June @ 2016

From Technologies to Markets

Event

MEMS & Sensors for

Smart Buildings

2

MEMS &

Sensors

LED

Compound

Semi.

Imaging Photonics

MedTech

Manufacturing

Advanced

Packaging

Batteries/Power Management

Power

Electronics

FIELDS OF EXPERTISE

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©2016 | www.yole.fr |

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o Consulting and Analysis• Market data & research, marketing analysis• Technology analysis• Strategy consulting• Reverse engineering & costing• Patent analysis

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o Media• i-Micronews.com website• @Micronews e-newsletter• Technology magazines• Communication & webcast services• Events

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3

WORLD POPULATION & HOUSEHOLDS GROWTH

From the « population bomb » to a « household explosion »

4

Cities today represent2% of the world surface

50% of the world population

75% of the consumed energy

80% of the economic activity

80% of the green house emission

Smart City definition from the UNECE (The United Nations Economic Commission for Europe) :

our “Smart City” should be inclusive, resilient, safe, sustainable and “more connected”

SMART CITIES: KEY FACTS

By 2050, the world will be one-third rural (34%) and two-thirds urban (66%), roughly the reverse of the global rural-urban population distribution of the mid-twentieth century.

©2016 | www.yole.fr |

World’s urban and rural populations, 1950-2015 (source: United Nations)

5

ESTIMATED AND PROJECTED POPULATIONS OF THE 10 LARGEST URBAN AGGLOMERATIONS

In 2014, Tokyo was the world’s largest city with an agglomeration of 38 million inhabitants, followed by Delhi with 25 million.

©2016 | www.yole.fr |

source: United Nations, 2014 study

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WORLD POPULATION & HOUSEHOLDS GROWTH

• As the average number of people living in a household is decreasing, the same number of people today live in twice as many homes.

• While world population will grow at 0.61%

over 2000-2100, the number of households will grow at 1.02% (almost twice as much).

0,9

1,65

6,1

11,2

0,11 0,33

2,03

5,60

0

1

2

3

4

5

6

7

8

9

0

2

4

6

8

10

12

1800 1900 2000 2100

Bill

ion

s

1800-2100 World population & Households Evolution

Total population

Households

Number ofpeople/households

7

WHY BUILDINGS HAVE TO BECOME SMART

40% of total energy consumption is for buildings

IBM source

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

Source TERI University

Energy consumption is an

issue for homes and

buildings: 40% of US

energy is for buildings

Heating + Lighning + cooling = 60%

Heating + Lighning + cooling = 51%

Source TERI University

SENSORS & SENSORS SYSTEMS FOR SMART BUILDINGS

© 2017

9

THE HOME MARKET HAS ITS OWN DYNAMICS

Homes & buildings have lifetime far larger than the two most largest sensors market (consumer and cars). Thus, sensors have to prove high reliability at least for commercial buildings (10+ years)

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

Smartphone

ASP $500

Average lifetime:

2 years

Car

ASP $23k

Average Lifetime:

10 years Commercial

building

ASP $1M

Average

Lifetime: 30+ years

House

ASP $200k

Average Lifetime:

60+ years

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WHY BUILDINGS HAVE TO BECOME SMART

• To achieve greener and more secure homes/buildings, a shift in sensing from basic functions (such as light switch on/off)

to more advanced functions is required

• Switch on/off, dimmer, occupancy control, motionless people detection, people localization, people counting, fire detection,reduced false alarm, people behavior analysis.

• The rate of unoccupied offices can be as high as 50% (home office, business trips, medical leaves …), leading to extracost into renting, HVAC … this is something challenging to monitor. Through optimization and control with smartsensors, office costs can be reduced by 35%.

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

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SCOPE OF THE ANALYSIS

etc …

Sensors module

Wireless

connectionSensors

Smartphone, tablet

SCOPE OF THE

ANALYSIS

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

12

FROM AUTOMATED BUILDINGS TO COGNITIVE BUILDINGS …

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

1980 2015 2030 2040

Automated building• « basic » features:

surveillance, HVAC

control …

• Cannot identify energy

waste

Smart building• Start understanding energy

consumption issues

• Only localized datapoints

Cognitive building• Predictive control

• Understand energy and occupancy

• Consider users preferences

• Needs to cope with HUGE amount

of data

Artificial Intelligence will be more & more needed

13

FUTURE CARS & SMART HOMES/BUILDINGS SENSORS NEEDS

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

ENGINE

MANAGEMENT

COMFORT SAFETY

ENERGY

CONTROL

COMFORT SECURITY

10 type of

Sensors

17 type of

sensors

27 type of

sensors

9 type of

sensors

5 type of

sensors

6 type of

sensors

Cars & Smart Homes share the

same trends:1. Energy optimization

2. Passenger/inhabitant comfort

3. Safety & Security

COMFORT SAFETY

ENERGY

CONTROL

COMFORT SECURITY

14

SMART HOME, WE ARE AT THE VERY BEGINNING

• We are at the very beginning of the smart homes/smart buildings adoption curve. Main barriers today are:

• Still a limited consumer demand

• Long device replacement cycles

• Too many standards and devices with interoperability issues and making it difficult for the consumer to set up and control multiple devices.

• But:

• BMS are heavily investing into this market, followed by Gafams and large IT companies.

