InvenSense Inc Is Poised to Win Share in MEMS Microphones

InvenSense has an advantage in the fastest growing segment of MEMS microphones.

Apr 3, 2014 at 12:00PM

According to a new report from IHS, MEMS microphone sales will exceed $1 billion in 2014, up 24% from last year. Long-term, the market is expected to reach $1.37 billion in 2017 with big customers Apple (NASDAQ:AAPL) and Samsung (NASDAQOTH:SSNLF) leading the way.

Both electronics giants feature up to three microphones in their handsets, and that may soon increase to four. Together, they are driving the market, particularly in the high-end MEMS microphones. IHS expects sales of high-end chips to increase 40% in 2014.

There are a few companies competing in this area, but two of the biggest names are STMicroelectronics (NYSE:STM) and InvenSense (NYSE:INVN).

What's driving the market?
Handsets and tablets make up the majority of MEMS microphone consumption. Whereas most cell phones were typically equipped with a low-quality microphone suitable for phone calls, today's high-end, and even the mid-end, smartphones require high-quality microphones. What's more, phone makers require multiple microphones now for noise cancellation and better speech recognition.

The two biggest high-end smartphone manufacturers are Apple and Samsung. Combined the two companies made up 96% of revenue for very-high signal-to-noise ratio, or SNR, MEMS microphones. The category is defined as an SNR 64 decibels or above. The companies use these high-end chips for improved voice commands through Siri or Google Now.

As more companies aim to differentiate their hardware, they may look to voice control to separate themselves from the pack. This will lead to more mid-range phones using very-high SNR microphones.

InvenSense vs STMicroelectronics
Although the two companies ended their legal battle and agreed to cross-license certain patents, the two MEMS chipmakers are still very much at ends when it comes to winning designs and increasing the top line.

Here, InvenSense's focus is starting to pay off. The company makes far fewer products than STMicroelectronics, specializing in MEMS chips, and got into MEMS microphones through the acquisition of ADI segment. As a result, its very-high-SNR microphone selection is rather robust.

In fact, its recently released ICS-40161 is a top-port microphone that sports 65 dB SNR and a very high 131 dB maximum SPL, or sound pressure level. The microphone, along with its sister bottom-port version, offers flexibility to OEMs looking for high-end microphones for both the top and bottom ports of their designs.

In total, InvenSense offers eight designs that qualify as very-high-SNR microphones including the ICS-40720, which sports a 70 dB SNR. (And remember decibels are on a logarithmic scale, so 70 dB is about four times more powerful than 64 dB)

Comparatively, STMicroelectronics doesn't sell a single microphone that fits the very-high-SNR bill. The highest SNR in any of its microphones is 63 dB, which qualifies as "high-SNR." Although, the market for these chips is growing, which is better than the shrinking low-SNR market, ST doesn't hold any particular advantage over the competition.

Growth despite the slowing smartphone market
There's still a lot of growth left in MEMS microphones despite the impending slowdown in smartphone sales. Samsung and Apple are leading the way in adding additional sound sensors to their designs to improve functionality.

Moreover, Samsung is investing heavily in wrist-wearables, and Apple is expected to follow. Voice control represents an elegant solution to significantly smaller screens on wearables, leading to an increased demand in high-end MEMS microphones. introduced another market for MEMS microphones on Wednesday with its voice-controlled set-top box. The company put the microphone in its remote instead of the box, which means users won't have to shout across the room, but a very-high-SNR microphone is ideal for such applications nonetheless. And it's these high-end chips that are driving the market higher as manufacturers maintain selling prices.

As more devices add voice control, MEMS microphone makers are poised to capitalize. InvenSense's technology is far superior to STMicroelectronics and privately held Bosch (Akustica). As a result, I expect InvenSnese to capitalize on the opportunity better than others.

Time to profit: 3 stocks poised to be multi-baggers
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have found multi-bagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

Adam Levy owns shares of Apple. The Motley Fool recommends Apple and InvenSense. The Motley Fool owns shares of Apple and InvenSense. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers