October © 2015

From Technologies to Markets

Semicon Europe

Wearable :

An early Internet of Things

application for MEMS !

Claire TROADEC

2

MEMS &

Sensors

LED

Compound

Semi.

Imaging Photonics

MedTech

Manufacturing

Advanced

PackagingPV

Power

Electronics

FIELDS OF EXPERTISE

Yole Développement’s 30 analysts operate in the following areas

@2015 | www.yole.fr | Semicon Europe

4 BUSINESS MODELS:

o Consulting and Analysis• Market data & research, marketing analysis• Technology analysis• Strategy consulting• Reverse engineering & costing• Patent analysis

www.yole.fr

o Reports• Market & Technology reports• Patent Investigation and patent infringement risk analysis• Teardowns & Reverse Costing Analysis• Cost Simulation Tool

www.i-Micronews.com/reports

o Financial services• M&A (buying and selling)• Due diligence• Fundraising • Maturation of companies• IP portfolio management & optimization

www.yolefinance.com

o Media• i-Micronews.com website• @Micronews e-newsletter• Technology magazines• Communication & webcast services• Events

www.i-Micronews.com

© 2015

Overview of the MEMS & Sensors market

@2015 | www.yole.fr | Semicon Europe

4

WEARABLE TECHNOLOGY

Mimicking the five human senses

The first wearable

generation reproduces many of the

human senses

@2015 | www.yole.fr | Semicon Europe

Gas sensor

Processing

Inertial system

Imaging

Microphone

5

MEMS AND SENSORS : THE 5 SENSES…

MEMS devices and other

sensors bring increased

functionality…

@2015 | www.yole.fr | Semicon Europe

Smell

Hearing Taste

Sight

Touch

microphones

Gas sensors

Force & touch sensors

Humidity sensors

Electronic tongue

Electronic nose

© Yole Developpement – Oct 2015

microbolometersCMOS Image

sensor

6

MEMS AND SENSORS : THE 5 SENSES AND MANY MORE

…and are aiming for

greater external

interaction…

@2015 | www.yole.fr | Semicon Europe

Smell

Hearing Taste

Sight

Touch

microphones

microbolometers

Pressure

Gas sensors

Pressure sensorsFluids

BiochipsForce & touch sensors

Humidity sensors

Balance

Inertial systems

RF communicationOscillators, tuners & filters

SpeechMicrospeakers

CMOS Image

sensor

© Yole Developpement – Oct 2015

Electronic tongue

Electronic nose

7

MEMS & ACTUATORS

…to enable an evolution

towards actuators that can respond

to sensed and received

information.

@2015 | www.yole.fr | Semicon Europe

Focus

RF communicationSwitches

Autofocus

Fluids

Biochips Micropumps

Sight

micromirrors

SpeechMicrospeakers

microdisplays

© Yole Developpement – Oct 2015

8

MEMS & SENSORS ROADMAP

From More than Moore towards Beyond Law

MEMS & Sensors

enable key functionalities

…

Current battleground

of the industry

1980 2010 2030

Industry competition

Moore

Industry competition

More than MooreIndustry Competition

Beyond Moore

LaptopPersonal Computers

Smartphones

Autonomous

vehicles

Robotic

Servants

Quantified

self

Drones

Acceleration

SensingInteraction age

ProcessingInformation age

ActuatingTransformation age

Tablets

Smart

homes

2040

@2015 | www.yole.fr | Semicon Europe

Telekinesis

TODAY

9©2015 | www.yole.fr | Semicon Europe

2000–2020 MEMS MARKET (M UNITS)

20% CAGR over 2004–2020 (including glass/polymer-based microfluidics chips)

In 2030, a MEMS ASP at

$0.3?

