Doug Sparks, CTO, Hanking Electronics
The COVID-19 crisis began in Wuhan, China, during the Chinese New Year in mid-January. This resulted in quarantines and local travel restrictions, spreading to the rest of China by the end of that month. At Hanking Electronics, with microelectromechanical systems (MEMS) fabs, labs and offices in China, Italy and the US, we witnessed the progression of the pandemic and its impact on the global microsystems industry first hand.
Many nations began to restrict international travel to China, followed in a few weeks to Italy, South Korea and other countries. The combination of lockdowns and travel restrictions have forced work changes across many industries, including those supporting the micro-nano ecosystem.
COVID-19 infection prevention guidelines have meant that many of us are now accustomed to wearing masks and gloves outside of our homes. As shown in figure 1, MEMS wafer fab engineers work in what would seem ideal conditions during a respiratory pandemic, namely HEPA-air filtered Class 10 or 100 environments, wearing protective masks, gloves and suits. Unlike them, MEMS office employees, such as MEMS and integrated circuit (IC) designers, have, in most countries, been forced to work from home. Working in Asia typically involves long hours in the office and the abrupt change to remote working required something of a revolution in work practices. Many design groups were not prepared for teleworking.
Figure 1
Figure 1: Microelectromechanical systems (MEMS) wafer fab engineers work in HEPA-air filtered environments wearing masks, gloves and suits.
Mary Ann Maher is CEO and founder of SoftMEMS, a provider of CAD software for MEMS design and analysis, and has been pushing the microsystem community towards cloud-based design for several years. She explained that many SoftMEMS customers using OnScale design software on-premises were completely caught off-guard when their offices abruptly closed during the COVID-19 crisis and their engineers could no longer access local OnScale licenses running on desktop CAE workstations. Fortunately, these customers were able to keep their engineers productive while working from home by switching to OnScale Cloud, which works just like a local desktop simulation tool but uses the power of cloud supercomputers to execute simulations. With OnScale Cloud, massive simulation studies of MEMS, biomedical devices, 5G radio frequency (RF) MEMS and much more can be set up and executed on the cloud from a low-power laptop. An example of the cloud-based, remote design cycle that is now available for MEMS devices such as the piezoelectric micromachined ultrasonic transducers (PMUTs) is shown in figure 2. The MEMS CAD-finite element modelling (FEM) work steps at the top of the figure can be completed remotely, at home, using cloud-based software.
Figure 2
Figure 2: A cloud-based remote design cycle for piezoelectric micromachined ultrasonic transducers (PMUTs).
Home quarantining and remote working have also changed the sales and marketing process. Since most international travel has been halted, a number of 2020 micro-nano-focused conferences and trade shows have been cancelled, postponed or gone virtual. Some countries have imposed a quarantine period after international arrival, to be spent at an airport hotel or apartment. Even travel between major cities in China can incur a quarantine period. These restrictions make traditional face-to-face sales and marketing activities impractical. INERTIAL 2020, the 7th IEEE international symposium on inertial sensors and systems, took place virtually in March. SEMICON China 2020, one of the largest international microelectronics trade shows, had to be postponed and took place three months later in June as more of a national event . The conference and exhibition could be attended by people in China and the organisers streamed some conference sessions for the benefit of would be international travellers. COMS (Commercialization of Emerging Technologies) 2020, a conference focusing on the application of micro- and nanotechnologies in the environmental, health/medical and security and resilience fields, is to take place virtually in October. We can expect to see more virtual events as the year progresses.
Most wafer fabs have continued to operate as normal through the pandemic, even in Wuhan and elsewhere in China. There was a short supply shock for parts and chemicals in February for some wafer fab and packaging materials companies in Asia. Smaller companies in the wafer fab supply chain located in large cities that were locked down caused problems for fabs and fab tool OEMs for several months. As employees fell sick and quarantines tightened, work slowed in affected regions. Wafer fabs in Malaysia have reported that the government required companies to request permission to continue operating at 50 percent staffing levels. One wafer fab in the EU had to temporarily reduce production due to their labour union insisting on temporary workforce reductions. Electronic assembly ground to a halt for several months in China. Large factories and wafer fabs typically have significant spare parts on hand, but smaller fabs, often MEMS fabs, take a just-in-time (JIT) inventory management approach. JIT relying on international supply lines meant that it failed during the COVID-19 pandemic, therefore just-in-case (JIC) management will need to be implemented in future to prevent downtime.
