Applications for cellphones, laptops, headsets and media tablets drove revenue growth and shipments of microelectromechanical-system (MEMS) microphones to impressive new levels in 2012, according to information and analytics provider IHS’s IHS iSuppli MEMS & Sensors Special Report.

MEMS microphone revenues last year were up 42% to $582 million, on the way to a projected $1 billion by 2016. Shipments in 2012 totaled 2.05 million units, up 57% from 1.3 billion in 2011. This year, shipments are forecast to climb another 30% to 2.66 billion units, which will be followed by at least three more years of notable double-digit-rate hikes. By 2016, approximately 4.65 billion MEMS microphones will be shipping (see the figure).

Source: IHS iSuppli Research, February 2013

Penetration of MEMS microphones into cellphones—by far the top application—jumped to 69% last year, up from 52% in 2011 and 38% in 2010. Noise suppression is a key factor in this upswing: smartphones are adopting multiple microphones to cancel ambient sounds, which becomes crucial for handsets when carrying out voice commands (for example, Siri for Apple’s iPhones).

Another key trend is the expanding number of microphones used per handset. Most midrange to high-end smartphones employed two microphones in 2010 and 2011. However, since Apple introduced a third device on the back of the iPhone 5 for high-definition video recording, three microphones is fast becoming standard.

Media tablets, expected to become the second-ranked application by 2016, are turning more toward MEMS microphones. The first tablets on the market used electret condenser microphones (ECMs). However, MEMS microphones have begun to appear by the second generation of tablets. New use cases for noise suppression and voice commands could ultimately lead to as many as four microphones in certain future tablets.

Underscoring the groundswell for MEMS microphones, more than half of laptop computers integrated them last year. The same numbers hold true for iPhone 4 and 4S headsets, too.

Price and performance are key factors driving the MEMS microphone market. They’re still much more expensive than ECMs. Nonetheless, the price gap is narrowing, and MEMS versions maintain advantages in reliability, performance, and ease of manufacturing.

On top of that, manufacturers such as Nokia and Apple are willing to pay a significant price premium to differentiate their products in terms of sound quality and acoustics. As a result, they’re turning to MEMS microphones to gain that edge. For instance, Apple used ECMs exclusively for its initial iPad, and for all versions of the iPhone up to the 3GS. Starting with the iPad 2 and iPhone 4, though, the company switched to solely MEMS microphones.

Apple and Samsung were the top MEMS microphone consumers last year—they combined for 54% of all shipped microphones. LG Electronics and Motorola followed them, albeit from a distance.

U.S.-based Knowles Electronics was top supplier of MEMS microphones (it’s the second supplier for the iPhone, and first supplier for the iPad mini). The company continued to dominate even though its share of shipments slipped to 58% in 2012, down from 74% in 2011, due to stiffer competition. Coming in second and third place for suppliers were AAC and Goertek, respectively, both from China. Analog Devices sits in fourth place; it’s the sole supplier of third microphones in the iPhone 5.

These four manufacturers represented nearly 90% of MEMS microphone shipments last year. The remaining approximate 10% of shipments splits among seven other suppliers, including fifth-place STMicroelectronics.

The Chinese market will figure prominently in the industry beyond the supplier side. In 2012 alone, Chinese smartphone and handset manufacturers consumed around 200 million MEMS microphones.

“Microphones continue to be one of the biggest success stories in MEMS, with the rapid growth of the device due to its increasing penetration in the four areas of cellphones, laptops, headsets and media tablets,” says Jérémie Bouchaud, IHS’s director and senior principal analyst for MEMS and sensors. “MEMS microphones also can be found to a lesser extent in applications such as gaming, cameras, televisions and hearing aids, contributing to their broadening use overall, with further utilization coming to set-top boxes this year and to automotive during the next three years.”