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HOWARD RUPPRECHT, CEO VTT MEMSFAB LTD

IoT Sensors- why your R&D Partner could also be your ideal manufacturing partner

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‘A trillion sensors, a million applications and a fragmented market'

In a hyper-connected IoT world it is not hard to imagine a trillion sensors collecting rich amounts of data that will provide new insights that will shape the way we live in our intelligent homes or commute in our self-driving cars. There is certainly no shortage of market research predicting healthy growth in the market for such sensors. This has led to much discussion about how to economically manufacture large volumes of sensors. Some people predict the demise of batch-based wafer processing and the potential need for new manufacturing technologies, such as roll-to-roll printing, to meet these demands.

While there will undoubtedly be a need for high volumes in some applications, a closer look at the market predictions tells a different story – one of deep fragmentation where there is tremendous diversity in both markets and applications within those markets. Take for example gas sensing with optical MEMS spectrometers; the range of gases and concentrations that need to be detected can be very broad meaning that the characteristics of each sensor need to be customised or tuned accordingly – this is compounded by differing application needs where the environmental demands of an automotive application will differ significantly from an indoor sensor application for buildings. Essentially the opportunities for electronic sensors ultimately comprise of thousands of niches where annual volumes can range from a few hundred to tens of thousands of sensors per year – with very few applications with requirements for millions or billions of sensors of the exact same type.

Why does this matter?

What this means is that the demand for new MEMS sensors can be mostly satisfied by existing semiconductor processing & packaging techniques and in many application cases, the volume of wafers required will actually be quite low.

In MEMS manufacturing, size is important; most sensing elements are quite small so if we were to take a typical 150 mm wafer with a sensing element that is 4 mm2, a single batch of 25 wafers can produce close to 90,000 sensors (assuming an 80% yield). This volume is enough to satisfy the annual needs of many companies. The paradox is that such low wafer volumes are not interesting to most contract manufacturers and the actual production costs will likely be dwarfed by the R&D investment to develop the sensor platform, and to then potentially transfer the technology to a new facility.

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Producing a single batch of 25 wafers of a custom design might cost between €50 & €100k to manufacture and

could yield upwards of 50,000 sensors which would satisfy

a whole year of production for

many companies.

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Sensor development versus manufacturing costs

The process of developing new MEMS, micro or nano-electronic sensor elements can be an expensive business. Depending on the complexity of the sensor and the maturity of the technology platform, development costs can run into millions of euros and take upwards of three years. While some companies do all of the work in-house, many companies are cannot justify this vertically integrated approach and are increasingly partnering with R&D organisations to develop new products. This allows them to leverage public funding and utilise expensive national research infrastructure, often using an existing technology platform that has reached a level of maturity (e.g. the research has taken the technology platform to a TRL level of 6 or 7) which makes the realisation of multiple individual products more viable.

To use an example from VTT Technical Research Centre of Finland’s own research activities, the company has developed a hyperspectral sensor manufacturing platform that can be used to produce MEMS based spectrometers for a range of sensing and analytical applications. The collective investment has been more than €5M and has taken over five years to realise. The groundwork and development has been funded by many successive projects, both private and publicly funded. The work has been carried out in the Micronova fab in Espoo which contains two large semiconductor cleanrooms and boasts a comprehensive range of analytical and processing equipment worth tens of millions of euros.

Most SMEs do not have the luxury of these resources in-house but can easily access the results through contract research to produce bespoke products, based on the technology platform, customised for their specific application needs. With many research organisations it is also possible to license the necessary IPR so companies can offer unique competitive products that are well protected in the market.

Producing a single batch of 25 wafers of a custom design might cost between €50 & €100k to manufacture and could yield upwards of 50,000 sensors which would satisfy a whole year of production for many companies. If these sensors are subsequently integrated into an instrument that sells for €1,000 per unit, then a €50M business can be enabled and sustained from a very low wafer manufacturing volume. In this example, it would be impractical for any company to bear these costs and amortise a €5M, multi-year development cost over a single batch of 25 wafers each year (€66k per wafer over three years!)

Tech transfer or not?

