MEMS Market Heats Up
The report says that MEMS technology is already a $3 billion market, thanks to the use of MEMS for variety of non-networking applications, such as automobile air bags, blood pressure monitors, and home appliances. But the application of MEMS in optical networking, where tiny mirrors are used to switch light, is expected to increase as well.
MEMS-based photonic switches will grow more than 400 percent and will account for $1 billion of the overall MEMS market by 2004, the report says. This will happen despite innovations in other techniques for use in optical switching, such as electroholography (see Trellis Gets $25M For Holographic Switch) and liquid-crystal switch components (see Corning's Mixed Message).
"There's going to be a real push in MEMS for photonic switches, because it's more developed than other technologies at this point," says Marlene Bourne, senior analyst at Cahners and author of "MEMS and Optical Networks, Switching the Light Fantastic."
Last year, she points out, just three or four companies accounted for the entire market in photonic switch MEMS. Now, she says, there are more than two dozen players. Some companies, such as Analog Devices Inc. (NYSE: ADI), started out in the market for other kinds of MEMS and are now playing in optical networking.
Others are paying to get into the market. During the first six months of this year, Bourne says, vendors spent nearly $5 billion to acquire MEMS for photonic switching. The list includes heavyweights Corning Inc. (NYSE: GLW) and JDS Uniphase Inc. (Nasdaq: JDSU) (see Big Vendors Acquire MEMS Makers), as well as Tellium Inc., which just bought Astarte Fiber Networks (see Tellium's Pure Optical Play); Nortel Networks Corp. (NYSE/Toronto: NT), which spent $3.5 billion for Xros Inc. earlier this year (see Nortel Buys a Monster Crossconnect and Nortel: Xros Isn't in Trouble); and Calient Networks, which bought Kionix earlier this month (see Calient Secures MEMS Supplies).
But Bourne says the real challenge lies ahead. Companies must successfully deploy MEMS in commercially viable optical switches. And that's not going to be an easy task. To start with, MEMS switches are still just coming out of the lab. To date, just a few vendors, such as Tellium and startup OMM Inc. (see OMM Files for an IPO) have announced customers. And even so, said customers are still tinkering with the gear in their own labs.
As switches become available, vendors will need to juggle design tradeoffs to create products. Power consumption, switch size, and port density are key issues, ones that vendors will need to prove they can overcome in order to succeed.
There's apt to be plenty of fallout in the process. "The tale will be told next year," says Bourne. Given the promise of MEMS in the optical networking arena, plus the risks and complexities involved, the market will show strong but steady growth. "Growth will occur at a relatively modest pace," says Bourne.
-- Mary Jander, senior editor, Light Reading http://www.lightreading.com