SCOTTSDALE, Ariz. -- Despite the recent market downturn, MEMS (Micro-Electro-Mechanical Systems) technology remains an oasis within the telecommunications industry, according to Cahners In-Stat Group (http://www.instat.com). MEMS will play a key role in providing the advanced components needed to get the most out of telecom carriers' fiber optic cable investments. As a result, sales of MEMS for use in optical networking will rise from $67 million in 2001 to $2.3 billion in 2005. "Although we've seen layoffs, funding mishaps, and scaled- back business plans among some MEMS manufacturers targeting the optical networking segment, MEMS as a whole has not been impacted as significantly as the greater telecom market," says Marlene Bourne, a Senior Analyst with In- Stat. In fact, VCs (venture capitalists) are still providing significant levels of equity to MEMS firms, customers continue to be enthusiastic in their evaluations, and more companies are moving toward production ramp-up. "More significantly, new applications for MEMS in optical networking have come to the fore," says Bourne. MEMS-based variable optical attenuators, tunable filters, and tunable lasers have expanded the market beyond switches, providing additional revenue streams within the telecom sector. Market movement is expected to begin in the fourth quarter of 2001, with increased momentum in early 2002. Cahners In-Stat Group