China's MEMS sales will reach 1.6 billion US dollars in 2011

According to a Chinese research report from IHS iSuppli, the Chinese government’s actions to curb economic growth and control inflation will lead to a slowdown in China’s MEMS purchase activity in 2011.

China's MEMS consumption in 2010 increased by 33%, and it is expected that the growth rate in 2011 will drop to 10%. Despite the slowdown, the market still maintains a healthy expansion rate. It is expected that China's MEMS sales will reach 1.6 billion U.S. dollars in 2011, which is higher than the 1.5 billion U.S. dollars in 2010. By 2015, China's MEMS sales will reach US$2.6 billion, and the compound annual growth rate for 2010-2015 will be 12.1%.

Indeed, due to the deterioration of the global macroeconomic situation, the Chinese government has recently taken a cautious stance on credit, and this year the Chinese MEMS market will not reproduce the strong growth that it did in 2010. In 2010, China's MEMS sales increased significantly, resulting from the significant expansion of production capacity using MEMS sensors, including mobile phones, automotive electronics and consumer electronics. The Chinese government’s fiscal stimulus measures have also contributed to the growth of manufacturing activities. Banks have loosened loan control and helped companies expand their production capacity.

However, this year the Chinese government has become more cautious in its economic policy. In view of the declining global economic growth rate and rising inflation, China has increased its lending conditions, leading banks to reduce their lending to companies in order to prevent them from increasing their capital expenditures to expand production capacity.

In 2011 and the next few years, there will be three trends that will affect China's MEMS sales growth.

First, MEMS products will provide consumers with new experiences by providing eager features and innovative features, such as the provision of pico projectors in home appliances and mobile phones.

Second, as more suppliers join the market, and MEMS technology and production processes improve, production costs will drop rapidly, just as accelerometers have performed in the past two years. This will drive market growth.

Finally, the increase in demand for hot products such as smart phones and tablets will promote the expansion of the MEMS market.

In the next few years, the fastest-growing MEMS sector in the Chinese market will be microphones, accelerometers, and gyroscopes for the mobile and consumer markets. IHS estimates that the MEMS sales in this market will reach US$1.3 billion in 2015 and the compound annual growth rate for 2011-2015 will be 21%.

The second fastest growing areas will be the automotive and industrial MEMS market. The compound annual growth rate for 2011-2015 is expected to be 14% and 12%, respectively.