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MEMS Opportunities and Challenges Tom Willey October 6 th 2010

This presentation by Tom Willey covers the market dynamics, investment trends, and the journey of MEMS products in the electronic oscillator industry. Learn about building MEMS products, investment needs, and the challenges faced in MEMS innovation. Explore the landscape of tomorrow’s electronic heartbeat and the core values of MEMS-based oscillators. Discover the complexities of building a MEMS oscillator and the current market penetration of Discera MEMS solutions. Gain insights into venture investment in the semiconductor industry and the importance of capital efficiency in MEMS innovation.

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MEMS Opportunities and Challenges Tom Willey October 6 th 2010

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  1. MEMS Opportunities and Challenges Tom Willey October 6th 2010

  2. Agenda • Introduction TW-Partners • Discera – MEMS • Market dynamics • What was involved in building MEMS product • What happened • Investment – MEMS • Today • What’s needed

  3. TW - Partners • Founded in 2008 by Tom Willey & Mark Konopacky • Business Development Services • HQ in Silicon Valley • Locations in Tokyo, Cambridge & Seoul • Broad Management & Partner Core Competence • Strategy, Sales, Marketing, Finance, Funding • Broad Market Segment Expertise. • Extensive Global Client Business Development.

  4. Electronic Heartbeat - Quartz • Every electronic device contains an oscillator • Electronic heartbeat • Quartz crystal is dominant • $3.5B – 10B units • 15% growth • 100 year old technology • Very mature life cycle • Difficult to innovate • Low margin

  5. Tomorrow’s Electronic Heartbeat - Si • Large existing market • No market risk • Extremely attractive to venture backed start-ups • Silicon knocking on the door • Lots of players stepping up with Si solutions • Definite exits • M&A • IPO possible • Discera – Core Value • MEMS-based oscillator • 60% GM, with ASP less than Quartz manufacturing cost

  6. Building a MEMS Oscillator – Easy? 1) Resonator 2) Packaged Resonator 3) Resonator + ASIC 4) Packaged Oscillator 5mm x 3.2mm

  7. Resonator • First Silicon ≈ 1996 • Univ Michigan internal Fab • Discera Funded – 2001 • Technology spin-out • Resonator “ready for productization” • Productization - 2008 • Multiple major revisions • 2 MEMS fabs • Many Issues • Multiple experimental split lots to solve • Difficult to predict cause and effect • Lots of “black magic” Resonator

  8. ASIC, Package & System • ASIC • Design process well understood • Fab – design kits • Good design tools • Packaging design • Simple plastic – low cost • Main Issues – Stress • Multiple experimental split lots to solve • System • Difficult to predict cause and effect • Lots of “black magic”

  9. Today • 2010 - Discera is now shipping in volume and gaining market penetration • Future looks promising for Discera MEMS solutions in the clock timing market • But • 9 years - $60M++ to get there • Allowed competition to gain foothold • SiTime entered the market 2005 using Bosch technology • Large venture investment • Used Bosch MEMS technology • Now possibly ahead of Discera

  10. Why did it take so long & cost so much? RESONATOR & PACKAGE ASIC Multiple Chip Designs Worked as expected On Time On Spec On Budget Used two different fabs Designs were transportable and reusable Relatively few issues Design rules Good tools • Design & simulation “Designing is an art” • Lots of experiments • Virtually no re-use • Almost no design tools • Device, system, package • Fabs look like a sandbox to the artist • No design kits • Similar to the Industry in the 70’s

  11. Venture Investment in Semiconductor • ROI • Most Si companies need ≈ $60M - $80M in to get an exit • Very few exits see $60M-$80M • Almost no exits > $100M • For VC’s - not likely to even get their money back • RESULT: Almost impossible to get new investment in Silicon • Acquirers – Major Si Companies • Fewer companies getting funded means less innovation • Bad for industry outlook • Need to get Venture ROI back on track • Risk minimization • Capital efficiency - < $10M-$20M total investment

  12. MEMS Innovation • No shortage of MEMS opportunities/ideas • To become real • Companies have to be funded • Investors want higher capital efficiency and % of success • Devices have to work 1st time • MEMS design/development ecosystem requires drastic improvement • Designers • Semi Fabs • EDA tools companies

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