The supply chain disruption has prompted a hard look at the use of 3D printers to support many wafer fabs. They are already used to produce parts for 150 and 200 mm wafer size legacy tools. In the future, we will see an increase in the number of onsite metal and plastic 3D printers in virtual warehouses to support and shorten the MEMS fab supply chain. Many repair parts will be 3D printed onsite when needed for wafer fabs, thus eliminating the logistical problems that have been encountered this year. MEMS fabs themselves will also use 3D printers for replacement parts for facilities and equipment, to quickly print cavity package housing and even structured MEMS wafers1. 3D printers are set to become a common tool in wafer fabs, affording a reduction in downtime, shipping and custom costs as well as a significant improvement in supply chain resilience.
COVID-19 travel bans highlighted the importance yet lack of local support for wafer fabs. For wafer fabs in Asia, only local and large international companies with a presence in the country or region could provide support during the periods of international travel bans. Applied Materials, a supplier of material engineering solutions for the manufacture of chips and advanced displays, was able to support the wafer fabs in China. Mike Rosa, CMO at Applied Materials, said that manufacturing did not stop at facilities in Xi’an, China, and the US during the COVID-19 outbreak. The company kept a reduced staff on site to manufacture fab equipment and run sample demo wafers for customers in cleanrooms. The wafer fab tools are automated, so an engineer can load one or more cassettes of 25+ wafers for overnight processing and then control the fab tools remotely. All office staff worked remotely during the peak of COVID-19. New safety protocols were put in place and floorplans changed to provide more desk spacing and ensure social distancing on their return. It was found that many office functions such as accounts, design, legal and marketing could be performed very well remotely.
COVID-19 has not only caused a supply and labour shock to the micro-nano ecosystem, but also a demand shock for many MEMS devices used in consumer and automotive products. Starting in February, sales fell and stores closed in China, soon followed by Italy and elsewhere. According to Gartner, global smartphone sales for Q1 2020 totalled 299.1 million, down from 374.9 million for Q1 20192. If one assumes each mobile product incorporates at least 10 MEMS chips—for example, electronic compasses (e-compasses), filters, inertial measurement units (IMUs), microphones and oscillators—this drop of 75 million smartphones roughly translates into a 750 million reduction in MEMS devices for Q1 2020. Automotive sales also saw a dramatic drop in Q1 2020, significantly impacting associated sensor sales since one vehicle alone can incorporate up to 40–70 sensors. In late June, a second wave of cases meant that stores in COVID-19 hotspots had to close again, prolonging the period of slower sales.
Lower sales of microsystem products will affect investment in future commercial products. Mergers and acquisitions (M&A) and initial public offerings (IPOs) in our industry slowed at the end of Q1. Only deals that were near completion in March went forward, while most others were abruptly stopped through June. Micro-nano startups not directly dealing with COVID-19-related sensing and diagnosis experienced trouble as investment slowed. Weaker suppliers will struggle and perhaps go out of business or be acquired. We may see a number of insolvency acquisitions in our industry at the end of 2020.
However, there have been bright spots for microsystem products this year. Flow and pressure sensors for ventilators, infrared (IR) sensors for thermometry and microfluidic diagnostic systems for detecting COVID-19 virus antibodies have seen a huge surge in sales. Governments placed orders for hundreds of thousands of ventilators, all of which use MEMS sensors. Cepheid, a pioneer in microfluidics, was given emergency FDA approval for its COVID-19 diagnostic test system. More than a dozen similar diagnostic systems are being used to test potentially infected patients. In May, many government agencies and programmes began to direct more money towards COVID-19 research and speed up the approval process for related medical devices, drugs and treatments. China, Japan, the US and other countries have also provided infrastructure funds to increase local manufacturing, especially for the medical device, pharmaceutical and semiconductor companies in the micro-nano-related supply chain.
Microsystem industry groups such as MANCEF, SEMI and the Semiconductor Industry Association (SIA) have been lobbying governments for more support as well as providing networking platforms for the exchange of ideas on how to best navigate the new government regulations and grant opportunities. For example, in May, the SIA sent a US$37 billion proposal to the US government that includes subsidies for the construction of one or more new chip factories, aid for states seeking to attract semiconductor investment and an increase in research funding3. Look out for and support these groups as they continue, through their lobbying and networking efforts, to bring about change in 2020.
Hanking Electronics
References
1Sparks, D. (2019). The advantages of using additive micromanufacturing in the fabrication of MEMS wafers and sensors. CMM, volume 12, issue 6.Available at: https://bit.ly/2Vjv14A
2Gartner says global smartphone sales declined 20% in the first quarter of 2020 due to COVID-19 impact [press release]. June 1, 2020. Gartner.Available at: https://gtnr.it/3epHSuj
3Davis, B., Fitch, A. and O’Keeffe, K. (2020). Semiconductor industry to lobby for billions to boost US manufacturing [press release]. May 31. Wall Street Journal (WSJ).Available at: https://on.wsj.com/2ANqilH