Position Sensor Market 'Positioned' For Recovery

VDC Research Webcast:Position Sensor MarketPosition Sensor Market ‘Positioned’ for Recovery

Global Market Demand Analysis, 9th EditionIndustrial Automation & Control PracticeChris J. Rezendes – Executive Vice PresidentDavid A. B. Laing – Senior Analyst

Recording Available

These slides are from a webcast presented on 03/28/10

A f ll di di i il bl f d l d tA full audio recording is available for download at:

http://www.vdcresearch.com/market_research/industrial_automation/freeresearch.aspx

1 – 2010 VDC Research Group, Inc.

VDC Research Group

Complimentary marketing data on the

Industrial Automation & Control Markets is available on our website at:

www.vdcresearch.com

2 – 2010 VDC Research Group, Inc.Industrial Automation & Control Practice

Today’s Speaker

• VDC Research Group Founded in 1971, continuous, profitable operation for nearly 40 years Focus on a number of embedded and niche network market segments 1,000 clients annually …90% technology suppliers, tech investors

Ch i R d E ti Vi P id t• Chris Rezendes – Executive Vice President 19 years experience in embedded, industrial, defense and other mission critical

and high available technology industries 14 years experience in senior management and leadership positions at a

number of technology solutions and professional services organizationsnumber of technology solutions and professional services organizations 2 years DARPA contracting Chris has advised many of the largest and most respected technology

companies in a number of technology segments worldwide Chris is a graduate of Harvard University Chris is a graduate of Harvard University


Agenda

Introduction

2009 Position Sensor Report: Definition & Segmentation

General Economic Profile and Forecast, for the Position Sensor MarketGeneral Economic Profile and Forecast, for the Position Sensor Market

Product & Technology and Market Trends

C titi O iCompetitive Overview

Closing Remarks

Q & A


Position Sensor Market Remains a Collection of SegmentsM lti l t h i l ti l i l d li ti t d b tMultiple technical, vertical, regional and application segments – and subsegments

Vertical & Application Markets

EA

Regional Markets

Asi

a-Pa

cific

Proximity Sensors Photo Sensors Limit Switches

Am

eric

as EME

Product Type

A

Linear Displacement Sensors

Rotary (Non-Modular) Position Sensors


Position Commercial Value Chain Changing With MarketTh i f th A i k t d th ECM/ODM it b l ti A i ECM/ ODM

• There are many layers d ibl th b t

The rise of the Asia markets, and the ECM/ODM community, may be elevating Asian ECM/ ODMs

Materials & Components and possible paths between position sensor suppliers and the users of their products

• The VDC report tracks suppliers shipments to the FIRST

Materials & Components

Manufacturers of Position Sensors & Limit Switches

customer or level of distribution

• Hard line arrows represent the channels making up the majority of shipments

Vendor Sales Personnel (Field and

Inside)

Manufacturers’Representatives /

Agents

• Dotted lines indicate secondary product channels, but also important communication and feedback channels

• Within the OEM Segment, there Distributors Systems

Integrators

OEMs-----------------------Contract Mfg. g

is a growing contract manufacturing element

End Users/ Enterprise Deployers

g


Position Market Growth Will Require Agility to Manage...P iti i d t ill i t b t th h 2013

10,000 Overall Position Sensor Market

($ M)

Position sensing products will experience a strong, but uneven, through 2013

7,000

8,000

9,000

($ M)

VDC model overall may show ‘smoother’ growth generally, but …

Position sensor

3,000

4,000

5,000

6,000 Position sensor market segment performance will vary widely along a number of dimensions

0

1,000

2,000 Mil/Aero market is expected to continue to be more stable than most despite changes in DoD and international MoD priorities

Total Mkt


…and Exposure to a Number of TechnologiesVi t ll t h i l t i i d APAC h f h l

$1,600

Virtually every technical segment is growing … and APAC share of each also

$1,200

$1,400

$800

$1,000

APAC

EMEA

$400

$600 Americas

$0

$200

Photo Proximity Limit Switch Linear Rotary PositionDisplacement


Overall, Users Expect 2010 to be a Strong Buy YearH t hi t l l t l b 1 3 t f thi h tHowever, we expect shipment levels to lag by 1-3 quarters from this chart

When will your company’s purchase levels of these products return to previous levels?

6.0%

31.9%

3.1%

My Company did not previously purchase these items.

My Company’s purchase level of these items did not decrease.

My Company’s purchase level will not return to the previous level.

