Expect Sensor Prices to Fall
Sensor tags will drop, but the sensor market will post robust growth through 2017 because of rising demand
Regulations and mandates concerning electric and hybrid vehicles, tire pressure monitoring, electric steering and powertrain mean more sensor use in vehicles.Semiconductor buyers can expect continued price erosion for sensors through 2014, although the price declines will not be as steep as the past two years, according to researcher IC Insights, Scottsdale, Ariz.
Stiff competition has driven down prices, especially for accelerometers and gyroscope sensors typically used in smartphones and other mobile devices.
The average price of a sensor will fall from $0.59 in 2012 to $0.55 in 2013 and then to $0.54 in 2014, according to the researcher.
Price erosion has been steepest for the accelerometer/gyroscopes sensor segment. In 2013 average prices for accelerometer/gyroscopes will fall 9 % to less than $0.90 after declining 10 % in 2012, reports IC Insights.
In 2014 acceleration and gyroscopes prices will fall 3% and then after 2014 "drop 1 to 2 % per year, which is kind of normal,” says Rob Lineback, senior market research analyst for IC Insights.
Prices are falling because of strong competition. “There are a lot of players in the accelerometer sensor segment, and they are fighting hard to maintain market share,” says Lineback. Such sensor suppliers include STMicroelectronics, Bosch Sensortec, Analog Devices and Freescale.
He adds that sensor manufacturers are also "driving down the cost of their sensor designs “so that they can get into new consumer and other product applications."
Market will rise
Despite falling prices, the overall global sensor market will post robust sales growth for the next four years. Sensor revenue will rise 7 % from $5.28 billion in 2012 to $5.68 billion in 2013 and then to $6.53 billion in 2014, Lineback says. By 2017, global sensor revenue is expected to total $9.69 billion.
Strong demand means that the global sensor
market will rise to nearly $10 billion by 2017.
Some sensor manufacturers say growth may be stronger than forecast in 2013. “I wonder if 7% growth may be a bit understated,” says Patrick Long, director of the consumer MEMs business, Maxim Integrated, San Jose, Calif. “That may be too conservative. I think there will be double-digit growth," he says.
Other sensor manufacturers also expect strong sensor sales growth over the next several years.
"We’re expecting that our magnetic sensor IC business will experience moderate to strong single-digit growth this year and next and will outpace the overall semiconductor market," says Katherine Blye, business intelligence analyst for Allegro MicroSystems, Worcester, Mass. "With relatively stable macroeconomic conditions and even pockets of improvement, we are seeing solid demand globally."
"We’re expecting that our magnetic sensor IC business will experience moderate to strong single-digit growth this year and next and will outpace the overall semiconductor market," says Katherine Blye, business intelligence analyst for Allegro MicroSystems, Worcester, Mass.One reason for the strong sales growth in the sensor industry is that sensors are being used in smartphones. “There's just an explosion of sensors being used in smartphones," says Long. "What you're seeing is a push down of higher-end sensors into mid-range phones."
Sensors that had not been previously used in smartphones are now being designed into new models. “For example,” says Long, “this year Samsung's Galaxy S4 not only has a magnetic accelerometer and a gyroscope but also pressure sensors and a humidity sensor for the first time."
Lineback notes that accelerometers and gyroscopes are in “every single smartphone phone. Used together, they improve the navigation capability of a smartphone because they provide more accurate information about location. "With those sensors, a device can do navigation without the GPS signal,” says Lineback.
More sensors in tablets
Media tablets are also using accelerometers and gyroscopes, and PCs are starting to use them, as well. “Intel wants to try to revive the notebook category, and third-generation ultrabooks are being loaded up with sensors," says Lineback.
Automotive is also using more sensors as the electronic content in vehicles increases. Sensors are used in automotive systems including engine control, antilock brakes, suspension systems and tire pressure monitoring among others.
Blye says that government safety and emissions regulations are helping drive overall semiconductor content in vehicles, including sensors. Regulations and mandates concerning electric and hybrid vehicles, tire pressure monitoring, electric steering and powertrain mean more sensor use in vehicles.
She adds that demand for sensors in vehicles is growing in Asia, as well. "China, in particular, will be a key growth region with strong vehicle sales growth projections and increased semiconductor content per vehicle."
Other equipment including televisions, remote controls, home appliances, portable home medical devices and the smart grid will use more sensors and drive the sensor market. "Those systems are getting smarter, and they use a lot of sensors," says Lineback.
Lineback notes that gyroscopes and accelerometers represent about 50 % of the overall sensor market while pressure sensors account for 20 % of sales and magnetic field devices 27 % of the sensor market. However, magnetic field sensors account for 56 % of all unit shipments but have a lower average price than gyroscopes and accelerometers, according to Lineback.
Lineback says that despite strong demand, there should be no issue with sensor supply or lead times for the foreseeable future. “The industry has been able to keep up with demand. Companies are increasing their capacity,” he says.
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