MEMS WARS A New Hope. Kurt Petersen, PhD Band of Angels

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1 MEMS WARS A New Hope Kurt Petersen, PhD Band of Angels IEEE MEMS April 30, 2014

2 Growth of MEMS 60 s -70 s Industrial 80 s Medical 80 s -90 s Automotive 2000 s Consumer 2010 s Consumer + Bio-MEMS + Environmental Shipped Volume - units

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4 My Background IBM Research 1975 Started MEMS research TDI 1982 Merged with IC Sensors NovaSensor 1995 Acquired by GE Cepheid 1996 SiTime 2004 IPO in 2000; CPHD has ~$3B market cap and $450M yearly revenue run rate Has sold >200M MEMS oscillators for video monitors, cameras, PCs, etc. Verreon 2008 Acquired by Qualcomm Profusa 2009 Band of Angels 2011 $6+M from NIH, over 4 years $4.2M angel and Series A rounds Mentoringand investing group for start-up companies IEEE MEMS April 30, 2014

5 MEMS die CMOS die

6 Recently, Billionsof MEMS Devices Sold Avago >2B Cell phone filters As of Q Robert Bosch >1B Automotive sensors As of Nov 2008 Knowles >1B Microphones As of Sept 2009 Texas Instruments >10 14 Light modulators As of Dec 2009 GE NovaSensor >900M Pressure sensors As of Aug 2013 ST Micro >1B Accels and Gyros As of Dec 2010 HP Billions and Billions of ink jet nozzles Cepheid ~$1B Microfluidic systems As of Q SiTime >200M MEMS Oscillators As of Q IEEE MEMS April 30, 2014

7 Biomedical MEMS 2 cm Detector RF Protein Panels Cellular Manipulation Contact Lens Sensors More Fluidics Sports Monitoring..... etc

8 Mobile as an Innovation Platform Credit Card Reader Blood pressure monitoring cuff Glucose Finger-stick Sensor Pico-Projector Ultrasound machine from Mobisante went on sale in October 2011

9 Three ENORMOUS IoE Initiatives Trillion Sensor Roadmap!! initiated by Janusz Bryzek ZE hand

10 IEEE MEMS April 30, 2014 IBM Research

11 IBM Research, San Jose One of the labs had a large, black stain on the floor in the hall. They were building/testing silicon ink jet printing nozzles Under the microscope, these devices were intriguing - ½ µm thick SiO 2 films standing free. Since I was in the optics group at the time, I built an array of tiny cantilever beams for modulating light.

12 I was Hooked!!.... started building many other structures from this free-standing oxide. Then, many other types of MEMS devices... Electrical Switches Accelerometers

13 IEEE MEMS April 30, 2014

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15 IEEE MEMS April 30, 2014 NovaSensor

16 NovaSensor Founders: Janusz Bryzek, Joe Mallon, Kurt Petersen Investor: Schlumberger, a down-hole oil services company Investments: $2.5M equity $2.5M for 3 contract R&D projects Both Januszand Joe had experience manufacturingand selling MEMS pressure sensors. Our business plan was described by one person as a bible on MEMS, because we were so passionate about MEMS technology. First market segment: biomedical Lots of internal and contract R&D IEEE MEMS April 30, 2014

17 NovaSensor Founding Team Kurt Joe Janusz

18 IEEE MEMS April 30, 2014 NovaSensorgets funded!!

19 NovaSensor Wafer Bonding + DRIE

20 NovaSensor R&D Team Joe Farzad Rose Lee Kurt

21 IEEE MEMS April 30, 2014 We had 2 lay-offs

22 We were sued IEEE MEMS April 30, 2014 Merc News front page business section 3/5/89

23 IEEE MEMS April 30, 2014 Founders had moustaches...

24 ..... and we still do. picture of Janusz, Joe and I

25 NovaSensorProducts Second source disposable blood pressure sensor developed in response to a customer inquiry VERY tight distributions of parameters (sensitivity, offset, etc) higher yields shipped as die (no packaging issues) more reliable deliveries This first product got NovaSensor into production We had no fab, but... first production shipment was 6 months after funding, 12 weeks after wee took the first order Later products got NovaSensor into : Industrial Consumer Automotive IEEE MEMS April 30, 2014

