2002 Tough, But MEMS Still a Solid Business Opportunity Reports In-Stat/MDR.

Business Editors/High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Aug. 18, 2003

Although a number of significant milestones were achieved in 2002, this past year was one of the toughest, to date, for those in the MEMS (MicroElectroMechanical Systems) industry, reports In-Stat/MDR (http://www.instat.com). The high-tech market research firm reports that year-over-year revenues grew just 4.4 percent -- from $3.8 billion in 2001 to $3.9 billion in 2002 -- even though unit shipments increased 47.6 percent.

However, according to Marlene Bourne, a senior analyst with In-Stat/MDR, "A number of governments, who believe that this technology of the future cannot be ignored, are well on their way to creating the infrastructure necessary to ensure that they won't be left behind. Future regional competitiveness may very well be a direct result of the significant level of spending that is taking place right now in China, India, Mexico, Taiwan, and other countries."

Despite the mixed news, MEMS remain a solid business opportunity, for both customers and suppliers alike. As such, revenues are forecast to increase at a CAGR of 15.9 percent to $8.3 billion in 2007, with unit shipments growing at a CAGR of 26.1 percent, from 1.0 billion units in 2002 to 3.3 billion units in 2007.

In-Stat/MDR also reports that:

-- VC funding in this market for the first six months of 2003 was

just $52.2 million, on track to be the lowest level since

1998.

-- Nearly two dozen companies have gone out of business,

including at least four fabs. To add to the strain already

being felt in the fab sector, only 11 percent of companies

supplying MEMS devices are currently outsourcing their

fabrication needs.

-- Over the course of the next five years, there will be some

fairly radical shifts in market shares. RF MEMS will see the

biggest gains (in terms of unit shipments), with optical MEMS

gaining the most, on a revenue basis.

-- As for end-use markets, Industrial will gain the most, from a

unit shipment standpoint, while Communications will see their

share of the market jump, based on revenues.

The report, "Got MEMS? 2003 Industry Overview and Forecast" (#IN030601EA), looks at a variety of trends and other parameters indicating success and change in the MEMS industry. Topics include: milestones achieved, mergers and acquisitions, who's out of business, venture capital funding (and who's providing the money), fab activity (by location and process capability), and growing regional activity in Asia-Pacific and Latin America. This report also looks at the devices being commercialized, companies supplying them (including who fabs in-house or outsources), and market focus. Forecasts for MEMS devices and markets are provided through 2007. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/cat-esa.htm or contact Rick Vogelei at 480-609-4533; [e-mail]. The report price is $3,495.

For a limited time, In-Stat/MDR is offering the opportunity to purchase both this report and a pass to the MEMS Executive Forum for a discounted price of $3,990. That's a savings of $600! The MEMS Executive Forum provides unprecedented access to many of the major MEMS players mentioned in the report, allowing an opportunity to hear first hand about the evolving business of MEMS and the value proposition MEMS offers.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals, and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With more than 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.