MEMS/Sensors Marketing: Oxymoron Or Opportunity - Episode Eight

Sensors/MEMS Marketing: Oxymoron or Opportunity, Episode Two

Sensors Insights by Roger Grace

Introduction

Happy New Year and welcome to this, the eighth and final episode of my tutorial series, Sensors/MEMS Marketing: Oxymoron or Opportunity.   In the approximately 20,000 words that have constituted these episodes to date from its inaugural episode which appeared on September 22, 2017, I have attempted to distill the key elements of marketing that need to be addressed by participants in the sensors/MEMS community who are responsible for the marketing function in their organization to enhance their organization’s success.

This episode will provide insight into the frequently asked question, what are the similarities and differences between IC and Sensors/MEMS marketing strategies and tactics?   The second part of the episode will provide a summary and conclusion to this tutorial series which, I would like to believe, has delivered valuable and practical insights from approximately 20 industry luminaries with an aggregated number of years of experience in the sensors/MEMS area approaching 500.

The previous seven episodes are as follows:

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Episode 1: Listening to the Voice of the Customer

Episode 2: The Role of Marketing in the Funding Process

Episode 3: Is the “Shine” off of MEMS

Episode 4: Insider Tips for MEMS/Sensor Marketers

Episode 5: Putting the “s” back into MEMS

Episode 6: Marketing Research: Past Failures and Future Opportunities

Episode 7: Integrated Marketing Communications

If you have not had a chance to see the previous episodes listed above, they can also be accessed by going to www.rgrace.com/MEMS. Also of note, I will be making a presentation on this very topic in an upcoming webinar sponsored by Questex Media.   The webinar will take place on February 13, 2018 at 2:00 p.m. Eastern at  https://pages.questexweb.com/RogerGraceAssociates-Registration-021318.html?source=rogergrace

Perhaps an early “Valentine’s Day present” for you?   I hope that you can take advantage of this opportunity and join me.  Also, you may wish to submit questions beforehand so I can make every attempt to address them during the webinar…Please send your questions to me at [email protected].

 

SENSORS/MEMS vs. IC MARKETING: SIMILARITIES AND DISSIMILARITIES

This is one of my most favorite topics from several perspectives…and especially since I have been engaged in both for many years.  In my 35 plus years as a marketing consultant professional, I have been fortunate in experiencing the providing of marketing consulting services to clients in both the IC and sensors/MEMS areas and, as such, have a keen understanding of these similarities and differences.   To begin, there is significant commonality of the basic processes to required create an IC and a MEMS.    However, the big difference is, as we all know, most ICs work in one domain …i.e. exclusively electronic…i.e. electronic signal in…electronic signal out.  

MEMS, although their name come from “Micro Electro Mechanical Systems” …in fact can work in multiple domains in addition to electro-mechanical including electro-optical, electro- acoustic, electro-chemical.  As such…one of these signals in…and an electrical signal out.   This, in my opinion, makes the application support necessary to create a sale much more complex and demanding versus that necessary of ICs.  Having personally spent several years as an application engineer from my transition from microwave and RF circuit designer to a sensor/MEMS marketer, I have seen the added value to a successful sales process provided by a top -notch applications engineering team. This point has been frequently substantiated in the many market research projects for my many clients that I have conducted who wish to better understand the “unfulfilled needs of the customer” (addressed in a previous episode) and as a viable attribute to best differentiate their product/service offering from the competition. 

The large discrepancy in the existence of standards constitutes another major difference.  The Semiconductor Equipment and Materials International (SEMI) organization has fostered the creation of over 950 standards which address the IC industry.  In stark contrast, the MEMS industry has approximately 10…. approximately two orders or magnitude less.   Earlier in my career, I have personally contributed to the attempted creation of the development of MEMS standards by SEMI by attending many meetings and making contributions to the process.   I believe that the absence or lack in adequate standards makes it much more difficult to sell and market MEMS and sensors.   Especially in the areas of definitions, testing criteria and testing conditions that can be used by potential customers to conduct “apples-to-apples” comparisons of product specifications provided by different suppliers. 

