Micro-electro-mechanical systems (MEMS) promise that by combining silicon-based microelectronics with micro manufacturing technology they could revolutionize any number of industries. A new In-Stat/MDR report examines how they're doing.

The report, "It's Raining MEMS: 2002 Industry Overview," found that nearly every major market has embraced MEMS technology to varying degrees. It also forecasts that worldwide revenues for MEMS will grow from $3.9 billion in 2001 to $9.6 billion in 2006.

Much like the economy in general, the success that players in the MEMS industry had in the past year depends on which sector they are in. Marlene Bourne, a senior analyst with In-Stat/MDR, told NanotechPlanet that optical networking is one sector where things haven't gone quite as well in the past year. "It's not exactly halted," she said, "but it's really, really slowed."

The other side of the coin is the medical industry, which Bourne said benefited from lab-on-a-chip advances.

One MEMS trend identified in the report is the shift from sensor-driven revenues to non-sensor driven revenues. In 2001, non-sensor devices comprised nearly one-third of total MEMS revenues, but by 2006, they will account for almost half. The report also expects the overall average selling price for MEMS to increase 25 percent over the next five years, as more expensive, non-sensor devices enter the market.

Unit shipments will double over the next five years from 1.85 billion units in 2001 to 3.61 billion units in 2006. This is the result of both the introduction of new devices, as well as the emergence of new application opportunities.

"Commercialization tends to come in waves," Bourne said. She expects MEMS-based fuel cells and other power-generation devices will be the next offerings from the MEMS pipeline.

Despite a decrease in VC funding, the report found that MEMS startups continue to emerge. This is leading to a fabrication overcapacity that reminds some of the semiconductor market. While boom-bust cycles like those seen in the semiconductor market don't appear likely for MEMS, Bourne said consolidation in the MEMS market is likely.

"That's going to be real interesting to watch," Bourne said. "I expect some of the fabs are going to go away, but others continue to build."