(Already a reality for

accelerometers)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2000–2020 MEMS Market (M units)Source Yole Développement

© Yole Developpement - July 2015

The consumer wave is starting

Simple MEMS market rule: 2016, $16B, 16Bunits, $1 ASP

10©2015 | www.yole.fr | Semicon Europe

0

5,000

10,000

15,000

20,000

25,000

30,000

2014 2015 2016 2017 2018 2019 2020 CAGR 2015-20

Sh

ipm

en

ts (

M u

nit

s)

MEMS market forecast shipments (in M units)

©2015 Yole Développement - April 2015

2015–2020 MEMS MARKETS (M UNITS)MEMS shipments will almost triple from 2014 to 2020 (we exclude glass/polymer-based microfluidics chips)

17% CAGR over 2015–2020

Inkjet heads

Pressure sensors

Acceleros

Microphones

Gyros

Digital Compass

Inertial Combos

Projection Systems

Microdispensers(microfluidics)

RF MEMS

Oscillators

Others (microstructures, micro tips, flow meter,…)

11©2015 | www.yole.fr | Semicon Europe

2000–2020 MEMS ASP EVOLUTION

By 2020, MEMS ASP will be < $1

In 20 years, the ASP has been divided

by 5!

$0,0

$0,5

$1,0

$1,5

$2,0

$2,5

$3,0

$3,5

$4,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2000–2020 MEMS ASP decreaseSource Yole Développement

© Yole Developpement - July 2015

12

2015–2020 MEMS MARKETS (BY APPLICATION)

Consumer is still the main driver

The MEMS market willalmost double in value from2014 to 2020

Consumer (incl. wearable) is more than60%

@2015 | www.yole.fr | Semicon Europe

© Yole Developpement - July 2015

Aeronautics

Automotive

Defense

Consumer

Industrial

Medical

Telecom

13

DRIVERS FOR MOBILE CARE AND WEARABLE APPLICATIONS

Two markets are coming

together, and are already

mature enough to

perform well

@2015 | www.yole.fr | Semicon Europe

Wearable

and Mobile

Care

Point of Care

Hospital Care

Everywhere Care

Smartphone &

Tablet revolution

TimeLevel of integration

Feature

Phones

“Mobile”

trend

“Care”

trend

14

CHALLENGES IN THE WEARABLE MARKET

To be successful,

investments are needed in technology but also in

marketing, but above all, the

use case is the enabler

@2015 | www.yole.fr | Semicon Europe

MarketingTechnical

Performance/Accuracy Invisible/Small system Personal/Customizable

objects

Added-value

perceivedissues

4

Different challenges

3

Use caseRelevant application bringing

added value to the customer

Enabler Specific

to the

consumer

market

15

CHALLENGES FOR THE WEARABLE MARKET

Wearables have specific technical requirements

Some requirements are relevant to sensors

@2015 | www.yole.fr | Semicon Europe

Ultra Low Power

Low power consumption

Accuracy

Reliable data

Low noise

4Requirements

Useful insights

Multiple parameters

Non-invasive sensing

Sensors’

PackagingSmall size, almost invisible

Reliable and low cost

No specific challenge ! No technological breakthrough

16

MARKET DRIVEN BY 4 TYPE OF SYSTEMS

Four systems – but one will dominate the

others in coming years

@2015 | www.yole.fr | Semicon Europe

In this report, we cover 4 categories of wearable systems involved in the 3 markets described previously, consumer, healthcare and industry/defense markets. These 4 systems have been forecasted for the next 5 years, including sensors that are integrated.

Body-wornHead-worn

4Main categories

Wrist-worn Smart clothing

17

SUMMARY

A 285M unit per year market by 2020

Wrist-worn devices will

represent 86% of the

wearable market by

2020.

@2015 | www.yole.fr | Semicon Europe

We estimate that the wearable sales hit 83M units this year, with 88% of the sales originating from wrist-worn devices.

These wrist-worn devices will represent 86% of the wearable market by 2020, a volume of 244M units. Other devices will add 40 M units.

We don’t expect high volumes of smart clothing to be sold until after 2017.

18

SENSORS MARKET FOR WEARABLE

Summary

Successful businesses in wearables:

inertial, pressure,

biosensor and microphone

market

@2015 | www.yole.fr | Semicon Europe

Sensors for wearables could reach a total number of 1.2Bunits by 2020.

