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Electronics Production | April 08, 2009

Global ranking of automotive MEMS suppliers

Despite a massive downturn in car sales and wrenching changes to the global supply chain, Robert Bosch GmbH in 2008 maintained its lead in the worldwide automotive Microelectromechanical Systems (MEMS) market, according to US market research firm iSuppli Corp.
MEMS are tiny machines that perform simple mechanical functions. In the automotive market MEMS are used in multiple applications, including accelerometers that detect impacts and trigger the deployment of airbags, and pressure sensors that monitor tire inflation.

“Although Bosch's automotive MEMS revenue declined by 6.1 percent in 2008, the company actually posted a strong performance for the year, with the company achieving an impressive $160 million business in supplying MEMS pressure sensors,” said Jérémie Bouchaud, principal analyst, MEMS, speaking last week at an iSuppli Webinar event entitled: The Perfect Automotive Storm: How Will Sensor Makers Ride it Out?

Bosch's global automotive MEMS revenue amounted to $429 million in 2008, down from $457 million in 2007, Bouchaud noted. This came largely as a result of a decline in global auto production of 6.6 percent in 2008.
Despite this decline, Bosch managed to outperform the overall global MEMS industry, which posted revenue of $1.6 billion in 2008, down 8.5 percent from $1.8 billion in 2007.

Bouchaud noted that about 80 percent of Bosch's automotive MEMS sales are for internal consumption in its own automotive subsystems. Bosch supplies major automakers throughout the world, particularly in Europe.
Bosch and the other companies that managed to outperform the global MEMS business partly can thank the electronic stability control (ESC) system and Tire Pressure Monitoring Systems (TPMS) markets. While TPMS shipments declined in 2008 partially due to the automotive downturn, the drop would have been much worse if not for current government mandates.

“In the past TPMS has been presented as the new El Dorado of the automotive MEMS market,” said Richard Dixon, senior analyst, MEMS, for iSuppli. “Today TPMS is a U.S. market due to a mandate that required fitment in all cars by the end of 2007. However, the TPMS market will get another impulse in 2012 when the European Union’s requirement for TPMS comes into force. A decisive factor for sensor manufacturers is currently locked in the regulation process, specifically, if so-called indirect TPMS are acceptable in Europe under the new rules. The regulations are released in November this year. ”

Recent indirect TPMS systems consist of a sophisticated algorithm in the engine control unit to model the speed of wheel rotation, cutting the number of sensors from four to one and providing a less-expensive approach to measuring loss of pressure. Direct TPMS solutions employed today in the U.S. use separate MEMS sensors inside each tire to detect pressure levels and are more accurate. Much of the growth in the future market will hinge on whether or indirect systems can meet the accuracy requirements of the European mandates.

The table presents iSuppli’s global ranking of automotive MEMS suppliers in 2008.

iSuppli Table: Global Top-10 Automotive MEMS suppliers (Ranking by Revenue in Millions of U.S. Dollars, Blue=2006, Red=2007, Yellow=2008)





Changes in market dynamics
While the government mandates may help soften the blow of the market downturn, they also are causing a restructuring of the supply chain.

“Government mandates are posing a threat to the established players in the global automotive MEMS market,” Dixon said. “Taking a technology that has only been used in luxury cars in the past and putting it into every car, including those that cost less than $10,000, is a big challenge for the major established players in the MEMS market. We’re already seeing the direct results of this phenomenon—as iSuppli recently reported—with Schneider Electric of France laying off the entire engineering team of its U.S. subsidiary, MEMS maker Systron Donner Automotive.
Markets currently the domain of established players are now seeing increased competition from new, upstart players, according to Dixon.

Another factor impacting the automotive MEMS market is China’s expected ascendance to leadership in the global automotive business.

“China is set to become the world’s No.-1 car maker in 2009, according to iSuppli, which marks a big change in the supply chain that will have an impact on the sensor market,” Bouchaud said.

“Unlike India, China is not a low-cost market for cars and there is a higher sensor content in the cars it makes. This makes it an attractive opportunity for MEMS. In addition, a significant quantity of cars are imports, notably from Volkswagen. The biggest opportunity is for power-train sensors. Unlike other regions, safety is not expected to be the biggest driver in terms of sensor suppliers.”

A major concern for MEMS suppliers operating in China is the prevalence of brand pirating. For example, some fake Bosch sensors have already been detected for sale in the Chinese market.

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