Analog Devices Harnesses a Wii Hit

This new generation of triaxis accelerometers, which translate three-dimensional real life movement into digital bits, are among the MEMS chips most likely to gain a foothold in consumer devices, say analysts.

"The Wii has probably done more to bring visibility as far as the potential of what accelerometers can do than any other product that I've seen," says Marlene Bourne, president of research firm Bourne Research. "It sparks the imagination about what we can do with these kinds of devices."

The billion-unit cell phone handset market, in which ADI already provides some MEMS chips, is the most obvious candidate for expansion.

Rival MEMS makers are also positioning themselves. Freescale announced a triaxis accelerometer this week that it says is the thinnest available and is specially-designed for integration into portable devices.

And STMicroelectronics(STM Quote) is rumored to be providing a MEMS chip in what could be technology's next smash hit: Apple's(AAPL Quote) iPhone.

ADI's gameplan involves taking its consumer MEMS manufacturing out of its Cambridge, Mass., fabrication facility and outsourcing the job to third-party chip manufacturers. That way, the company can build MEMS for price-sensitive consumer applications at a lower cost and increase its production capacity.

The plan requires ADI to devise a way of making MEMS using standard CMOS manufacturing techniques, instead of the more expensive BiCMOS process it currently uses. The company says it hopes to accomplish this early in its next fiscal year.