Analyst: Auto stability control still a hot MEMS market

December 9, 2008: With car sales plunging, demand for automotive electronics is dropping as well — except for the key area of electronic stability control (ESC) systems, for which sales are expected to continue to rise in the coming years and generate attractive opportunities for suppliers of microelectromechanical sensors (MEMS) used in these systems, according to iSuppli Corp.

ESC builds on anti-lock braking system (ABS) technology by correcting vehicle direction to help drivers maintain control of their vehicle during rapid steering and counter-steering changes, which may occur during events like sudden lane changes or swerves to avoid obstacles.

“Based on industry input, iSuppli’s new report on ESC systems and components includes groundbreaking research on factors driving the market, and the competitive positions of suppliers of MEMS accelerometers, gyroscopes, and pressure sensors,” said Richard Dixon, senior analyst, MEMS for iSuppli, in a statement. “Among the major findings is that shipments of ESC systems and associated MEMS will continue to rise, despite the current downturn, due to government mandates requiring stability control in the United States and later in Europe. This provides opportunities for at least six players new to the ESC market, either in development or sampling gyroscopes, and likewise four companies developing product for accelerometers. We expect that the new offerings may begin in the truck market before attacking the large automotive OEMs.”

MEMS accelerometers are a key component of ESC systems, measuring lateral slip, i.e., any sideways deviation from a car’s intended trajectory.

In this market, VTI Technologies was the leader in 2007 with a 53% share of industry revenue. VTI supplies all the MEMS accelerometers used by Continental Automotive Systems, the leading supplier of ESC systems. Bosch is in second place, supplying accelerometers for its own systems and to Mobis. It held a 29% share of ESC accelerometer revenue in 2007.

The gyroscope in an ESC system measures a car’s yaw rate. Systron Donner was the market leader with a 44% share of market revenue in 2007. Bosch was second last year with 30% of revenue due to sales of gyroscopes for its own ESC systems.

However, the company to watch in this segment is Panasonic, which held the No. 4 rank for ESC gyroscope revenue in 2007. The company surpassed Silicon Sensing Systems in terms of unit shipments in 2007, giving it the No.-3 ranking based on volume.

“Panasonic is on the rise in the ESC gyroscope market with a robust and inexpensive new gyroscope, and could jump several more places in the next five years,” Dixon said.

The pressure sensor modulates the braking of individual wheels to realize changes in trajectory calculated by the motion sensors of the ESC system. In 2007, Bosch led the market with 54% share of revenue. Sensata, a 2006 spin-off from Texas Instruments Inc., is the second major player with a 34% share of revenue, with Denso a distant third place.

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