Considering this situation which poses a major detriment to successful commercialization, I have addressed the topic of MEMS standards (or lack thereof) as one of the 14 critical success factors in my annual MEMS Commercialization Report Card [1]. The results of the 2016 Report Card are provided in Fig. 1.

Fig. 1: The annual MEMS Industry Commercialization Report Card was created in 1998 to act as a formal assessment and monitoring vehicle of the 14 critical success factors for MEMS Commercialization.  Grade figures and verbatims are supplied by a diverse a
Fig. 1: The annual MEMS Industry Commercialization Report Card was created in 1998 to act as a formal assessment and monitoring vehicle of the 14 critical success factors for MEMS Commercialization.  Grade figures and verbatims are supplied by a diverse audience of approximately 100 interviewees vis-à-vis an email-based market research process. Courtesy: Roger Grace Associates
 

Additionally, the lack of significant roadmap development in the MEMS area versus the various IC industry roadmaps is also a problem in the marketing of MEMS.  The Report Card has also addressed this issue [2] [3]. The lack of a detailed and credible roadmap does not provide the adequate support to product planners necessary for them to create their next generation(s) of offerings.

Finally, the number of internationally recognized market research organizations that track the IC market e.g. Gartner Research far exceeds the number that tracks the MEMS market.   As a result, sensor and MEMS marketers have less of a choice in accessing important information.  And as we have been told in Episode 7 by Steve Walsh and in Episode 6 by Janusz Bryzek, accurately determining market values for emerging markets poses serious challenges.

It is also of interest to know how many of the individuals who have contributed to these previous episodes and who have specifically contributed to this Episode 8 came from the IC industry earlier in their career.   I believe in the early days of sensors/MEMS, the goal was to sell components…. like the IC industry.   However, as we have address in Episode 5, we need to put the “S” back into MEMS and sell value added solutions…and not components.

Please find following the comments provided by my interviewees on the topic.

Brain Kinkade (Positive Impact) said…” The biggest difference is that MEMS/Sensor devices can require more application support.  This could be from interface to the real world, analog circuit, digitization, compensation, and even packaging or environmental effects on results.  But the sales process is similar and the first objective is a Design Win. 

To get to a Design Win quickly, I recommend some radical modifications to some typical IC sales steps that should be embraced by sensor/MEMS marketers:

  • There is no such thing as FREE Samples: To qualify for free samples, have OEMs provide a little information (i.e. application, testing/evaluation plan, potential production volume) and promise to provide their test results back.  They might not know how to evaluate your sensor performance correctly.  This effort will help you to help them.
  • Don’t Just Make a Reference Design: Do your customer’s job; make a solution they could rebrand.  You’ll find out a lot trying to design a full solution with your MEMS/sensor device.  Worst case, your customer has a concept prototype.  Best case, you are selling millions of units quickly.
  • Give Away information: You already know all the things required to make your MEMS/sensor work right.  Document this information and freely provide it to potential OEMs. Don’t make them sign an NDA and spend hours in meetings with your engineers.

Paul Pickering (Micralyne) said…” As the MEMS/Sensor industry matures, I do see a convergence with the Global Semiconductor and IC markets. Sensors and ICs are entities that share a common heritage and have a co-dependency in most applications. It is inevitable that they will eventually be indistinguishable in the marketplace and fall under a generic label of "electronic components". But as of today, sensors are tracking a good 30 years behind the IC market and they will not catch up soon. I believe there is much to be gained from modeling certain market approaches after the semiconductor industry.   In my view, the foremost challenge in the MEMS/Sensor industry is the tenancy to develop a single sensor for specific application. We all know that creating a new sensor from scratch for each application will limit growth and prevent the industry from moving beyond niche applications. This is very like the problem that the Micro-controller market faced in the early 1980's. At that time, the market had numerous companies creating small 4bit and 8bit controllers for specific applications. Microchip saw the opportunity to create families of micro-controllers that were easily configurable. This approach leads to a revolution in the industry that resulted in the high volume, low cost micro-controllers that found in everything from toys to medical equipment. Today, we can see some similar approaches emerging at sensor companies. From a marketing perspective, the most successful sensor companies are providing sensor platforms that are easily configurable and can address an array of applications. To expand on this thought, I would add that the configurable components of the platform are the drivers, software and the hardware. In this case, the platform might have a dozen different sensor devices for various applications that plug into a common IC system that leverages a similar code base and offers additional ways to fine tune and configure the sensor application. This approach tends to complicate the product definition for the marketing team, but it should payback in terms of widening the available market and scaling the initial investment across numerous industries”.