Historically, the prevailing logic has been to take the developed process and then transfer to a production facility but does this always make sense? With CMOS components, there are many foundries offering essentially the same process for different designs, this has led to many fabless semiconductor companies and a wide range of silicon foundries that can offer compatible manufacturing services. Conversely, manufacturing processes for MEMS sensors are notoriously specific to the process flows, recipes and equipment on which they were developed and undertaking a technology transfer project to a new facility can be expensive, risky and time consuming. Ultimately it becomes a question of volume versus marginal cost gains - if the subsequent annual volumes are low, it does not make economic sense to redevelop processes for a new facility as these costs may well exceed the ongoing low-volume manufacturing costs.

Many sensors but few wafers - Manufacture in an R&D Fab

When ongoing production needs are relatively low (<1000 wafers per year) it’s worth considering your R&D partner as a primary or secondary production source for sensor elements. In fact it offers you a direct path to production with some major benefits. Being able to save on conducting an expensive and potentially risky technology transfer project will likely offset any component price benefit gained by moving to a pure production fab. In an increasingly fast moving world, it is also possible to accelerate time-to-market by many months which can be especially beneficial to SMEs where cash flow is critical and lost time is lost revenue.

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It’s also worth noting that while the sensor element is the key enabler of many systems, the product value tends to be created at a system / service model level, with the actual sensor being a relatively small part of the overall system cost. In many cases the data collected is what now creates the real value and the sensor becomes a ‘means to an end’, albeit an important one. Anecdotally, there seems to be a hidden ratio in analytical systems companies whereby the sensor element manufacturing cost is often less than 2% of the total revenue of the company. Why undertake a risky tech transfer to reduce the cost of a €10 sensor by €3 when the system as a whole sells for €300 or even €3000?

From a business strategy perspective, the important question to ask is “Does the future marginal cost benefit of manufacturing in a production facility, exceed the combined value of the lost time, risk and cost of a tech transfer project?” Any technology transfer project should have a sound financial justification measured over the expected production timescale and total system costs.

A seamless route from R&D to volume manufacturing

There are a number of Research and Technical Organisations (RTOs) that will offer manufacturing services as it’s a good way to better utilise expensive fabrication facilities and ensure financial sustainability and future investments. It can also be extremely useful to have the researchers who developed the product, be readily available to troubleshoot if production issues occur. That said, there are pitfalls to be avoided; the inherent mindset of

a research organisation is different to that of a manufacturing company and it may not be able to offer the required operational procedures and quality certifications typically expected from a contract manufacturer. It also has the added challenge of dealing with a wide variety of projects, bringing a level of complexity that makes lean operations challenging. You should ensure that your partner has an organisation that is managing the fab operations separately in a professional way to ensure process capability, repeatability and traceability of activities. It may also be important for your partner to demonstrate resiliency of the fab where equipment downtime and recovery are treated with urgency.

Another alternative is that your R&D partner becomes a second source for your sensor components. Given the importance of the sensor at a system level, a business can be deeply exposed to risk should a significant disruption occur at a single source supplier. The R&D partner can start up and run initial production and even support the tech transfer operation to a commercial MEMS foundry meaning that your business can end up with two credible sources to meet your future volume needs.

Product realisation from ‘Lab to Fab’

Working with RTOs to develop products based on existing technology platforms is a cost-effective way for companies to realise innovative new products. If they can also provide the necessary operational competence and quality certifications your R&D partner can also become a credible supplier – offering you a ‘seamless route from R&D to volume manufacturing’ in sensor production. ●

The important question to ask is “Does the future marginal cost benefit of manufacturing in a production

facility, exceed the combined value of the lost time, risk and cost of a tech transfer project?”

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VTT TECHNICAL RESEARCH CENTRE of Finland is a multi-disciplinary RTO offering contract R&D services across a range of technologies including MEMS, photonics and nano-electronics. VTT Memsfab Ltd is a wholly-owned subsidiary of VTT that offers foundry services for industrial customers from the Micronova facilities in Espoo, Finland.

www.vtt.fi www.vttmemsfab.fi

⊲ Figure 4: Howard Rupprecht, CEO VTT Memsfab Ltd. ⊲