TeraVicta and the RF MEMS switch market

MEMS based switches for RF circuits are one of the most promising applications in the field.  We spoke with TeraVicta’s President and CEO Ray Burgess about his company’s recent activities, plans for the future as well as the size and growth potential of the MEMS based switch market.

MEMS Investor Journal: What does TeraVicta do? What do you your products do and where are they used?

Ray Burgess: TeraVicta is focused on the design, manufacture and distribution of MEMS based switch solutions. Our initial products leverage the superior MEMS qualities of broad bandwidth, low insertion loss, high linearity, great repeatability and small footprint to address the high frequency and broadband switching needs in test, instrumentation and communications.

MEMS Investor Journal: Where is this main need for your products?  Why are your products better then existing components?

Ray Burgess: The market need for small signal switches is well established. Market estimates put this market at over $900m in 2006, growing at 14% per annum over the next 5 years. This market is served by mature technologies such as relays and solid state switches, which are reaching limits of where they can go in terms of size, performance, reliability and cost. MEMS bring a new paradigm to this market, delivering order of magnitude improvements in key characteristics that our customers really care about. A dramatic improvement in insertion loss and linearity over traditional solid state switches really matters to a manufacturer of advanced wireless communications devices. These same characteristics, plus outstanding repeatability, a 10X increase in lifetime and 10x reduction in footprint over mature relays really matters to a manufacturer of semiconductor test equipment or instrumentation. In addition we see many new applications that just weren’t practical or possible with existing technologies due to performance or size, that are now being enabled by our MEMS switches.

MEMS Investor Journal: When was the company founded and where did the technology come from?

Ray Burgess: The company was founded in July 2000 as a spin-off from Austin’s Microelectronics and Computer Technology Corporation (MCC), a research consortium sponsored by the global leaders in the communications and computing world.  The underlying MEMS technology work was started in 1997, within MCC, to meet the needs of the consortium members. TeraVicta acquired all rights to the initial work and has developed and refined the technology over the past 6 years. The company now holds 13 patents on the process, construction and methods of MEMS switching with several more filings in progress.

MEMS Investor Journal: Since the company's founding, what major milestones have been accomplished?

Ray Burgess: There have been many firsts, accomplishments, awards and patents over these past 6 years. However, when we look back the accomplishment that will be recognized as having had the most profound effect on the MEMS industry, it will be the launch of our second generation product line in 1Q 2006. With this launch MEMS switch technology finally became available in a commercial surface mount package, at delivered quality levels and lifetime switch reliability that compared and/or exceeded those of the mature established technologies. Almost all the RF-MEMS switch companies had failed at this hurdle, so we are particularly proud of this accomplishment.

MEMS Investor Journal: You came on board as the CEO last November.  Why did the company make a management change?

Ray Burgess: The TeraVicta team is to be commended for their leadership in developing a process, packaging technology, test methodology and product that can fulfill the commercial promise of MEMS switch technology. The company is now moving from its research and development phase to build on that promise and create a successful commercial enterprise. We are adding new leadership and capabilities to aid with this transition and accelerate the growth phase of the company.

MEMS Investor Journal: Who are your primary customers right now?

Ray Burgess: The initial focus is on those companies that are involved in the test of high performance or high frequency semiconductors. That includes the semiconductor companies themselves, plus the major test and instrumentation equipment companies that serve them. Beyond that, we are also working with the global leaders driving the food chain for new wireless communications products and systems.

MEMS Investor Journal: Where are your products currently being designed in?

Ray Burgess: We have now provided MEMS switches to over 200 companies. This covers a wide base of applications across the test, instrumentation and wireless communications industries. There are too many to list here, but let me give an example in the semiconductor test space. We have significant engagements with the major players in ATE systems, semiconductor device loadboards and calibration systems. Our MEMS switches provide unique advantages that facilitate the test of high performance processors, DSPs and systems on a chip. For instance, one of our upcoming products is ideally suited to testing the latest generation of high speed serial interconnect ports, another is targeted at reducing the test footprint of very high pin count load boards. Having mastered the basic technology, we can now focus on application specific products and solutions for our key customers.

MEMS Investor Journal: What are the primary objections you hear from your potential customers?

Ray Burgess: The small signal switch market is very large and diverse. TeraVicta has introduced a very competitive initial product, but it doesn’t yet have a broad portfolio. Some customers would like different switch configurations, higher frequencies, lower cost or better tolerance to hot switching. We have plans in place to address all of these requirements and will be introducing three families of products in 2007.

MEMS Investor Journal: What do you plan to accomplish over the next year?

Ray Burgess: Dispel the myths that MEMS switch technology is difficult to manufacture, expensive, unreliable or hard to use. These are all mistaken perceptions created by the poor performance and errors of early players in the field. TeraVicta MEMS switches are proof that the technology is ready for prime-time. We deliver volume product that meets customer expectations for quality and reliability and at cost points that position the product very favorably against current switch solutions. We still have an issue of awareness and confidence in the market, which we aim to address in 2007.

MEMS Investor Journal: What are the main challenges you are facing right now as a company?

Ray Burgess: The key challenge is getting over the bad impressions set by some prior participants in the field – that caused many potential customers to be wary of MEMS switches. Several companies promised to introduce products but were unable to achieve acceptable levels of quality and reliability. Others managed to sample, but couldn’t scale production. At TeraVicta we were very careful to get our product right before launching into the market. We own and operate a fully integrated wafer fab, assembly and test facility that ensures we control quality and can drive new product introduction. We are also bringing up a dedicated low cost facility in Asia to permit us to scale volume in 2008.

MEMS Investor Journal: Who are your competitors and what makes your company different?

Ray Burgess: Currently, we don’t see MEMS competitors in our focus volume commercial markets. We compete with incumbent mature products, such as electro magnetic relays, reed relays and solid state switches such as pin diodes and FETs. We compete against these older technologies by delivering significant improvements in a combination of performance, features, size, reliability and cost. It depends on the application and the incumbent solution. We expect to see MEMS competitors in the near future, but we believe that our combination of strategic in-house integrated manufacturing and the first mover advantage of building volume in a dedicated low cost foundry will enable us to continue to set the pace in this exciting new technology area.

MEMS Investor Journal: How big is the current MEMS based RF switch market?  How quickly do think it will grow over the next few years?

Ray Burgess: We don’t just look at the RF MEMS switch market. We supply small signal switching solutions that employ the unique advantages of MEMS materials and manufacturing to deliver compelling customer benefits. This market was over $900m last year, will be over $1bn in 2007 and is expected top grow at 14% per annum over the next few years. We have demonstrated that MEMS switches are ready for prime time, by meeting the requirements of the small signal switching market. We expect to enable new applications and drive significant growth in this exciting space.

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Ray Burgess has extensive experience in corporate leadership and general management with more than 25 years in the semiconductor industry.  Mr. Burgess joined the TeraVicta team as President and CEO in November 2006 after spending a year as CEO of Tao Group, a UK company delivering multimedia software solutions to the wireless industry. Mr. Burgess spent over 20 years with the Motorola Semiconductor Products Sector and was a member of the executive team that led the company through its transition to Freescale Semiconductor and its successful IPO in July 2004. From the end of 2000 through to the IPO, he was senior vice president of strategy and marketing. During his career at Motorola, Mr. Burgess held a number of leadership positions in Europe and the USA. Before joining Motorola, Mr. Burgess spent four years at Texas Instruments. Mr. Burgess currently serves on the Board of Directors of Zoran Corporation (Nasdaq: ZRAN) and served on the Board of Directors of Tao Group from 1996 to 2006.