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Emerging Technology Report #38: January 9, 2003

Updates on Japanese and Taiwanese MEMS Foundry Service Providers

- Summary -

Global Emerging Technology Institute

MEMS (micro electro mechanical systems) are typically fabricated on a silicon wafer by using IC processing equipment and dedicated tools in a clean-room environment. Like computer chips, a number of identical MEMS devices created on the wafer are cut into tiny dies to be packaged for assembly. As such, MEMS production requires a significant capital investment in process equipment and clean-room facilities. MEMS can be used in systems for many industrial sectors, ranging from consumer, information technology, automotive, and medical equipment, to industrial process control, aerospace and defense applications. This means that the MEMS market is highly fragmented and each market segment tends to be small, except some "killer applications" such as inkjet print heads and micro-accelerometers for use in automotive airbag deployment systems. As a result, MEMS developers face a dilemma in which they must make a major capital investment decision even though the estimated market size for the target application is highly uncertain and would probably not meet internal ROI requirements. One solution to this dilemma is to rely on a third-party MEMS foundry service.

At the recent SEMI MEMS seminar held near Tokyo as part of the SEMICON Japan 2002, the largest exhibition for the semiconductor industry in Asia, several Japanese and Taiwanese companies discussed their strategies to grow the MEMS foundry business. The three Japanese firms that gave presentations at the seminar (Olympus Optical, Omron and Matsushita Electric Works) have accumulated expertise in MEMS design and production through research and development, demonstration of prototypes, and the commercialization of several MEMS devices over the years. Based on the expertise, Olympus now offers device design, prototyping, and production services to customers focusing on optical MEMS and microfluidics device areas. Olympus claims that the company can provide an integrated service ranging from design support to production, including packaging, using experienced engineering and process staff. Another Japanese firm, Omron started a MEMS foundry service in 2002. Omron's MEMS foundry capabilities are concentrated in 4-inch bulk micromachining such as anodic bonding and electro chemical etch stop (ECE). Other service offerings include silicon processes such as thin film deposition, wet/dry etching, electrode formation as well as glass wafer processes. Matsushita Electric Works has commercialized MEMS pressure sensors and accelerometers since the mid-1990s and started MEMS foundry activity in January 2002. Matsushita offers not only wafer processes but also packaging services. Matsushita Electric Works, like Olympus Optical and Omron, see business opportunities in the effective use of well-established MEMS engineering and production capabilities in-house in order to provide solutions to external customers and improve their balance sheet.

The goal of the Taiwanese firms, in a word, is "to let the history in semiconductor industry repeat itself in the MEMS industry." Walsin Lihwa Corp., a leading cable supplier, decided to enter the MEMS foundry business in 2000 as part of its business diversification and launched foundry operations in September 2001. At the SEMI MEMS seminar, Dr. Chien-Yung Ma, technology director of MEMS Business Unit at Walsin Lihwa, discussed the company's strategy of developing a cost-effective surface micromachining process named SMart® (Surface Micromachining for Applications and Research Technology Platform). SMart® is different from the de-facto industry-standard MUMPs® developed by Cronos in that it starts with 6-inch wafers to increase the number of die locations usable on a single chip, compared to Cronos' 4-inch processes. In addition, Walsin's SMart® process integrates many test areas for process inspection, material properties testing, and functional inspection in order to ensure the reliability of processes and the maintenance of a supplemental database for the customers, according to Dr. Ma. Another Taiwanese MEMS foundry service provider, Asia Pacific Microsystems Inc. (APM) was founded in 2001. APM raised $50m in the first round of financing and bought production facilities from Winbond, a large IC foundry, to start foundry services using 6-inch wafers. APM offers surface, bulk and SOI micromachining, SCREAM (single crystal reactive etching and metallization, a dry etching process to obtain laterally driven, single-crystal micromachines), and wafer-level packaging capabilities. APM places an emphasis on enhancing packaging solutions such as WLCSP (wafer-level chip-size packaging) and SIP (system-in-package). Both APM and Walsin have won orders from customers abroad and are very aggressive in business development and strategic alliances.

According to the presentations made by the various MEMS foundry service providers, there seems to be a considerable difference in business philosophy between Japanese and Taiwanese players. The Japanese players are more engineering service-oriented and mindful of overcoming (mostly Japanese) customers' prototyping challenges rather than resolving cost problems. The Taiwanese firms look confident to receive large-scale orders from overseas customers by offering cost-effective, standardized access to MEMS prototyping and volume manufacturing. Reportedly, a number of US MEMS foundries have lost orders to these Taiwan firms due to yield and cost reasons.

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