The market for magnetic sensors in the device’s all-important automotive segment is set for a third straight year of double-digit expansion by year-end, but a slowdown is projected ahead as vehicle mandates reach saturation point in developed nations, according to an IHS iSuppli Magnetic Sensor report from information and analytics provider IHS.
Revenue in 2012 for magnetic sensors derived from their use in the key automotive space is forecast to reach $812.2 million, up 11 percent from $731.3 million last year. This year’s expansion will be the third consecutive annual increase out of a projected four running in the double digits; next year’s estimated 10 percent increase will serve as the last.
Growth after 2013 will then moderate to the single digits in the 6 and 7 percent range, with revenue to hit $1.1 billion by 2016.
The magnetic sensor market consists of Hall-effect and magnetoresistive semiconductor ICs that are used to track rotational speed and linear angles in machines and devices, or to detect and process magnetic fields to establish positioning. Aside from the automotive space where their use is most prominent, the sensors are also utilized to a smaller extent in the industrial/military/energy/medical sector, as well as in the data processing industry.
The sensors’ remarkable run of double-digit growth in automotive is helped considerably by their key role in vehicle safety systems demanded by mandates. For instance, electronic stability control (ESC) systems engineered to help prevent vehicle skidding are a potent driving force in consumption, given the use of relatively expensive steering-wheel-angle sensors and at least four wheel-speed sensors. The sensors are also employed in tire-pressure monitoring systems (TPMS), where magnetic switches save battery life. Both ESC and TPMS mandates helped propel the sensors toward rapid growth during the past several years, especially as they were being enforced in the highly developed automotive markets of the United States, Canada, the European Union, Australia, South Korea and Japan.
However, use of the sensors via mandates will reach their saturation point by the 2014-15 time frame—which explains the slowing revenue for the years ahead. The high growth rates will prove unsustainable in the end after being well above the norm for an already extended period of time. Moreover, as sensor prices decline by an average of 5 percent every year, overall revenue is eroded despite continuing growth in sensor shipments.
Other market drivers will emerge to make up for loss
Even so, the industry can look forward to a few growth drivers moving forward. Among them are powertrain-related sensors that help meet carbon emission standards and requirements for reduced power consumption; these sensors are needed as part of the trend toward electrification of all kinds of mechanically driven motors, including switches for the control commutation in brushless motor varieties. Assisting in the market as older applications lose fizz are new applications for the sensors, such as electronic power steering or stop-start systems.
A major source of demand will come from China, projected to overtake Western Europe by 2016 as the second-largest global market, just behind North America. Sales of magnetic sensors in China will reflect the country’s pre-eminent position in the worldwide automotive economy as China sells some 27.4 million vehicles by then—each of which will require ESC and TPMS electronic fitments.
Japan also continues to be an important consumer of the sensors, although on a much smaller scale, given its domestic consumption of just 5 million units last year. The Japanese automotive supply chain is back on track after devastating impacts from the March 2011 earthquake-tsunami disaster, followed by the heavy flooding in Thailand later in October. Nonetheless, production has recovered within a surprisingly short period and new sources for parts have been found, limiting the overall impact of the twin calamities on the country’s automotive industry.
Overall, Hall-type integrated-circuit sensors and switches remain the most prominent device in the automotive segment, accounting for close to nine out of 10 semiconductor magnetic sensors that are sold. Applications for Hall ICs include wheel-speed sensing in anti-lock brake systems; acceleration pedals; electronic throttle valve position; crankshaft sensing; and exhaust gas recirculation. In addition, there are as many as 30 applications for simple switches in the body of the vehicle—Hall-effect sensors dominate in this low-cost switch category.
The most important suppliers of magnetic sensors at present are Allegro MicroSystems of Massachusetts, Infineon Technologies AG of Germany, Micronas of Switzerland, Melexis NV of Belgium, and NXP Semiconductors of the Netherlands.
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