LONDON -- Jim Jones, a managing director with Bank of America Venture Partners (Foster City, Calif.), is adamant that microelectromechanical system (MEMS) technology can be a good investment. Indeed, his partnership believes it has got a handle on what makes for success in this area and is looking for further opportunities to invest in MEMS.

For some people the complexity of MEMS processes and the fragmented and immature nature of MEMS design and manufacturing makes MEMS a no-go area … for others the challenge means there is also opportunity.

Jones admits that BAVP has invested in a MEMS company that got caught up in the broadband bubble … an optical cross-connect company that was going to use MEMS for optical switching. The post-bubble crash caught that company out, as it did many others, Jones said, and that crash has soured many investors' opinions of MEMS technology. "It has held back the MEMS industry but it did give us insight," said Jones.

BAVP is now an investor in another MEMS company, Innovative Micro Technology (Santa Barbara, Calif.) which has been set up as a foundry (see Jan. 26, 2005, story).

One could argue that the MEMS design and manufacturing processes have yet to stabilize sufficiently to allow the MEMS industry to divide into the fabless designers and the fabbed makers of components.

At present there are almost no dominant standardized processes in MEMS. And as a result designs tend to be technology-driven with engineering teams calling for unique process steps and customizations on many designs, a recipe for low volumes, high costs and a lack of critical mass.

Jones hears and responds to the arguments: "The MEMS industry is somewhere equivalent to where the semiconductor industry was in 1980. It's true that most of the volume in MEMS is in vertically integrated companies such as Texas Instruments, Analog Devices and Hewlett Packard. It's also true that what has yet to happen is independent packaging for MEMS."

However, Jones believes that by sticking to its strengths in deep reactive ion etching and metal layer deposition, particular magnetic metals, IMT can start to create that standardization. "IMT used to be Applied Magnetics, a manufacturer of read/write heads. When you are an expert in metals and magnetically activated structures it creates all sorts of possibilities in micro-fluidics, and lab-on-a-chip applications, for example.

"In IMT's case it is not possible to say we can do anything for anybody. Success comes from finding something that is difficult to do that we do very well," said Jones. "Now we are seeing a much more diverse set of industries taking advantage of MEMS. There are still opportunities in telecom, and in things like road-side switch interconnect the volumes are phenomenal. But in automotive there is more and more demand for sensors, and in consumer there are applications like microphones, gyroscopes and RF switching."

"IMT was profitable in the second half of last year," Jones claimed. "We are looking for MEMS opportunities. We are encouraged by what's going on in the area of MEMS packaging," Jones concluded.