MEMS players: Analysis of financial performance

LYON, FRANCE: Yole Developpement has released a new study dedicated to help decision makers evaluate MEMS companies’ corporate value and growth strategies.

Supported by Yole’s powerful MEMS industry analysis, this report presents key metrics that are used to evaluate corporate financial performance and valuation.

This report includes: the analysis of MEMS industry corporate performance with market, technology and financial perspectives; two complete databases of MEMS companies’ financial transactions (fundraising and M&A); and, a benchmark of MEMS companies multiple value and financial performance ratios by business model.

Designed as a tool to support both MEMS companies and investors in their decision making process with the relevant key indicators, this report will help determine:
o Where to invest in the MEMS area.
o The best business model for MEMS today.
o How to benchmark a MEMS company.
o How to optimize MEMS company value.

MEMS remains an attractive industry for financial and strategic investors
Several market segments are well‐positioned for high growth in the coming years as the MEMS industry continues to expand. Companies founded in early 2000 have now entered the top 30 MEMS manufacturers alongside the large established players.From the latest cell phones and gaming devices to vehicle safety and environmental sensing, the MEMS industry now provides mission critical functionality for a vast array of products and applications in defense, automotive, medical, industrial, communication and consumer markets.

The MEMS industry contains several high‐growth opportunities for financial and strategic investors. “Our analysis shows that in the past three years, more than 35 strategic investments have been made through acquisitions and VCs have invested more than $800 million in the industry” explained Géraldine Andrieux Gustin, Partner at Yole Finance. VCs are still actively investing in next generation solutions, especially in the cleantech sector.

As the economic cycle moves towards recovery, M&A activity will accelerate too. Now is the time for MEMS companies to adapt their growth strategy in leveraging their value with the help of Yole Développement’s report.

The economic cycle will impact the financial transaction market. Opportunities will arise rapidly for MEMS companies as investors seek to solidify positions necessary for future growth.

Execution of corporate strategy will require additional capital. “More than ever, companies will need to consider their value creation process while considering acquisition, selling out or consolidation strategies. They will need to leverage their corporate value with the best dedicated business model”, said Géraldine Andrieux Gustin.

Yole Développement’s analysis provides MEMS companies with key data to conduct their own benchmarking and first assessment of their company’s value. Companies and investors will also have a clear picture of what happened in the MEMS area with a detailed database of more than 400 financial transactions since 1998.

Yole Développement provides fundraising and M&A services
Yole Finance is the corporate finance unit of the Yole Group addressing the needs of customers at various stages of their growth: early stage, expansion and maturity.

Yole Finance focuses on fundraising and M&A activities with additional capabilities in IP value creation, growth strategy development and implementation. It includes supporting clients in the establishment of strategic partnerships all along their development.

Yole Finance works with seed and early stage companies with next generation solutions for the semiconductor sector especially equipment and materials, MEMS, microfluidics, photovoltaics, compound semiconductors, power electronics and advanced packaging. The Yole Finance team brings together a unique combination of experience and skills in advising clients on global cross‐border transactions in the technology industry for the past 20 years.

Compound semi: Bulk GaN market in 2009

FRANCE: How will the price decline of free-standing GaN material open new doors in lighting and power applications? The “Bulk GaN Market 09” report from Yole Developpement analyses free-standing bulk GaN substrates in various applications: Blue Laser Diodes, HB-LED and Power Electronics.

Is there a life for bulk GaN substrate out of the blue laser diode business? How will material price decline open new doors in lighting and power applications?

From blue lasers to lighting and power electronics
Today, bulk or Free-Standing (FS) GaN substrate market is mostly driven by the blue laser diode production only and its related application in high-density data storage. This market is driven by strong demand for Bluray players and game stations.

From 2011 and most likely 2012, Ultra-High Brightness (UHB) LEDs will start taking part of the bulk-GaN production. That will only be possible with a sharp drop in bulk-GaN prices. We forecast that the critical threshold is below $1,500 for a 2" "LED-grade" substrate. Only such a price level will act as leverage for LED market take-off. 2012-2013 will also see the introduction of new power devices based on bulk-GaN.

Again, here, that is strongly linked to the pricing of bulk-GaN that will have to compete with 4" and future 6" SiC offer and GaN-on-Silicon alternate technology.

Lack of bulk material pushes for ELO technique
Market is now essentially centered on free-standing material but the shortage of this product has to be compensated by the use of home-made ELO-GaN on sapphire substrates. We assume about 28% of LD was made on ELO-GaN in 2008. This percentage will decrease a little but will stay significant by 2012.

Asia dominates the substrate business but EU and US exhibit credible challengers
The main free-standing producer remains Sumitomo, mostly supplying Nichia and Sony for laser production. Others challengers such as Hitachi-cable (now sampling 3" wafers) or Mitsubishi Chemical are becoming more and more present.

In Europe, LumiLOG, now part of Saint-Gobain group, is fine-tuning its product line-up for the LED illumination business; Ammono and TopGaN are improving their strong expertise in low dislocation density crystals.

US is mainly focusing on non or semi-polar material, with Kyma, Inlustra Technologies or Oxford Instruments (TDI).

By 2015, bulk GaN for LED will dominate the substrate market in volume

The 2" substrates production volume could reach about 100,000 units by 2010, leading to a relative $240M market for both free-standing and ELO. Beyond 2013, the growing demand for bulk GaN in LED lighting applications will rapidly dominates the market in volume.

This report presents the detailed major market metrics of the current and projected bulk / free-standing GaN substrate business, describing the targeted applications, the key players, the volumes and related market size of each segment.

It gives the possible total accessible market for GaN substrates, highlighting the strengths and weaknesses of this technology over the current established epiwafer or ELO technologies. It describes the recent progress in crystalline quality as well as the new challenges offered by non-polar and semi-polar GaN material.