Falling prices cut sales growth despite shipment increase

Average Selling Prices (ASPs) for all types of semiconductor sensors are forecast to fall by a CAGR of 5% in the next five years, which is double the rate of decline in the previous five years. Unit volume growth is expected to climb by a strong CAGR of 11.4% in the 2014-2019 timeframe and reach 19.1bn sensor shipments worldwide in five years with revenue growth projected to rise by an annual rate of 6.0%. In comparison, sensor sales grew by a CAGR of 17.1% between 2009 and 2014 to reach a record high of $5.7bn last year, according to analysis found in the 360-page report.

ASP erosion is partly a result of intense competition among a growing number of sensor suppliers pursuing new portable, consumer and IoT applications. Sensor ASPs are also being driven much lower because many new high-volume applications require rock-bottom prices. The fall in prices is not only undermining revenue growth in the highly competitive sensor segment, but it is also now squeezing profit margins among suppliers.

Sensors/actuators market overview

Semiconductor sensors make up nearly two-thirds of the total sensor/actuator market segment. As shown in the image above, acceleration/yaw sensors (i.e. accelerometers and gyroscope devices) remained the largest sensor category, in terms of dollar sales volume, accounting for 26% of the total sensor/actuator market. The acceleration/yaw sensor category continued to struggle due to price erosion and a significant deceleration in unit growth to just 1% in 2014, which resulted in a 4% drop in worldwide sales to $2.4bn after falling 2% in 2013. Magnetic-field sensors (including electronic compass chips) rebounded in 2014 with an 11% increase in sales to set a record high of about $1.6bn after slumping 1% in 2013. Pressure sensor sales remained strong in 2014, growing 15% to a record-high $1.5bn after climbing 16% in 2013.

The forecast in the report shows total sensor sales growing 7% in 2015 to $6.1bn after rising just 5% in 2014. Sensor shipments are projected to climb 16% in 2015 to 12.9bn units after a 13% increase in 2014.

About 80% of the sensors/actuators market’s sales in 2014 came from semiconductors built with MEMS technology, primarily pressure and acceleration/yaw sensors and actuator devices. MEMS-based product sales grew about 5% to a record-high $7.4bn in 2014 from $7.0bn in 2013. Sensors accounted for 53% of MEMS-based semiconductor sales in 2014 ($3.9bn) while 46% of the total ($3.5bn) came from actuators, such as micro-mirrors for displays and digital projectors, microfluidic devices for inkjet printer nozzles and other application, RF MEMS filters and timekeeping silicon oscillators.

In terms of unit volumes, sensors represented 80% of the 5.1bn MEMS-based semiconductors shipped in 2014 (4.1bn) with the remaining 20% being actuators (about 1.0bn).

After dropping slightly more than 1% in 2012 and being flat in 2013, sales of MEMS-based semiconductors recovered in 2014 with actuators ending a two-year decline, rising 7%, and pressure sensors continuing double-digit growth with a 15% increase in the year. Sales of MEMS-based sensors and actuators are forecast to grow 7% in 2015 to $7.9bn and reach $9.8bn in 2019, representing a CAGR of 12.0% from 2014.