El Segundo, Calif. — Revolving around the needs of Apple Inc., the global market for microelectromechanical system (MEMS) microphone chips is split into two segments – bare dies and packaged MEMS – that are dominated by two suppliers Knowles Corp. and Infineon Technologies AG, reports IHS Technology.
U.S.-based Knowles was the biggest supplier of packaged MEMS microphones, while Germany’s Infineon was the leading supplier of bare MEMS dies to MEMS microphone makers in 2013, according to a new report from IHS Technology. Knowles accounted for 59 percent of the market’s total revenue among packaged MEMS microphone suppliers in 2013, up from 55 percent in 2012.
In a distant second place is AAC with 13 percent revenue share, followed by No. 3 Goertek with 7 percent share. Both Chinese suppliers depend heavily on Apple’s business, according to IHS. AAC grew 8 percent, and Goertek grew 35 percent due to its entrance into the high-performance microphone market for mobile handsets. No. 4 ranked BSE of South Korean supplies MEMS microphones to Samsung, which helped drive its revenue up by more than 250 percent from 2012 to 2013, according to the report. Tied in fourth place with BSE is STMicroelectronics, which grew its business significantly thanks to design wins in the iPad.
While Knowles designs its own MEMS, other manufacturers including AAC, Goertek, BSE and Hosiden buy standard MEMS die and an application-specific integrated circuit (ASIC) and then packages them under their own brand, said IHS analysts. All four of these companies are historically manufacturers of electret condenser microphones with no experience in traditional MEMS or semiconductors; however, they have expertise in acoustics, assembly, and packaging, said analysts.
In the bare die side of the market, Infineon holds 78 percent of the MEMS die business in terms of unit shipments. The semiconductor maker supplies to major customers like AAC, Goertek, BSE, Hosiden and Chinese-based Gettop. Infineon’s revenue growth was up 204 percent in 2011, and up another 50 percent from 2012 to 2013, according to IHS.
However, two suppliers – Omron Corp. and New Japan Radio – want a bigger piece of the pie. Omron is expanding its business in China and Taiwan in addition to supplying its primary customer STMicroelectronics, which may be developing its own microphone die, according to IHS. New Japan Radio is growing its sales by supplying a Korean module maker.
Apple and Samsung are the biggest buyers of MEMS microphones, according to IHS Technology, which forecasts the market to grow 24 percent in 2014 to reach $1.04 billion, up from $836.9 million in 2013. IHS projects revenue to reach $1.37 billion by 2017, with a five-year compound annual growth rate (CAGR) of 18 percent from 2012 to 2017. This translates into 5.4 billion unit shipments in 2017, up from 1.9 billion in 2012.
The new report, “MEMS and Sensors Report – Microphones – 2014,” indicates that Knowles has been successful in growing its business by supplying high-performance microphones at a price premium to Samsung and Apple, which is the leading buyer of MEMS microphones. Knowles supplies two of the three high-performance MEMS microphones in Apple’s iPhone 5s, as well as one of three in the iPhone 5.
Apple dictates supply chain dynamics in the MEMS microphone market, and was the first to use the high-performance MEMS microphones in 2012 with the iPhone 5, according to IHS analysts. They are now also used in Apple’s iPad and headsets.
“Because Apple releases a huge-selling handset every year, and given the severe penalties imposed by Apple for delays, the MEMS microphone supply chain must overestimate component supplies in order to ensure it can meet Apple’s demand,” said Marwan Boustany, senior analyst for MEMS and sensors at IHS, in a statement. “This, in turn, leads to microphone inventory being accumulated at every point in the supply chain.”
This is coupled with inflated inventory building in the bare die business in order to compensate for yield losses throughout the supply chain, including wafer dicing, packaging, and assembly on the printed circuit board, said IHS.