Sales of automotive microelectromechanical system (MEMS) sensors are expected to reach a high-water mark in two years as car-safety mandates come to full maturity and achieve maximum saturation in various parts of the world, according to an Automotive MEMS market tracker report from information and analytics provider IHS.
Global automotive MEMS revenue is forecast to reach $2.8 billion in 2014 via a 9.2 percent increase—a rate of expansion that will prove to be the largest during the period from 2012 through 2017. The climb improves on the anticipated 7.4 percent rise projected for this year, and will be the third-highest annual increase since the industry decline of 2009 following the global recession.
The market for automotive sensors will grow more rapidly this year and the next compared to 2012 as vehicle manufacturers hasten to comply with safety legislation related to electronic stability control (ESC) and tire pressure monitoring systems (TPMS). ESC mandates are maturing in the United States, Europe, Australia, South Korea and Japan; while TPMS is deepening in penetration and saturating in the U.S., Europe, South Korea and China.
During this time, sensors will enjoy increased adoption and hit their peak, which explains the high rate of growth being forecast next year despite fewer vehicles actually being sold. The rosy prospects anticipated for 2014 are in contrast to the muted results of 2012 after lackluster vehicle sales in China and Europe.
One adverse factor that will continue to affect overall industry revenue is the larger-than-normal price erosion that takes place every year for high-value mandated safety components. Inertial sensors for ESC systems, used to prevent or minimize skidding in vehicles, undergo price erosion of up to 6.5 percent yearly, while pricing for tire-gauging TPMS sensors can slide as much as 9 percent in a year’s time. Such rates compare to an average of 4 percent price erosion every year for most automotive applications.
Combo sensors flooding the ESC market
One segment of the automotive sensors space that bears watching is multisensor—or combo—packages. The most significant application here today is the collocation of gyroscopes and accelerometers, which is used to provide inertial inputs to the ESC system. Combo sensors lend significant price advantages and are gaining rapidly in importance, with the value of inertial sensors as a percentage of the entire automotive MEMS sensor market equivalent to approximately 20 percent last year.
The cost issue is paramount for ESC systems, which were once optional features paid for by the customer but now have the same status as a safety belt. The whole supply chain and price structure is experiencing huge pressure, exerted from original equipment manufacturers downward, which partly explains the accelerated development in providing efficient solutions for all components in this system. It also sheds light into the dynamic state of the supply chain given the exit of some significant players, including California-based Systron Donner and, more recently, Silicon Sensing Systems of the United Kingdom.
TPMS market delayed in China
The tire pressure monitoring market is growing fast not only as a result of legislation in mature markets but also because of key growth economies like China. Maintaining correct tire pressure is an aid to safety and is a way to reduce emissions.
TPMS in China is scheduled to be implemented in vehicles by mid-2015, although this appears to be now surrounded by debate, and actual adoption could in reality take longer, IHS believes. Nonetheless, China is still seen as a major future growth area for sensors, due to the generally low penetration rates in domestic vehicles.
Cylinder pressure sensing finally set to expand
For the longer term, a market that will gain significance is that of cylinder pressure sensors (CPS), intended to measure the pressure within a vehicle engine’s combustion chamber for better control of emissions. CPS has been available for use in diesel engines, with one sensor typically needed per cylinder, but the benefits are now also starting to extend to gasoline engines.
The market is currently dominated by Sensata Technologies of Massachusetts, the only company so far to successfully develop a product, which it did together with Beru of Germany. Its piezoresistive pressure sensor, housed in Beru’s glow plug, was introduced first in 2007 and has sold about 3 million units to date, primarily in the Volkswagen Jetta and Golf models in the United States, as well as in Volkswagen Passat cars in Europe.
Daimler has also stated that CPS will feature in all its diesel models moving forward, bolstering demand. IHS believes that CPS shipments will be up by 600 percent by 2017, up from the modest volumes today. As if in answer, German maker Bosch is likely to enter the market with a sensor sometime soon, Japan’s Denso, for its part, has a system that integrates pressure sensors directly into the fuel injectors.