The explosion in the adoption of the Internet of Things (IoT) and the industrial internet represents the biggest influence on the components market worldwide. IoT devices are essentially a collection of connected sensor modules, communications chips, and GPS components with cameras increasingly part of the mix.
The past decade has seen radical improvements in the range of phenomena that can be sensed, with innovations driving the cost of sensors down. In 2004, the average cost of sensors was $1.30. By 2020, it is expected to have come down to 38 cents.
The interest in IoT is also now driving more research into sensors that can detect gasses, temperature, humidity, particles and other environmental phenomena, such as noise and vibration. Silicon-based sensors can now measure 3D depth, proximity, pressure, gyroscopic and acoustic phenomena. Advances in electrochemical sensors mean that gas sensors now offer high levels of accuracy at comparatively low cost. At the same time, the electronic components market is highly cost competitive, which generally favours Chinese mass marketers.
Who is likely to succeed in this fast-growing component makers market? The top five companies best placed to make their mark in the component makers sector, according to exclusive theme-based analysis, are Intel, Sunny Optical, TDK, Continental and Aptiv.
GlobalData has scored the world’s top 59 component maker companies on their competitive position in relation to the 10 themes that matter most to their industry. These 59 companies comprise manufacturers of components, including electronic components, imaging sensors, measurement equipment, auto parts, mechanical components and batteries, as well as contract manufacturers.
The top themes disrupting the component makers sector have been defined as the following (with the percentage weighting given to them in brackets):
• Internet of Things (20 per cent)
• Autonomous Vehicles (20 per cent)
• Mobile (10 per cent)
• Batteries (10 per cent)
• China (10 per cent)
• Gaming (5 per cent)
• Robotics (10 per cent)
• Virtual and augmented reality (5 per cent)
• Advanced manufacturing (5 per cent)
• M&A (5 per cent)
Intel has been ranked as a leader in four out of 10 areas – IoT, autonomous vehicles, china and advanced manufacturing – meaning it is ideally positioned to perform well in the future. In 2nd place, with three leadership rankings, was Hong Kong’s Sunny Optical, followed by Japan’s TDK, Germany’s Continental and Aptiv from the US.
The full Top 10 listing, with company country of origin and market capitalisation (in $US) is:
1. Intel – US ($212.6 billion)
2. Sunny Optical – Hong Kong ($11.62 billion)
3. TDK – Japan ($10.2 billion)
4. Continental – Germany ($27.83 billion)
5. Aptiv – US ($20.22 billion)
6. Renesas – Japan ($8.91 billion)
7. Navinfo – China ($29.6 billion)
8. Panasonic – Japan (20.82 billion)
9. Sensata – Netherlands ($7.67 billion)
10. Sony – Japan ($69.49 million)
The GlobalData Thematic Screen ranks companies within a sector on the basis of overall technology leadership in the 10 themes that matter most to their industry, generating a leading indicator of future earnings growth.
Here are five predictions about the future of component makers, focused around the key disruptive industry themes.
1. Camera lens and modules
Makers of miniaturised lenses, lens modules, camera modules and visual cue sensors will benefit from this theme for the foreseeable future. A major move is towards multiple lens cameras with leading smartphone companies typically embedding three lens cameras and expected to introduce up to seven lens cameras to improve ‘zoom’ capabilities. The multiple lens approach will trickle down to cheaper smartphones.
Leaders: Largan, Sunny Optical, Sony, LG Innotek, Samsung Electro-Mechanics, Nikon, Canon.
2. 3D sensors and LiDAR
3D light sensing technology, which bounces light, laser and ultrasound off objects to detect them, position them and motion track them, is a crucial component in a wide swathe of products, including smartphones, VR and AR headsets, autonomous vehicles, drones, robots and ambient retail stores. The next two years will see an intensive drive to both miniaturise and bring down the cost of LiDAR (Light Detection and Ranging). At the other end of the 3D-sensing scale is the arrival of vertical-cavity surface-emitting laser (VCSEL) technology used in the latest iPhones for facial ID and enhanced autofocus. Lumentum and Finisar are the leaders here.
Leaders: Sony, ST Micro, Infineon, Cognex, Continental, Panasonic, Quanergy, Velodyne, Lumentum, Finisar.
3. Machine vision
Machine vision systems are vital for the navigation of robots, pick and place operations and automated inspection. They involve such components as barcode and assembly line ID readers, laser markers, specialist cameras and other inspection equipment. Cognex is the long-established leader in machine vision for industrial automation and assembly line inspection. Like others in the field, it is having to develop ever more advanced algorithms to handle lighting, changes in colour, curvature and field of view when it comes to final assembly verification. At the same time, complex surface textures, image quality, and the variability and deviation between very visually similar parts remain ongoing challenges that demand more nuanced analytical engines to process the real-time data.
Leaders: Cognex, Keyence, Omron, Teledyne.
A biosensor is an analytic device that converts a biological response into an electrical signal. Biosensors can be used in a range of functions from blood pressure glucose testing to medical diagnosis, drug analysis, and finger and retinal ID. By the end of the decade, biosensors could be ubiquitous. They will play a pivotal role in the development of health application businesses at Apple, Google and Amazon, among others. They will enable readouts of the individual’s microbiome and issue alerts and advice. A microbiome monitoring system is currently under development at Japanese luxury toilet maker Toto.
Leaders: Medtronic, Smith’s Medical, ST Micro, NXP, Qualcomm, Apple and Google.
The world is filling up with robots needing specialist precision components such as reduction gears, linear motors and magnetic tracks.
Nearly two million new industrial robots are forecast to be sold in 2020, with a third of those in China, which is aiming to achieve a robot density of 150 robots per 10,000 factory workers by 2020 (it currently stands at just under 100). So the outlook is promising for specialist component vendors. They are led by Japan’s Nabtesco, Harmonic Drive, Keyence and Nippon Ceramic. A major development is expected to be the launch of the Google Cloud Robotic Platform which will give robot developers access to Google AI and eventually enable the remote management of teams of robots.
Leaders: Fanuc, Nabtesco, Harmonic Drive, Keyence, Nippon Ceramic, Nachi Fujikoshi, Cognex, Rockwell Automation.