>> Microsystems

The European micro-nanotechnology
business accelerator for small
and medium-sized enterprises

Value Chain Overview and Examples
The following chart illustrates a rough overview of the current value chain within the segment “Microsystems”. In conclusion, this sub industry can be characterised as fast growing. All major players are more or less well established and connected in the market. Nevertheless, there is still room for improvements. Obviously, the segment indicates a low specialisation degree concerning types of companies, which normally gives indication about weak competition and potential areas for improvements in efficiency. Especially to mention is the fact, that a value chain break can be identified between the design & production and end product manufacturing companies. This circumstance indicates that this sub industry is very well experienced in the development of customised products but still has to exploit the potential for mass production.

The Swiss Center for Electronics and Microtechnology CSEM is a privately held company carrying out
  1. Applied research work
  2. Product development and
  3. Prototype and low quantity production.
By offering its high-tech know-how, competencies and expertise, CSEM anticipates and fulfills the needs of industrial partners. In particular, it supplies customised microsystems, microelectronic designs and system solutions, as well as specialised coatings and materials. CSEM also develops its own commercial activities, either with existing companies or through the creation of start-up companies. CSEM was founded in 1962 as the Centre Electronique Horloger (CEH) with the intent to design a new generation of wristwatches for mass production.

The following example should demonstrate the ability of CSEM to integrate innovative solutions into competitive products. By combining original concepts with innovative components CSEM has developed an optical reader for payment slips, which significantly eases modern e-banking. This unique micro-opto-electronic technology brings new potential for a variety of other applications, in addition to enhanced performance and cost effectiveness. Beside a profound basis in technological know-how acquired by research and development activities, this process requires product engineering skills that range from component optimisation, production test and quality management, to appropriate manufacturing partner networks. Not just that the product was successfully launched in the year 2000, but also a spin-off company was founded (xemtec optical sensing solutions).
Sometimes it is an advantage if entrepreneurs, despite pressing deadlines, do not entirely throw their free time to the wind. It was while wind-surfing that Jean-Daniel Carrard of JDC Electronic SA came up with the idea of developing a small, handy velocity gauge. Now, surfers, sailors and motor boat captains around the world are snatching up his "Speedwatch". Most of them would like to know how much "speed" that have attained with their board, dinghy or yacht. Not only for fun. Knowing the exact velocity allows them to make dependable travel time. Velocity is not usually measured at the same place where the result is to be displayed. It is therefore generally transferred over a cable or a wire. With water-vehicles, there is the problem of how to keep the hull of the boat from becoming damaged. The system of wireless magnetic data transfer (a JDC patent) solves the problem: the distance between the measuring- and display- instruments can be up to a meter.

The magnetic transfer, combined with a solar panel, a measurement probe and a display in one user-friendly system – this is JDC’s product innovation. JDC had already developed the cableless magnetic data transfer earlier. In the early days, all the components for it were produced by the company. Later, JDC got involved with a development engineer for a project dealing with a use-specific integrated switch for velocity measurement and display. The developer came to the conclusion that a microsystem with low power requirements was the right product for this use. The joint work with local players took two years time from the specification of the microsystem to its production. The prototype production was planned so that the "Speedwatch" could be presented at the large nautical trade show "Motor Boat and Sailing" in Miami.
Not every initiative has to be driven by the consumers. As an example for successful business realisation is the development and launch of Microsystems, which continuously measure pressure and temperature of tiers (e.g. SensoNor in Norway). This product will recognise increasing demands due to legal and environmental changes. The development and distribution of products, which are forced to use by government law, will generate by sure sustainable income.

Statements about Industry Characteristics
The Microsystems which presents itself as fast growing sub industry
can be characterised as follows:
  • Only a few established players are profitable, due to their critical size. They currently start to dominate their market niches and cover a large part of the value chain. They still have the potential to launch new applications with attractive margins. Therefore these companies are currently not forced to focus more on efficiencies. This may be a comfortable circumstance for these established players but neither supports the development of a mass market nor the exploitation of the variety of adaptations. Additionally, the absence of increasing standardisation interrupts the evolution of specialisations which normally influence the potential leeways of outsourcing business and to possibility the concentrate on core competences.

  • The capital market normally supports the development of new businesses as well as increases the level of competition, as it was also identified in this sub industry, but today additional capital is practically inexistent due to downturns and investors’ concerns. Many start-up companies, which were funded just a few years ago, are currently running into problems due to continuous burning costs. In smoothly functioning markets start-ups take the role to compete against established players and ensure continuous industry evolution. This market mechanism does unfortunately not work in the Microsystems segment at present.