Tighter emissions and fuel economy mandates could spur demand for 177 million gas sensors by 2017, according to Strategy Analytics. That’s one of many predictions for solid growth in all types of sensors as a recovering industry adds more electronic control systems.
Sensors will play major roles as electronic systems are used to help improve fuel economy, reduce emissions, and increase driver comfort and satisfaction. The forecast for gas sensors supports a number of others that foresee a strong future for sensors.
Market researchers at iSuppli predicted that shipments of automotive micro-electro-mechanical systems (MEMS) sensors would hit 662.3 million units last year, surpassing the pre-downturn high point of 640 million sensors in 2007. The 2010 level marks a 32% increase from 501.2 million units in 2009.
Looking beyond gas sensors, Strategy Analytics predicted that the automotive sensors market would hit $11.3 billion in 2010, up 15% from 2009. Shipments should exceed 4 billion units in 2017, with revenues of $17.6 billion. That represents a 10% compound annual growth rate, surpassing the 8% prediction for growth in light-vehicle shipments.
The gas-sensor market underscores the forces driving this rapid growth. Tighter government regulations in fuel consumption and emissions will be a key driver. Most gas sensors will measure oxygen in the exhaust systems of gasoline engines, while there will be growing demand for nitrogen oxide (NOx) sensing in the exhaust emissions of diesel and lean-burn engines.
Government mandates will drive further growth in other fields. Electronic stability control and tire pressure monitoring requirements have driven growth in the U.S. Similar mandates will spark further growth. Japan and Korea are also requiring ESC (electronic stability control) and TPMS (tire-press monitoring systems), which should boost revenue by $120 million in those regions alone for the next five years, according to iSuppli.
The impact of government mandates can be huge. A proposed U.S. Department of Transportation mandate for rearview park assist cameras could quadruple projected growth. iSuppli now projects that 71.2 million new cars will employ the sensors between 2011 through 2017. The pre-mandate forecast was for only 19.1 million for the same period.
Analysts note that, when mandates aren’t a factor, growth is often based on continuing reductions in both the size and cost of sensors. “The emphasis is now on improving sensor design and making gas sensors more accessible to areas in the market that find them too costly at present and have little perceived value,” said Kevin Mak, Automotive Electronics Service Analyst at Strategy Analytics.
Lower prices should help spark broader usage of all types of sensors, moving features such as adaptive cruise control into the mainstream. ABI Research predicted that reduced pricing for radar sensors will make ACC (adaptive cruise control) a common feature.
“The highest cost component of ACC has always been the radar sensor. We project that, by 2016, the lower costs will play a big part in increasing volumes and push the global market value up to $30 billion,” said ABI Principal Analyst David Alexander.