Afew years from now the product bearing the catchphrase "Intel Inside" may be a microrefrigerator instead of a microprocessor. Intel, the world's largest chipmaker, has begun investing seriously in microelectromechanical systems, one of the world's fastest growing microelectronics markets.

Intel announced in April it is pursuing a two-track MEMS approach by ratcheting up its R&D efforts and by investing in a select number of startups. Close to a classic no-brainer, Intel's decision makes sense because the company can leverage its expertise in high-yield wafer processing. MEMS manufacturing shares similarities with silicon-based chip processes. It even has an analog to Moore's Law.

Undoubtedly, the mushrooming market for MEMS devices caught the eyes of Intel executives and engineers. Sales of MEMS in certain consumer electronics segments are projected to grow from approximately $200 million in 2000 to more than $1.5 billion in 2005, according to Cahners In-Stat Group. The market research firm says global revenues for all MEMS devices reached $3 billion in 2000. In 2005 that figure will quadruple to $12 billion.

Intel is in a good position to take advantage of its manufacturing prowess, notes Margaret Bourne, an In-Stat senior analyst. In particular, the chipmaker will be able to use its economies of scale to make "the same type of base product...and utilize the device for two different markets." The "microrefrigerator" is actually a microfluidic device that will fit inside a personal computer to reduce heat. The device also can be used in so-called biochips for use in drug discovery and point-of-care blood testing. The device uses pumps and valves to move fluid through channels that have been etched into a semiconductor.

Intel also has invested seed money in several MEMS start-ups. Among them are Umachines and Lightconnect, which are developing MEMS for optical networks; Phone-Or, which is researching RF devices; and Reflectivity, which is developing display technology using MEMS. Intel reportedly has made investments ranging from $1 million to $5 million in the start-ups.

Not surprisingly, Intel isn't the only chipmaker with its eyes on the MEMS market. Texas Instruments, for instance, recently announced a device that links computer networks using laser beams and rotating mirrors instead of cables. In addition, the chipmaker's digital mirror device has proven a hit in the market for small projectors. Says In-Stat's Bourne: "TI has pretty much taken that portable projector market by storm. It's theirs, basically."

Clearly, the days of MEMS as mere pressure sensors or actuators are rapidly changing.