26 IEEE MEMS April 30, 2014 Cepheid

27 Cepheid Founders: Tom Gutshall, Kurt Petersen, Bill McMillan, Greg Kovacs, Lee Christel, Farzad Pourahmadi, Allen Northrup Investors: HNW individuals, seed investor CampVentures Investments: self-funded for 18 months Series A - $3.2M - Mar 1997 Series B - $10.5M - Nov 1998 Series C - $19.2M - Feb 2000 IPO - $32.4M - Jun 2000 Various after market - >$10M First product, SmartCycler, shipped 39 months after start IEEE MEMS April 30, 2014

28 Cepheid Founding Team One year later Bill, Greg, Kurt in 1997 IEEE MEMS April 30, 2014 Tom, Bill, Kurt, Cris in 1997

29 IEEE MEMS April 30, 2014 Cepheid First Shipments

30 Cepheid IPO: June 21, 2000 Kurt Cathy Tom IEEE MEMS April 30, 2014

31 Cepheid Quarterly Revenue $120,000 $110,000 $100,000 $90,000 $80,000 FDA-Approved Diagnostics $70,000 $60,000 $50,000 $40,000 $30,000 Revenue from USPS IPO $20,000 $10,000 $0 Q1'99 Q1'00 Q1'01 Q1'02 Q1'03 Q1'04 Q1'05 Q1'06 Q1'07 Q1'08 Q1'09 Q1'10 Q1'11 Q1'12 Q1'13 Q1'14 IEEE MEMS April 30, 2014

32 Cepheid Stock Price $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 6/1/ /1/2000 6/1/ /1/2001 6/1/ /1/2002 6/1/ /1/2003 6/1/ /1/2004 6/1/ /1/2005 6/1/ /1/2006 6/1/ /1/2007 6/1/ /1/2008 6/1/ /1/2009 6/1/ /1/2010 6/1/ /1/2011 6/1/ /1/2012 6/1/ /1/2013 6/1/2014 Anthrax Attack FDA-Approved Assays 2008 Crash

33 Cepheid Hardware Development Optics/Reaction PCR Module Smart-Cycler for Life Sciences GeneXpert for Diagnostics IEEE MEMS April 30, 2014

34 Cepheid Today CPHD is one of the Silicon Valley 100 largest companies total revenue in 2013 of >$400M Revenue growth rate of 20%/year GeneXpertnow has 14 FDA approved human tests Cepheid TB test rated by WHO as better than current gold standard Large program in developing countries In partnership with Gates Foundation Large pipeline of additional human tests under development Revenue from the US Postal Service is now <<5% of revenue IEEE MEMS April 30, 2014 GeneXpert I GeneXpert Infinity

35 IEEE MEMS April 30, 2014 SiTime

36 SiTimeFounding Team Joe Tom Aaron Kurt Markus IEEE MEMS April 30, 2014 Bernard Boser

37 SiTime Founders: Kurt Petersen, Markus Lutz, Tom Kenny, Aaron Partridge, Joe Brown, Bernhard Boser Investors: NEA, Greylock, CampVentures, Bosch Investments: License negotiations with Robert Bosch started June 2003 Series A - $11.5M - Dec 2004 Series B - $12.0M - Mar 2006 Series C - $20.0M - May 2007 several additional rounds since then.... Technology: MEMS resonator to replace the quartz crystal >15B quartz crystal oscillators shipped/year, >$5B/year market First product, SiT8002, shipped in high volume 33 months after start (Sept 2007) IEEE MEMS April 30, 2014

38 SiTime MEMS Resonator IEEE MEMS April 30, 2014 Quad Resonator Single Crystal Silicon Single-point attachment NO package-induced stresses High quality vacuum chamber the resonating element is buried inside the chip vacuum chamber is sealed inside an epi reactor at 1000 C easily achieve 100ppb stability at a fixed temperature Very small component Resonator is 300µm on a side chip is <0.5mm 2

39 MEMS First TM Cross Section First Manufacturing Partner: Jazz Semiconductor 0.4 µm gap MEMS First means that the MEMS is built first, beforeany circuitry and sealed at 1100ºC. Water vapor is eliminated. 10 µm beam thickness SEM photos IEEE MEMS April 30, 2014

40 SiTime Packaging Gold thermosonic wire bonds Standoff Stitch Bonds MEMS Chip Kobe CMOS Chip MEMS die CMOS die Leadframe Insulative Die Attach IEEE MEMS April 30, 2014 Conductive Die Attach