Janusz Bryzek (eXo Imaging) said…” the major differences in working with the IC market vs. the MEMS/sensors market …especially from a marketing perspective are the following:

  • From a Traditional IC market perspective:
  • Standard processes following Moore’s law, with 10 nm nodes in production.
  • Known process roadmaps.
  • Excellent device modeling tools.
  • Device cost defined by process node (wafer cost) and die size.
  • Standard packaging.
  • Standard test infrastructure.
  • Excellent marketing reports.
  • Mostly standard products.
  • Market `$380B in 2017, growing 12%/yr. (www.statista.com) before printed IC disruption.

From a MEMs market perspective:

  • No process standardization for mature products, emerging custom processes for new products, one product-one process.
  • No process roadmaps.
  • Limited device modeling tools, requiring prototyping to upgrade models.
  • Wafer cost typically much higher than IC wafer cost.
  • Custom packaging, one product-one package
  • Custom test infrastructure.
  • Reasonable marketing reports for existing products, poor for emerging products.
  • Mostly custom products
  • Market value for MEMS in 2017 is approximately 16 B (US) with a growth rate of approximately 14%.”

Mark Laich (Laich Advisory Group) said…” The sales and support infrastructure and methodologies needed to be successful in the IC market vs. the MEMS market have many aspects in common.  Both require a sales organization with a high level of technical acumen, support for reference designs via multiple industry partnerships, local sales presence (either direct or indirect), as well as distribution to support a wide geographical customer base. 

In my experience, one of the major differences between these two industries is the time to market issue.  The maturity of IC simulation tools enables much shorter design cycles compared to the MEMS industry.  And this is exacerbated by the lack of standardization – the MEMS industry still needs to make considerable progress to achieve the efficient design and development model of the IC industry, which is enabled by widely available, production-worthy, licensable intellectual property.  These issues put pressure on the MEMS sales organization to have strong relationships with the RIGHT customers and partners so that they can understand the design requirements in the coming two years.    Another important difference between these two industries has been that the MEMS industry has failed to capitalize on the intellectual property which it puts into reference designs.  MEMS companies often give this design knowledge away to close a design win with an important customer, which has led to the commoditization of many MEMS products”.

David Mount (Ulvac) said…” There are several reasons why smaller (SPTS, EVG Group, etc.), rather than the larger (AMAT, LAM, Nikon, etc.) capital equipment manufacturers have a larger share of the MEMS equipment market. The MEMS market is much smaller than Semi, in both revenue volume and more importantly in wafer starts. The larger equipment companies are geared up for volume manufacturing driven by the enormous number of wafer-starts required by the large semiconductor manufacturers.  Using Intel as an example, they operate 8-major manufacturing lines for their logic/microprocessor device products. They tend to need new equipment after about two technology nodes. As a reference, they have about 40- RIE etchers per manufacturing line. They also employ a copy exactly strategy for each manufacturing line, meaning that when they need new etching equipment there are potentially 320 etchers that will be required. At a selling price of about $3.0M per system is just about $1B in a potential order for some equipment company (just for etchers). Consider that Samsung, Micron, TSMC, GF, UMC, ST Microelectronics, etc., have similar product volume requirements. Only large, well-capitalized equipment companies can participate in this market. The smaller equipment manufacturers can play in the well in the MEMS market, where wafer-start volumes are considerably lower. The big equipment manufacturers have little interest in a market (MEMS) that has low volume potential, but requires a large/long process development cycle (that MEMS devices usually do). The smaller equipment companies can thrive in the MEMS market environment with little or no competition from the big players. Regarding the adage: Bigs sell to big and smalls sell to smalls”.

