MEMS suppliers suffer from shrinking automotive sales
Some automotive applications for MEMS continue to thrive amid the downturn, driven by government mandates for electronic stability control systems.
By Gail Flower, Contributing Editor -- EDN, March 27, 2009
The economic crisis has hit the automotive industry with shipments down 6% in 2008 and predicted to sink to 19% in 2009 year-over-year, according to iSuppli Corp.
As the automotive market sinks, so do its suppliers. Concord, Calif-based Systron Donner Automotive, formerly the world’s second-largest supplier of car quartz MEMS gyroscopes, has shut down in response to the global automotive industry downturn, according to iSuppli.
The company's France-based owner Schneider Electric laid off 87 engineers at Systron Donner Automotive before Christmas 2008, leaving a skeleton crew at the company, according to the market research company.
“This is a major turnaround for a company that sold nearly $105 million worth of MEMS vehicle dynamics gyroscopes in 2008, giving it the second rank in the market behind Bosch,” said Richard Dixon, senior analyst, in a statement.
“The total MEMS market was $6.2 billion in 2008,” said Jeremie Bouchaud, iSuppli's director and principal analyst for MEMS.
"The automotive MEMS sector was $1.7 billion in 2007, falling to $1.5 billion in 2008, and is still contracting another 15% in 2009, predicted to be $1.3 billion in 2009,” Bouchaud said.
There are lots of players in automotive MEMS, Bouchaud said. Bosch ranks number one. Denso (integrated and in a good position to survive) is number two, according to iSuppli. Freescale’s automotive MEMS business, at number three spot was down only 3% in revenue in 2008. Sensata, leader in high-pressure sensors used in electronic stability control brake modulators gained market share, according to Bouchaud. And Infineon also increased slightly in 2008.
“We believe that Systron Donner Automotive failed for more than just the market shrink; they had an older, higher-priced technology, quartz, not silicon,” said Bouchaud. “And in the past, vehicle stability gyroscopes were only in high-end cars, so not as many autos were sold with this particular MEMs device. Now that this type of MEMs gyro safety stability device will be mandatory in 2012 in the US, it will be a commodity item in every car.”
Other researchers confirm Bouchaud’s information. Jean-Christophe Eloy, president and CEO of Paris-based Yole Developpement said, “The shutdown of SDA [Systron Donner Automotive] was known since January and is mainly the output from a strong decrease of the overall MEMS automotive business and a strong market entry of new competitors in the electronic stability control systems business with silicon technology, Panasonic, for example, which has impacted heavily the business of SDA,” said Christophe.
“The company was under competitive siege and already was beginning to lose market share it its key long-time customer, Continental, to Panasonic, which is offering a cheaper product,” said Dixon in iSuppli’s report.
Some automotive applications for MEMS continue to thrive amid the downturn, driven by government mandates for ECS (electronic stability control systems). These systems require at least three MEMS sensors: a gyro, an accelerometer, and a pressure sensor. ESC systems will be mandatory on all passenger vehicles sold in the US starting in 2012 and in the European Union beginning 2014. As a result, iSuppli’s latest automotive MEMS tracker forecasts the resumption of healthy double-digit growth in automotive MEMS in 2011.