41 SiTimeToday Wide variety of products in full production Jazz/Tower Foundry for MEMS TSMC for CMOS Malaysia for package and test NO MEMS production problems; NO customer returns Focus has shifted to 3MEMS die, MANYCMOS die 43 different products Fabless semiconductor company Cumulative shipments of over 200M units SiTime oscillators are now better than quartz in every way Quality and Reliability Frequency stability over time Temperature and noise performance Cost (>100K devices on 8 wafer with ~97% yield) IEEE MEMS April 30, 2014

42 IEEE MEMS April 30, 2014 Verreon

43 Verreon New technologies and designs for manufacturing MEMS sensors and other devices on GLASS Verreon was designed to be acquired by Qualcomm We hired a MEMS patent expert We hired an operations person to round out the team We documented an extensive IP portfolio Within one year, in April 2010, we were acquired and the team went to work for Qualcomm MEMS (Thank God, because we had no Plan B) In Qualcomm s yearly employee evaluation rankings, Verreon staff all ranked in the top 1/3 at QMT Four still work at Qualcomm All of us have lunch every year on the anniversary of the acquisition IEEE MEMS April 30, 2014

44 Verreon Kurt David KG Phil Nick Justin Ravi IEEE MEMS April 30, 2014

45 IEEE MEMS April 30, 2014 Profusa

46 Profusa Implantable Glucose Sensors over the past 25+ years, >$2B has been spent to develop such sensors totally unsuccessfully 4-5 years ago, NIH stopped funding because nothing was working Profusa has a totally new concept the company started with bio-issues (our Foreign Body Response), instead of engineering issues Profusa has a team of top-notch academic partners NIH has changed its no-fund policy Detector for Profusaand has funded the company with >$6M Today, the top executive staff has Profusa sensors implanted in their bodies Profusahas raised seed and Series A equity totalling ~$4.5M RF IEEE MEMS April 30, 2014

47 ProfusaTeam Bill Ben Natalie Kristen Soya Kurt IEEE MEMS April 30, 2014

48 Two Economic Crashes in Less Than 10 Years Venture Capital has severely retrenched Series A funding of hardware companies has plummeted Entrepreneurs have not gone away, but have also retrenched MUCH scrappier attitudes MUCH more dependence on government money Much more use of angel investors More early partnering with large companies More exploration of funding from/by other countries The funding Bar has also been raised for Angel investments Nearly completely developed products/protos should be available Should have engagements with customers/collaborators IP should be well underway Typical ~$3.0M pre-money valuations; trying to raise ~$ M IEEE MEMS April 30, 2014

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50 Unique US Advantages which are necessary for strong entrepreneurial success POWERFUL entrepreneurial culture and infrastructure A business culture which EMBRACES risk In much of the US, little fear of failure and little stigmatism for failure In every Starbucks in Silicon Valley, start-ups are being discussed Band of Angels alone sees 60 new start-up companies/month POWERFUL entrepreneurial collaborations and partnerships between industry, university, and government MANY US professors and students have started companies Major universities have start-up contests for the students INCREDIBLY effective funding of research and innovationby the US government (DARPA, NSF, NIH, DOE, etc) Sophisticated infrastructures in major US technology cities Start-up incubators, angel investors, technology and business mentors, wafer fabs, legal, technology and business consultants, Venture Capital, etc More importantly, thousands of already successful entrepreneurs are excited to start, mentor, help, and invest in new start-up companies IEEE MEMS April 30, 2014

51 MEMS - where do we go from here? Over the past 30 years, MEMS has grown at a faster rate than the semi industry, increasing from 1% to 3.5% of semi shipments This increase in percentage will continue to grow Within only the last 3-4 years, many MEMS manufacturers have announced cumulative shipments of over 1B devices Now these same manufacturers are shipping >1B/year!! HUGEnew commercialization markets and opportunities for sensors and MEMS have only scratched the surface Ubiquitous Wearables, Consumer, Mobile electronics Ubiquitous Healthcare and medical IoE Ubiquitous Environmental monitoring The entrepreneurial environment in the US and elsewhere is experienced, dynamic, vibrant, incredibly intense, and growing Expect further innovation, further growth, and further successes for MEMS start-ups and for established MEMS companies IEEE MEMS April 30, 2014

52 IEEE MEMS April 30, 2014 Thank You