‘A trillion sensors, a million applications and a fragmented market ’
In a hyper-connected IoT world it is not hard to imagine a trillion sensors collecting rich amounts of data that will provide new insights that will shape the way we live in our intelligent homes or commute in our self-driving cars. There is certainly no shortage of market research predicting healthy growth in the market for such sensors. This has led to much discussion about how to economically manufacture large volumes of sensors and the potential need for new manufacturing technologies, such as roll-to-roll printing, to meet these needs.
While there will undoubtedly be a need for high volumes in some applications, a closer look at the market predictions tells a different story – one of deep fragmentation where there is tremendous diversity in both markets and applications within those markets. Essentially the opportunities for electronic sensors comprises of thousands of niches where annual volumes can range from hundreds to thousands of sensors – with very few applications with requirements for millions or billions of sensors of the exact same type.
Why does this matter?
What this means is that the demand for new sensors can be mostly satisfied by existing semiconductor processing & packaging techniques and in many application cases, the volume of wafers required will actually be quite low. If we take a typical 150mm wafer with a sensing element that is 4mm2, a single batch of 25 wafers can produce close to 90,000 sensors (assuming an 80% yield) – enough to satisfy the annual needs of many companies. Such low wafer volumes are not interesting to most contract manufacturers and the actual production cost is dwarfed by cost of R&D to develop the sensor and to potentially transfer the technology to a new facility.
Sensor development versus manufacturing costs
The process of developing new MEMS, micro or nano-electronic sensor elements can be an expensive business. Depending on the complexity of the sensor and the maturity of the technology platform, development costs can run into millions of euros and take upwards of 2 years. While some companies do all of the work in-house, many others partner with R&D organizations, leveraging public funding and national infrastructure to develop the technology platform to a level of maturity where realization of multiple individual products is viable.
To use an example from VTT, a hyperspectral MEMS sensor manufacturing platform may have cost €5M to develop over 3 years yet a single batch of 25 wafers for a specific application might cost between €50 & €100k to manufacture and could yield upwards of 50,000 sensors. If these sensors are subsequently integrated into an instrument that sells for €1,000 per unit, then a €50M business is enabled and sustained from a very low wafer manufacturing volume.
Historically, the prevailing logic has been to take the developed process and then transfer to a production facility but does this always make sense? Manufacturing processes for MEMS sensors are notoriously specific to the process flows, recipes and equipment on which they were developed and undertaking a technology transfer project to a new facility can be expensive and time consuming. If the subsequent volumes are low, it does not make economic sense to redevelop processes for a new facility as these costs may well exceed the ongoing low-volume manufacturing costs.
Many sensors but few wafers – Manufacture in an R&D Fab
When ongoing production needs are relatively low (<1000 wafers per year) it’s worth considering your R&D partner as a primary or secondary production source for sensor elements. In fact it offers you a direct path to production with some major benefits. Being able to save on conducting an expensive and potentially risky technology transfer project will likely offset any component price benefit gained by moving to a pure production fab.
In an increasingly fast moving world, it is also possible to accelerate time-to-market by many months which can be especially beneficial to SMEs where cash flow is critical and lost time is lost revenue. It’s also worth noting that while the sensor element is the key enabler of many systems, the product value tends to be created at a system / service model level, with the actual sensor being a relatively small part of the overall system cost. Why undertake a risky tech transfer to reduce the cost of a €10 sensor by €3 when the system as a whole sells for €300 or even €3000?
From a business strategy perspective, the important question to ask is “Does the future marginal cost benefit of manufacturing in a production facility, exceed the combined value of the lost time, risk and cost of a tech transfer project?” Any technology transfer project should have a sound financial justification measured over the expected production timescale and total system costs.
A seamless route from R&D to volume manufacturing
There are a number of RTOs such as VTT that will offer manufacturing services as it’s a good way to better utilize expensive fabrication facilities and ensure financial sustainability and future investments. It can also be useful to have the researchers who developed the product, be readily available to troubleshoot if production issues occur. That said, there are pitfalls to be avoided (particularly operational and quality procedures that are geared purely towards R&D) and you should ensure that your partner has an organization that is managing the fab operations in a professional way to ensure both process capability and repeatability.
By providing the necessary operational competence and quality certifications your R&D partner could be your credible production source – offering you a ‘seamless route from R&D to volume manufacturing’ in sensor production.
Vice President, Micronova manufacturing services