Market competition, coupled with high-volume applications including wearable systems, is driving down the average selling prices (ASPs) of sensors at an accelerated pace, and squeezing supplier profit margins, reported IC Insights. While shipments are rising thanks to the adoption of embedded measurement functions for automated intelligent controls in systems and new high-volume applications such as wearable electronics and the huge potential of the Internet of Things (IoT), sales growth is shrinking due to price erosion, said analysts.
Total revenue growth for the sensor market is forecast to rise seven percent in 2015 to reach $6.1 billion after increasing five percent in 2014, according to IC Insights’ new 2015 O-S-D Report—A Market Analysis and Forecast for Optoelectronics, Sensors/Actuators, and Discretes. However, sensor shipments are expected to increase by 16 percent in 2015 to reach 12.9 billion units after a 13 percent increase in 2014.
The ASPs for all types of semiconductor sensors are forecast to fall by a compound annual growth rate (CAGR) of five percent in the next five years, which is double the rate of decline in the previous five years (2009-2014), according to the report. However, unit volume growth is forecast to rise by a CAGR of 11.4 percent during 2014 to 2019, and reach 19.1 billion sensor shipments worldwide in five years.
Revenue growth is projected to rise by an annual rate of six percent in the forecast period. In comparison, sensor sales grew by a CAGR of 17.1 percent between 2009 and 2014 to reach a new record high of $5.7 billion last year, according to IC Insights.
Semiconductor sensors make up nearly two-thirds of the total sensor/actuator market segment, according to the 2015 O-S-D Report. As shown in Figure 1, acceleration/yaw sensors (i.e., accelerometers and gyroscope devices) remained the largest sensor category, in terms of dollar sales volume, accounting for 26 percent of the total sensor/actuator market.
The acceleration/yaw sensor segment continued to struggle due to price erosion and lower unit growth of one percent in 2014, which resulted in a four percent drop in worldwide sales to $2.4 billion after falling two percent in 2013, according to the report. On the other hand, magnetic-field sensors (including electronic compass chips) rebounded in 2014 with an 11 percent increase in sales to set a new record high of about $1.6 billion after falling one percent in 2013. Pressure sensor sales grew 15 percent in 2014 to a new record high of $1.5 billion after increasing 16 percent in 2013.
About 80 percent of the sensors/actuators market’s sales in 2014 came from semiconductors built with microelectromechanical systems (MEMS) technology—primarily pressure and acceleration/yaw sensors and actuator devices, said IC Insights. MEMS-based product sales grew about five percent to a record high of $7.4 billion in 2014 up from $7.0 billion in 2013. Sensors accounted for 53 percent of MEMS-based semiconductor sales in 2014 ($3.9 billion) while 46 percent of the total ($3.5 billion) came from actuators, such as micro-mirrors for displays and digital projectors, microfluidic devices for inkjet printer nozzles and other applications, radio frequency (RF) MEMS filters, and silicon oscillators, according to the report.
The report also finds that sensors represented 80 percent of the 5.1 billion MEMS-based semiconductors shipped in 2014 (4.1 billion). The remainder of the shipments were actuators (about 1.0 billion).
After dropping more than one percent in 2012 and holding flat in 2013, sales of MEMS-based semiconductors recovered in 2014 with actuators ending a two-year decline, rising seven percent, said IC Insights. Pressure sensors continued its double-digit growth with a 15 percent increase in the year. Sales of MEMS-based sensors and actuators are forecast to grow seven percent this year, reaching $7.9 billion in 2015 and $9.8 billion in 2019, representing a CAGR of 12.0 percent from 2014.