2.3%

1.6%

0.0%

2.3%

2nd Half 2012

In 2013

In 2014

In 2015 or Later

8.3%

6.0%

5.2%

3.1%

Early 2011

Mid 2011

Late 2011

1st Half 2012

4.4%

13.5%

12.2%

8.3%

Early 2010

Mid 2010

Late 2010

Early 2011

0% 5% 10% 15% 20% 25% 30% 35%


The Tension Between Cost and Performance?E t d t ti d t ff i d bilit d l tExpected to go away over time as new products offer increased capability and lower cost

New or New or

LegacyPosition Sensing

Products

Products“high end”Products

CostCost

Products

Customer’sFutureSSensorNeeds

Capability / Reliability


One Potential Example: Vision /3D / ImagingS t t h l i h hi i i ith d ti 3X j ti

Are you using or have you considered using different technologies (e.g., machine vision, 3D,

• VDC estimates that the potential market for new t h l i i i t ll t d ith 36%

Sensor users are open to new technologies, such as machine vision, with adoption 3X over rejection

different technologies (e.g., machine vision, 3D, and/or Confocal Chromatic) instead of the linear

displacement sensing products specifically mentioned in this section?

technologies remains virtually untapped with 36% actively considering and 44% others that could be upside targets for expansion

• VDC estimates that the one significant barrier to new technology entrance to the linear

36.4%

15.0%

No, but we are considering their use.

Yes we are using them. displacement is either the cost of the actual product compared to the incumbent or the adoption / learning curve costs involved in implementation

• Response to this question which was posed only

43.9%No, we are not using them and are not yet considering their use.

Response to this question which was posed only to users of linear displacement sensors was optional and the results reflect the 107 (57 End Users and 50 OEM, Int. and Others) that made a selection

4.7%After evaluation, we chose not to use them.

0% 10% 20% 30% 40% 50%


The Persistence of Multiple Technologies?F t li ti th l d t t / t i t idFor most every application there are several product types/categories to consider

Operating Environment

Target Shape Surface

• Other Product Considerations Include:

• Very High Accuracy• Long RangeEnvironment Shape, Surface

andColor

g g• High Resolution• Small Size• Durability / Reliability• Low Power Requirements

TargetMaterial

q• High Speed / RPM Capability• Wireless Connectivity

• QC Functions:• Surface, shape, color

Cost

Surface, shape, color• Process correction

data/feedback

• Debug Functions


Position Sensor Industry: Competitive Overview

Top 3 Proximity Sensor Manufacturers

Top 3 Linear Displacement Sensor Manufacturers

Top 3 Rotary (Non-Modular) Position Sensor Manufacturers

Turck Inc

Manufacturers (W/W $M)

Dr. Johannes

Sensor Manufacturers (W/W $M)

Dr. Johannes Heidenhain

Position Sensor Manufacturers (W/W $M)

Heidenhain GMBH GMBH

iFM Efector Schneider Electric SA Schneider Electric SA

OMRON Electronics, Inc KEYENCE CORPORATION SICK AG

0 500 0 500 0 500


Position Sensor Industry: Competitive Overview

Top 3 Photoelectric Sensor Manufacturers (W/W $M)

Top 3 Limit Switch Manufacturers (W/W $M)

KEYENCE OMRON Electronics, Inc

( )

OMRON Schneider Electric SA

SICK AG Siemens Industrial Division

0 500 0 500


Closing RemarksTh l b l iti k t i till lti billi t it d it ill i

• Virtually all of the vertical markets have declined significantly from the peaks seen in

The global position sensor market is still a multi-billion opportunity, and it will grow again

mid-2008 with the sole exception of the military / aerospace market, which is generally governed by long term contracts

• China and Brazil are seen as having some of the best growing markets in the near term, but expansion generally requires placing manufacturing facilities inside them. There are multiple reasons for this including economic (labor costs), government-imposed trade restrictions, as well as concerns that today’s business partner could become a future competitor

• The military / aero markets – the best performing markets in 2008 and 2009 – are likely to tighten as competing interests for tax revenue will likely be reflected in the kind of stimulus legislation that we are seeing in many regions of the world

• In VDC’s estimate, the most realistic picture for economic recovery was seen when users were asked about % increase or decrease of future (next 3 years) sensor purchases 5% thought that purchases would be within +/- 1% of current levels and 25% predicted a modest

2 – 5% increase Therefore it is best for suppliers to plan for and expect 4% year to year growth from 2011 onward

after a modest recovery of 7 – 8% in 2010


How will VDC coverage help clients stay on top of the market?

Position Sensor Market, 2009 Global Market Demand Analysis, y• VOLUME 1: Proximity and Photoelectric Sensors and Limit Switches

• VOLUME 2: Linear Displacement Sensors

VOLUME 3 R t (N M d l ) P iti S• VOLUME 3: Rotary (Non-Modular) Position Sensors

ACTUAL MARKET SIZE/SUPPLIERSTUDY PUBLICATION DATE

ACTUAL MARKET SIZE/SUPPLIER SHARE

FORECAST MARKET SIZE

Service Year 2010 2008/2009 2010-2013


Q&A Session

Thank You for Attending this VDC WebcastgFor more information about VDC Research coverage of the global markets for industrial networking solutions – including the 2009 Position Sensor Market, Global Market Demand Analysis, or the recently published Touch Screen Sensors y y pand Displays Global Market Demand and Customer Requirements Analysis study, please contact:

Christopher Rezendes – Executive Vice [email protected] | 508.653.9000 x120

David Laing – Senior Analyst/ Program [email protected] | 508.653.9000 x146

Tim Shea – Senior Account [email protected] | 508.653.9000 x132


Business

Position Sensor Market 'Positioned' For Recovery