Maryann Maher (SoftMEMS) said…” At first glance, it seems reasonable that the marketing of MEMS components would follow a similar evolution as IC components. Indeed, some MEMS components such as inertial sensors and pressure sensors are marketed with data sheets, and marketed through distribution networks as are IC components or marketed through the same channels as are macro scale sensors. However, due to the lack of standards, reference designs, and similar descriptions (such as SPICE models)-MEMS components typically cannot be marketed in the same manner as IC components. As a result, the marketing and sales cycles are more complex and require longer engagement times. Another complicating factor is that the method for making the MEMS may affect its performance, reliability and failure mechanisms. For example, capacitive microphones will perform differently than piezo-electric ones and an optical gyro will be very different than a mechanical gyro. In addition, combo-sensors may combine several different sensors leading to additional market complexities. Finally, some MEMS sensors are sold into emerging or developing markets where the approaches used to market IC devices just cannot be used and a custom marketing approach is warranted”.

 

SUMMARY/CONCLUSIONS

In the previous seven episodes of this tutorial, I have attempted to address many of the topics (from a marketing perspective) which I believe have deterred the sensors/MEMS industry to achieve its full commercialization potential.   Marketing plays critical roles in the sensors/MEMS technology commercialization process model.  In the front end, it provides assistance in product definition, competitive analysis and internal competencies assessment.   In the back end, it provides the vehicles to effectively position, brand and promote the product (see figure 2). 

 
Fig. 2: The MEMS commercialization process relies heavily on market research inputs...both in the “front end” with the customers’ unfulfilled needs analysis, internal competency analysis and competitive analysis and in the “back end” with determination of
Fig. 2: The MEMS commercialization process relies heavily on market research inputs...both in the “front end” with the customers’ unfulfilled needs analysis, internal competency analysis and competitive analysis and in the “back end” with determination of the optimization of the channels of distribution, promotion and marketing communications strategy development (MARCOM). Courtesy: Roger Grace Associates

My annual MEMS Industry Commercialization Report Card, which made its first appearance in 1998, attempted to provide some possible rationale as to the inequity of the level of success of the MEMS industry versus that of the IC industry, both of which started in the 1950’s.  However, the IC industry annual sales for 2017 is expected to be approximately $380 B (US) and the sales of the MEMS industry to be approximately $16 B (US).  This constitutes an alarming 22.4:1 ratio.   Out of the 14 topics addressed in the Report Card, Marketing (see figure 3) and Market Research (see figure 4) and were critical elements which I believe have been comprehensively addressed in this and in previous episodes.

[FIGURE 3] Fig. 3: The MEMS Industry Commercialization Report Card has tracked the performance of “Marketing” since its inception in 1998.  The 2016 grade was B which was an improvement from B- in 2015 and 2014. Courtesy, Roger Grace Associates
Fig. 3: The MEMS Industry Commercialization Report Card has tracked the performance of “Marketing” since its inception in 1998.  The 2016 grade was B which was an improvement from B- in 2015 and 2014. Courtesy, Roger Grace Associates
Fig. 4: The MEMS Industry Commercialization Report Card has tracked the performance of “Market Research” since its inception in 1998.   The 2016 grade was C+ with no improvement from the previous year. Courtesy: Roger Grace Associates
Fig. 4: The MEMS Industry Commercialization Report Card has tracked the performance of “Market Research” since its inception in 1998. The 2016 grade was C+ with no improvement from the previous year. Courtesy: Roger Grace Associates

 

The following are what I deem to be the major “take-aways” of the tutorial series:

 

Listening to the Voice of the Customer (Episode 1)

Sensor/MEMS suppliers must listen to the voice of the customer in developing new products /services and not adopt the…” build it and they shall come” attitude.  This concept could possibly be counter to the mentality of the design team. This can be accomplished by undertaking a rigorous market research program…either internally or vis-à-vis the use of a competent market research firm such as Roger Grace Associates who is familiar with the technology and applications. As previously quoted by Tom Peters, from his book …In Search of Excellence in Episode 6…” the best market research is done with real products with real customers”.   My experience has unequivocally shown that this can be best accomplished by interviews on the phone or more preferably in-person at technical conferences.