19

COMPONENTS OF WEARABLES

Some blocks are ready, but use case will

drive the organization of the upper

layers…

@2015 | www.yole.fr | Semicon Europe

Materials/Algorithms

Interfaces

Connectivity

Battery

Sensors / Actuators Inertial

Bluetooth

Button

Cell

Biosensors Microphone

Wi-Fi GPS

Battery

Li-IonFlexible

Actuators

(Piezo,…)Environmental

Energy

Harvesting

Use case will lead

the organization

of connectivity

(blocks (interface

and algorithms)

have to be

adapted to the

use case). For

now, it’s not the

case, wearable

are thus limited

Lower blocks are ready to be implemented, only upper layers are still under construction

20

WEARABLE: AN EARLY ‘INTERNET OF THINGS’ APPLICATION

The human is a connected object

Wearable technologies are expected to provide

strong value at all industry

levels

@2015 | www.yole.fr | Semicon Europe

Sensing Collect and transmit (& store) Analysis and Services

Systems

Measurements

Applications

Video conference, Email, SMS, Mail, Phone

Feedback

Biometrics

Secured

Data

…

…

…

21

APPLE WATCH TEARDOWN

Wearable systems are very close to

the smartphones

…

@2015 | www.yole.fr | Semicon EuropeSource: ABI Research/Chipworks Pictures courtesy of Apple Inc.

Elpida

512Mb SRAM Memory

F440AAC

CPU Apple APL0778

ADI Touch Controller

AD7149

STM IMU

LSM6DS3

Broadcom

Wi-Fi/Bluetooth/NFC/FM BCM43342 AMS

NFC Signal Booster

AS3923

Toshiba/SanDisk

8Gb Flash Memory

NXP

Interface system

IDT

Wireless charger

P9022

NXP

NFC controller

Dialog

Power Management Unit

D2238A

STM µC

STM32

Skyworks

Wi-Fi LNA + switch and PA

Maxim Integrated

Audio Codec

Audio Amp

22

MEMS FOR WEARABLE SYSTEMS

MEMS are ideal

candidates for wearables

@2015 | www.yole.fr | Semicon Europe

MEMS had great advantages for wearable:

- High performance- Small form factor- Low power- Low cost

Leading to :

• Enhanced learning through instant sensor feedback

• Better understanding of humans in sport

• Based on accurate, actionable data, not perception or trial and error

• Improved safety and performance

• Databases lead to better product engineering

De-coupling motion and physiological responses can improve measurements related to the human experience

• Both consumer and clinical applications can benefit from more comprehensive data

• Consumerization of MEMS sensors have enabled new products that have begun to define a path:- Miniaturization with cost reduction

- Use of branding and software to overcome performance tradeoffs

- Growth in health care products

23

CONCLUSION

The wearable market has

already started to

grow and has to be

accepted by non-

technologists…

@2015 | www.yole.fr | Semicon Europe

• Drivers for wearables in the consumer market: self-monitoring and “quantified-self”

• In wearables, MEMS and sensors will address, in a first step, mainly high volume markets, such as the consumer segment.

• There’re not specific challenges for wearables, it’s a continuum from smartphones market. No breakthrough expected, the market will follow technology trends similar to smartphones.

• There are four key technical challenges that must be overcome to see an adoption similar to smartphones: Size, Power Consumption, Connectivity, Accuracy (SPCA).

• Who will win in the wearable market? Likely several players, with the ones who also serve the smartphone market, have their own ecosystems and the strongest marketing budgets having key competitive advantages. That’s why we place a bet on companies like Xiaomi, Google, Apple, Samsung…

• “Find a use case” is the golden rule to succeed in wearable.

24

CONCLUSION

Wearable market could

be worth $88B by 2020!

@2015 | www.yole.fr | Semicon Europe

Sensors Units

2.9B

Systems Units

600M

Market Value

$128B

Sensors Units

1.2B

Systems Units

284M

Market Value

$88B

Sensors Units

213M

Systems Units

83M

Market Value

$23B

2015 2020 2024Year Year Year