Opinion: ST riding high on the MEMS tide

When it comes to microelectromechanical system (MEMS) components, STMicroelectronics has still got its mojo.

Market analysis company Yole Developpement (Lyon, France) has emphasized just how well ST and many other companies are doing in MEMS with its top 30 ranking for 2011. ST is both an IDM with products under its own brand and a foundry supplier to Hewlett Packard Co. and others and ST's total MEMS sales leapt from about $600 million in 2010 to $907 million in 2011, according to Yole.

But the fast growth curve that ST is on in MEMS, and the design slots it is believed to hold does mean that there may not be a lot more upside for ST and there is some potential downside if it should get designed out. [If you are wondering about what design slots think about something green, round and nice to eat.] Of course, getting designed out of any product is always a possibility and most companies would want to be the incumbent rather than the wannabe trying to usurp someone else's design slot.

Either way the top 30 ranking serves to underline what exciting, dynamic times we continue to live in.

While the IC market was essentially flat in 2011 and stalled at $300 billion in value in what was generally perceived to be a "difficult" year, the MEMS market showed no signs of it and grew 17 percent to $10 billion in annual sales revenues, Yole reckons.

Only a few days ago I was writing about how ST was suffering the "boat-anchor" effect of its ST-Ericsson mobile handset chips joint venture weighing down on its financial results and how the company might do well to try and sell it off to an interested party or parties from China. I also said that would leave ST free to focus on the things it does well, including MEMS.

According IHS-iSuppli, another market research firm, ST was the seventh largest chip company in the world in 2011 with revenue of $9.792 billion which puts its MEMS revenue at about 9 percent of its total semiconductor sales in 2011.

And there is every sign that MEMS as a percentage of total chip sales will continue to grow at a rapid rate, both for ST and the industry as a whole, as the MEMS market faces almost perfect growth conditions right now. The rapidity of the rise is phenomenal. ST has shown, courtesy of slide presentation from senior executive vice president Carmelo Papa, that its sales of MEMS, excluding foundry work done for HP, has gone from $30 million in 2006 to $650 million in 2011; a more than twenty-fold increase in five years.