 

The Role of Marketing in the Funding Process (Episode 2)

The ability to successfully promote the sensors/MEMS organization to the investing audiences is a key element in creating interest and excitement in the market and moreover increasing expected future valuation from investors.

 

Is the “Shine” off MEMS (Episode 3)

As MEMS mature, enlightened engineers do not look at them as the end- all and be- all of sensors.   MEMS, or for that matter, any other technology must be addressed as a valuable tool in the design engineers’ toolbox and compared with other technologies in its ultimate selection in providing the optimum functionality or functionalities to a solution to an application opportunity.

 

Insider Tips for MEMS/Sensor Marketers (Episode 4)    

I believe that people and organizations in the MEMS/sensors area have historically been technology push versus application pull believers…and the good news is that this is changing at an accelerated rate.   It is all about customer benefits derived from product features….and how best to help the customer make the very best product for the lowest cost…and to differentiate your product/service from your competitors’.  Enlightened marketers will use the tools mentioned in Episode 7…” Integrated Marketing Communications” to accomplish this objective.  Additionally, I believe that the ever-increasing popularity and use of social media from a LinkedIn, Twitter, Facebook and other social network vehicles is a sound one that needs to be exploited.  Also, the use of webinars is gaining popularity.   The name of the game is to educate the customer…an educated customer is a good customer…and I believe that webinars and white papers do this best. The opinions of the interviewees correlated highly with mine.

 

Putting the “s” back into MEMS (Episode 5)  

Sensors/MEMS are, by necessity, finally becoming systems i.e. microelectromechanical SYSTEMS i.e. MEMS.  The basic sensor/MEMS element/function must be supplemented by signal conditioning (frequently accomplished by an ASDIC) as well as with additional functionalities including power, power management, security, communications.  In addition, it is becoming most critical for the system functionalities to be judiciously interconnected and packaged in highly robust and cost-conscious packaging (see figure 5).

Fig. 5: MEMS Sensors-Based System Solutions are comprised of several of the following functions: sensor, signal conditioning, power/power management, communications and package/interconnects and are based on strong system engineering principles. Courtesy:
Fig. 5: MEMS Sensors-Based System Solutions are comprised of several of the following functions: sensor, signal conditioning, power/power management, communications and package/interconnects and are based on strong system engineering principles. Courtesy: Roger Grace Associates

 

Marketing Research: Past Failures and Future Opportunities (Episode 6)

Market research was a highly contested topic.   The consensus of opinion was that existing market research on sensors/MEMS simply is an extrapolation of previous data and cannot successfully address the nuances associated with disruptive markets where many of the applications are major opportunities for sensors/MEMS

 

Integrated Marketing Communications (Episode 7)

In my opinion, the development and execution of a well-planned and funded integrated marketing communications program is a highly leveraged and underutilized tool in the marketers’ tool kit.  It is to be considered a “secret weapon” since many organizations tend not to embrace it.   I have personally helped plan and orchestrate many successful product launches and several company acquisitions with major success and enhanced value vis-s-a-vis the use of this tool.  I have especially found public relations and trade shows to provide the highest ROI of all the tools available.  Trade shows especially provide the opportunity to meet with potential customers and additionally…make presentations, launch new products and meet with influential editors and plan feature stories promoting the company’s technology and applications of its products.  Trade shows also offer a highly leveraged approach to conduct market research.

It certainly has been an honor and a distinct pleasure to have the opportunity to share my, and my esteemed colleagues’, thoughts and opinions on sensors/MEMS marketing with you.  My sincere thanks go to my colleagues at Questex Media, Ms. Charlene Soucy, Marketing Director for her continuing valuable support throughout the development process of this tutorial project and to Mr. Mat Dirjish, executive editor of Sensors Online Weekly, for his valuable assistance in encouraging the creation of and the publishing of these episodes.

