Jump in Q2 Smartphone Orders Lifts Silicon MEMs Microphones

Q2 2009 smartphone orders, up nearly15% sequentially, will lift the silicon MEMs microphone market from its worst year since they became commercially available, according to our report “Silicon Microphones and Speakers: Technology, Market Analysis, and End-Application."

Orders for smartphones reached 41.5 million units in Q2 2009 in anticipation of early Q3 introduction of several new models. Nokia's (NOK) Ovi Store launched on May 26. On June 6, the long-awaited Palm (PALM) Pre will launch on the Sprint Network (S). LG comes back to the market with two new touchscreen-based cellphones. New BlackBerrys are also rumored to be hitting stores soon. I anticipate the iPhone 2009 will be announced next Monday at the Apple (AAPL) WWDC and the new iPhone 2009 out near the end of June.

You probably use them every day and don’t realize it and most likely never heard their name or know how they work. They’re in the iPhone, Wii (NTDOY.PK), and Fords (F). The list of companies that make them are common household names - Analog Devices (ADI), Freescale Semiconductor (FSL), Hewlett-Packard (HPQ), and Texas Instruments (TXN).

MEMS, or MicroElectroMechanical Systems, are a class of semiconductor chips that also contain mechanical or moving parts. They function as accelerometers in cars for airbag deployment in collisions, in the iPhone to manipulate screen orientation, and in the Wii game system as a motion-sensitive controller. They work as silicon pressure sensors to monitor car tire pressures.

The MEMS silicon microphone market has become a hotbed of activity, spurred by record-breaking growth in consumer electronics products such as hearing aids, cellular phones, cordless phones, headsets, and headphones. Initial entrants that included Knowles Acoustics (Dover Electronics (DOV))), Akustika, and Sonion (Denmark) has grown to include Analog Devices, Wolfson Microelectronics (UK), Freescale, STMicroelectronics (STM), Infineon (IFX) and Omron (Germany).

China suppliers entered the market in recent years and include Shangdong Goer Acoustics Technology Co. Ltd, Suzhou MEMSensing Microsystems Co. Ltd., and AAC Acoustic Technologies (Shenzhen) Co. Ltd.

For 2009 the report forecast a 5% downturn in the cellphone market, from 1,216 million units in 2008 to 1,156 million units in 2009. The smartphone market, which includes the iPhone, will grow 21% from 196 million units in 2008 to 238 million units in 2009. This sector is the key growth area for the MEMS microphone.

Disclosure: No positions.