Report: MEMS Down But Not Out

SCOTTSDALE, Ariz., April 25 -- Despite the continued downturn in spending on telecom components, 2002 was surprisingly strong for suppliers of microelectromechanical systems (MEMS)-based solutions to the optical networking market, reports In-Stat/MDR. Many of these devices have now passed Telcordia standards, giving them real respectability within the market, the market research firm said.

According to its report, "MEMS and Optical Networks: Down But Not Out," although the market for MEMS in optical networking may be down from previous forecasts, it will experience a compound annual growth rate of 41.8 percent through 2007.

"While device reliability is no longer the issue, company stability is," said Marlene Bourne, a senior analyst with In-Stat/MDR. "Fully 50 percent of the companies known to be developing MEMS solutions for optical networking have closed their doors, and the question lingers as to who will be next."

Even so, those remaining in the market were still able to raise more than $55 million in venture capital funding throughout 2002. According to Bourne, "Other trends in this market include a noticeable change in the types of devices that have gone into volume production -- more companies are now offering variable optical attenuators and tunable filters, and there has been a discernable shift to small and 3-D switches. In addition, the increased presence from Asia-Pacific companies cannot be ignored."

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