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MEMS devices are a hopeful application to apply micro fabrication technologies. Semiconductor fabrication technologies are often applied in producing MEMS devices. However, in semiconductor fabrication, large environmental impact due to large facilities, energy consuming processes and many solvents, is a big problem. MEMS fabrication may contain the same problems, as far as it uses semiconductor fabrication processes. Thus, applying mechanical fabrication technologies can be an answer to avoid the problem. Mechanical fabrication has a longer history and there have been many efforts to reduce energy consumption and enhance productivity. Also downsizing of manufacturing system is another option to reduce the environmental impact of the manufacturing. Thus, micro mechanical fabrication technologies can satisfy low environmental impact and high productivity simultaneously. In 2007, AIST developed and proposed a downsized and modularized manufacturing system called "on-demand MEMS factory." This paper introduces the concept of the system and compares the productivity and environmental impact with a conventional MEMS fabrication facility. Through the analysis it is concluded that the developed prototype has a great potential as a flexible, environmentally benign and highly efficient manufacturing system for micro products.