads.

Two chief players

The two chief players in Taiwan, Walsin and Asia Pacific Microsystems (APM), are taking different paths to MEMS. Walsin, a conglomerate looking for growth, is going the foundry route, while APM has set up as an integrated device manufacturer.

Already successful in traditional areas like steel, copper wiring and optical fiber for power and telecommunications applications, Walsin also has semiconductor experience through its stake in Winbond Electronics Corp., a memory and logic maker. After a few fact-finding trips to the United States, Walsin president Cheng I-lin persuaded his group chairman to take the plunge into MEMS. A year later, after $50 million in equipment purchases, the company said it is ready to process 5,000 eight-inch wafers per month in a Walsin factory once used for making magnetic wires. Cheng hopes to reach 15 percent capacity utilization by the end of the year.

"That is a small portion but we are a startup and have to prove our capability," he said. "We are not just making existing products. We are making some very new structures that are only on the drawing board, so the challenge is how to do it efficiently so that it makes economic sense."

Walsin initially transferred its process technology from ITRI, the government-sponsored lab that has studied MEMS for several years and helped seed the industry here. The startup is augmenting its know-how through additional technology transfer and collaboration with Memscap, an emerging player based in Crolles, France that has impressed analysts.

Walsin will use the European company's RF-MEMS component designs and process recipes to increase fabrication yields for devices such as inductors, switches, and variable capacitors. Walsin believes that will help it gain a foothold in end markets including 3G mobile phones, wireless local loops and LANs and emerging applications such as tunable antennas.

"RF MEMS will be another wave to boost the widespread use of MEMS technology and applications," Cheng said. Optical MEMS will come about three to five years later, in his view. The challenge there, he said, is proving reliability during the life span of the device. "A dust particle may impair the whole structure or the humidity will make the structure stick. In an optical switch, if something like that happens, then your wavelength may be transmitted to somebody else instead of the intended destination," Cheng said.

Consequently, the drivers are likely to be devices that do not require such a high level of reliability. For instance, the first product at Asia Pacific Microsystems is a pressure sensor, a mature product that still has potential for high growth.

APM, which has a 6-inch wafer fab coming online in October, has used the pressure sensor product to tune its manufacturing process. Eventually, the company says it will spin off its design units and operate as a pure-play foundry. But at this early stage, APM executives believe the IDM model is necessary to get money flowing in and establish a track record. "If you can deliver the pressure sensor, then you can guarantee the foundry service to some extent," said CEO Lin Min-shyong.

Lin expects next year to be crucial for his business. By then the company can show real products, developed on homegrown design and manufacturing processes, and hope that system design houses will start to notice. In communications, for instance, Lin will be shopping an integrated RF module to old friend K.Y. Lee, the CEO of Benq, an Acer Inc. subsidiary that makes computer peripherals and handsets.

At the moment, most Taiwanese MEMS players have their own boutique design and manufacturing processes. Because there are no standard processes or cell libraries, the engineering effort is often more complex and time-consuming than necessary.

There is talk of taking the "art" out of the manufacturing process, said InStat's Bourne, so that more products may be made on a generic process similar, in theory, to the plain-vanilla ones offered by semiconductor foundries that fit a wide range of customers with only minor tweaks. "The name of the game is to get costs down to drive more market opportunities," Bourne said.

As competition with U.S., European and Japanese MEMS producers increases, Taiwanese players are counting on their strong ties to university talent and research to give them an edge. MEMS researcher Lee and his students at National Taiwan University are offering consultation services to local companies, which Lee said are gladly accepted. "Any major project must have a direct impact to the local industry. At the same time, we require advanced research," he said.

Lee, who is a former IBM Corp. researcher, said that his experience "gave me a very strong perspective that high-tech designs require lots of research."

- Mike Clendenin

EE Times

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