In this eighth episode tutorial series, I have attempted to inform, educate and indulge the readership as to the significant opportunities that exist with the embracing of marketing as it relates to the sensors/MEMS market.  I would like to think that this tutorial series will facilitate a positive transformative effect on sensors/MEMS executives and practitioners on the topic and practice of marketing… moving from an oxymoron to an opportunity.   Carpe diem!!!!

ACKNOWLEDGEMENTS

The author would like to sincerely acknowledge the contributions of the following individuals who were interviewed for these episodes and who provided valuable and helpful information to their creation. Thank you all so very much. (The names provided are in alphabetical order by last name.)

  • Sandeep Akkaraju, President /eXo Imaging (Formerly: CMO Jyve)
  • Robert Andosca, Ph.D. CEO / Inviza (Formerly: CEO microGen)
  • Matt Apanius, President and Managing Director/ Smart Microsystems
  • Wilfried Bair, Senior Engineering Manager/NextFlex
  • David Mount, Business Development Manager/ULVAC
  • Janusz Bryzek, Ph.D., CEO/eXo Imaging (Formerly: CEO Jyve)
  • Juan Figueroa, Ph.D. CEO/Abenaki Connect (Formerly: SBIR Program Manager/National Science Foundation)
  • Alyson Hartzell, Managing Engineer/Veryst   
  • Brian Kinkade, Founder/Positive Impact (Formerly: Marketing and Sales VP, Spec Sensors)
  • Jim Knutti, Ph.D., CEO/Acuity Inc.
  • Mark Laich, CEO/Laich Advisory Group, (Formerly: VP Sales and Marketing/ MEMSIC and V.P. Business Development /Qualtre)
  • Keith Myers, V.P. Marketing/TE Connectivity
  • Tom Nguyen, CEO/Dun An Sensing
  • Rob O’Rielly, Consulting Engineer/Analog Devices
  • Rick Russell, President/Merit Medical
  • Steve Ohr, Semiconductor Industry Analyst and Reporter (Formerly: Semiconductor and Sensors Analyst/Gartner)
  • Kurt Petersen, Ph.D., Member/Silicon Valley Band of Angels (Formerly: CEO/SiTime)
  • Paul Pickering, V.P. Business Development/Micralyne
  • Swaminathan (Swami) Rajaraman…, Ph.D., Assistant Professor/University of Central Florida
  • Steve Walsh, Ph.D., Professor/University of New Mexico
  • Paul Werbaneth, Director of Marketing/Intervac
  • Steve Whalley, Whalley Consulting (Formerly: MEMS and Sensors Industry Group/Chief Strategy Officer)
  • Gary Winzeler, V.P. Sales and Marketing/Dun An Sensing

REFERENCES EPISODE 8

[1] R. Grace; Barriers to the Successful Commercialization of MEMS: The 2014 MEMS Industry Commercialization Report Card; Commercial Micromanufacturing International; Vol. 8, No. 5; September/October 2015

[2] R. Grace et al., The Role of Standards in MEMS Commercialization, Chip Scale Review, March/April 2015, pp. 1-5

[3] R. Grace, S. Walsh; Technology Roadmaps: A Critical Element in the Successful Commercialization of MEMS; Commercial Micromachining International; Vol. 8, No. 4; July/August 2015; pp. 38-42

[4] Micro and Nano Technology Commercialization Education Foundation, MEMS Commercialization Roadmap, 1990, www.mancef.org

[5] R. Grace, Thinking Outside the Chip: MEMS-based systems solutions, Small Times, Nov.-Dec. 2008, pp.25-29, www.rgrace.com

About the author

Roger H. Grace is president of Roger Grace Associates (RGA), a Naples Florida-based marketing consulting firm specializing in high technology, which he founded in 1982. His background includes over 40 years in analog circuit design engineering, manufacturing engineering, application engineering, project management, product marketing, and technology consulting. He can be reached at 239-596-8738, [email protected].