The market for automotive microelectromechanical (MEMS) sensors and actuators enjoyed another banner year in 2011, roused by a number of factors including the unforeseen natural disasters in Japan and Thailand last year, according to an IHS iSuppli MEMS report from information and analysis firm IHS.
Automotive MEMS revenue in 2011 amounted to $2.2 billion, up a robust 16 percent from $1.9 billion the previous year. In a remarkable reprise, last year’s growth continued the notable 28 percent expansion that the market saw in 2010 as it accelerated out of the endemic global recession. The growth rates of both years are considered above average even when seen against the 7 to 9 percent expansion in sensor sales that took place regularly before the last recession.
More good news is expected as the space enters a period of projected growth even more rapid than was initially expected, equivalent to a five-year compound annual growth rate of approximately 10 percent starting from 2010. This means that by 2015, the automotive MEMS industry can expect revenue to top the $3 billion mark.
In particular, four devices count as the principal contributors to the majority of automotive MEMS revenue: pressure sensors, accelerometers, gyroscopes and flow sensors. Together, these four devices account for 21 out of 24 identified applications for MEMS in the automotive space, and represent nearly 99 percent of the entire value of the automotive MEMS market.
The major engine of growth for the market continued to be the use of MEMS sensors in government mandated automotive safety measures, such as in electronic stability systems (ESC) and tire-pressure monitoring systems (TPMS). Among the main sensor suppliers with an extensive safety focus, companies like Bosch, Sensata, Analog Devices, VTI and Freescale Semiconductor unofficially report market share gains and year-end results much higher than the 15 percent market growth overall estimate for all automotive sensor companies. Tier 1 entities and other semiconductor companies including Continental, TRW and STMicroelectronics likewise confirm similar growth rates.
Another factor contributing to growth is the increased car production coming out of a reviving automotive industry. Although car production last year was only 3 percent above the extraordinary 25 percent increase of 2010, the increase in the total number of cars produced now exceeding 75 million units per year was enough to drive overall higher levels of inventory for automotive MEMS sensors. Light passenger vehicle sales are the key drivers here.
A third but unexpected factor that impacted automotive MEMS growth was the fallout from two calamities in 2010 the earthquake disaster in Japan during March, and the massive flooding in Thailand later in October. System suppliers appear to have managed their supply chain logistics well through the disasters. However, these same companies after experiencing similar or worse conditions in the black days of the 2009 recesssion have recognized the value of expanding the number of sensor sources. Such multisource supply aggreements unlock opportunities for both new and existing automotive sensors suppliers; compared to the consumer electronics supply chain, automotive supply agreements up to now have been less than dynamic.
Prospects for 2012, and Japan’s Role this Year
Slightly lower revenue growth of approximately 7 percent is anticipated this year, due in part to a reduction of inventory later in the second half of 2012, IHS believes. The cuts in inventory, however, will be offset by an expected increase in car shipments up to 6 percent, along with the increasing impact of safety mandates. An electronic stability control (ESC) system, for instance, can account for a MEMS sensor value per vehicle of about $15.
This year also will see Japan adopt a mandate on ESC within its shores. Japan’s adoption is expected in October, similar to a timeline projected for Europe, in which new models will be fitted with ESC to detect any discrepancy between the driver’s intention and the actual motion of the vehicle with the ESC system automatically intervening if needed to prevent dangerous skidding.
By 2014, all existing vehicles in Japan as well as new, so-called “mini” vehicles there will be outfitted with ESC the latter being a local class of vehicle with dimensions below 3.4 meters (yards) in length with engine capacity of 660cc or less. The ESC mandate in Japan is expected to impact a total of 5 million vehicles in 2012, according to IHS Global Insight.
Learn More > Another Good Year for Automotive MEMS Sensors