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

Smart building functions

15

THE SMART HOME/BUILDING FEEDBACK LOOP

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

SENSORS

VOICE

CONTROLSENSOR HUB WIRELESS

YOU

BMS

HOME/BUILDING

BUDGET

CONTROL

+ +

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ANALYZED DEVICES

Sensor systems

Gas sensors (CO2,

CO, VOC, O3 …)

Smoke sensor

Humidity sensor

Smart thermostat

Pressure sensor

Particle sensor

Microphones

Ambient light sensor

Accelerometer

Magnetic sensor

LWIR sensor (PIR, thermopile,

microbolometer …)

CMOS image sensor (VIS, NIR)Houses & residential Buildings Offices

Optimize comfort &

improve securityImprove comfort & productivity, optimize energy

consumption for building owners

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

17

SENSORS MODULES FORECAST

Total modules market

CAGR will be~23%

• Smart modules for smart homes market will grow from 13.3 million units in 2016 to more than

56 millions in 2020 with a ~23% CAGR.

• Market value will be $7,6B in 2022.

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

18

SENSORS FORECAST IN VALUE

In US$M

Gas sensors, VIS sensors, infra red sensors are fueling the growth.

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

Fire detection

IR Motion detection

CO2 sensors

2022

19

SENSORS FORECAST IN UNITS

In units

Microphone marks the beginning of a new era of interaction between people and machines

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

IR Motion detection

Microphones

Fire detection

2022

20

MICRO80GEN2 FROM ULIS

In 2016, Ulis was first to launch Thermal Activity Sensor (TAS) for Smart Building

• In 2013, Ulis and Schneider team in the MIRTIC project to develop a thermal sensor for both imagingand advanced activity sensing based on microbolometer technology:

• 80x80, 34 µm pitch

• 8-14 µm spectral response

• 16.5x16.5x5 mm

• < 5 g

• Up to 50 Hz frame rate

• NETD 100 mK

• Low power consumption: 25 mW

• MTTF > 15 yearsBased on Wafer Level Packaging: each pixel is packaged individually

(Pixel level packaging or « PLP »)

Very important for Home & Buildings applications

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

21

EVOLUTION

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

2016 2022

Strong

increase of

comfort

applications

for private

use388 Munits 980 Munits

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SENSORS MODULES FOR SMART HOMES/BUILDINGS MARKET SHARE

In US$M value

This marketrepresents13.3 milionsunits in 2016

• Amazon with Echo / Honeywell and Nest with smart thermostat, have more than 75% market shares in 2016.

• Other players have smaller shares and there are numerous startups developing their own connected hubs for smart homes.

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

$2.46B

23

THE SMART BUILDINGS ECOSYSTEMBuildings construction Distribution

Energy (electricity, gas) Water

Building applications control systems & meters

Automation & building controls Lifts

Ligthing control

v

HVAC, boilers controlWater control

Security

Telecom & ISP providers « Gafam » IT

Household appliances

Modules and hubs

Sensors / energy harvesters

• Smart home has become a hot topic and players from various industries are now placing their bets from buildings manufacturers to sensors manufacturers.

• As for the car industry where autonomous driving attracts newcomers from the IT, “webcoms” & “gafams” are possible disrupters of the traditional supply chain.

Materials

Standards & software

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

24

ENTERING THE SMART HOMES/BUILDINGS MARKET:

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

SENSORS GATEWAY

MODULES

Temperature

Surveillance

Lighting

Some large companies are also

in the BMS business, involved

in buildings'

HVAC/Lighting/Surveillance

control systems.

AMAZON with Alexa VPA is

the first to have developed a

sensor (microphones)-based

modules. So he is also active in

Modules business.

25

ENTERING THE SMART HOMES/BUILDINGS MARKET:

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

SENSORS GATEWAY

MODULES

Temperature

Surveillance

Lighting

Companies in the modules

development and

manufacturing are the best

positioned to have access to

the smart homes/buildings

(specially HVAC/Lighting

control)

Gafams are

penetrating the

smart

homes/buildings

market through new

interfaces and AI.

Supplying sensors

“only” cannot be

sufficient to have

access to the smart

homes/buildings

market.

Partnerships are

necessary.

26

SUMMARY & CONCLUSIONS

• Smart homes/buildings market is just starting. It is a promising segment of the global IoT market.

• Sensors are critical elements for smart homes/buildings as they will collect data. We estimate the sensors market forsmart homes/buildings to be $1,73B by 2022, with a total number units of 980M.

• Smart homes will also contribute to the growth of voice-activated personal assistants. In 2016, Amazon shipped 4millions Echo systems including 1 million during December 2016.

• However, this smart homes/buildings still have challenges to overcome:• The home & buildings market has a very complex and fragmented supply chain.

• This market will really be a success if the end-customer can have added value and services from its smart living environment

• A strong competition is arising between system integrators and disrupters such as Google,Amazon …

• Artificial Intelligence is becoming key to analyze the huge amounts of data and monetize them. Microsoft, Apple, Google, Facebook,Amazon … have entered the race for the most performing AI.

• A minimum level of standardization is required as hundreds of different platforms are emerging.

• At least, security is probably concern number one to avoid hacking.

©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

27©2017 | www.yole.fr | Sensors for Smart Homes & Buildings

All data issued from our 2017 report “Sensors for Smart Homes & Buildings”

Thank you for your attention