Auto Electronics

iSuppli ranks Bosch #1 in automotive MEMS

Despite a 6.1% decline in revenue, Robert Bosch GmbH remained the leading supplier of automotive Microelectromechanical Systems (MEMS) last year, recording $160 million in MEMS pressure sensor sales, according to iSuppli Corp.

Jérémie Bouchaud, iSuppli principal analyst, MEMS, said Bosch's global automotive MEMS revenue amounted to $429 million in 2008, down from $457 million in 2007. “This came largely as a result of a decline in global auto production of 6.6% in 2008,” Bouchaud noted.

Bosch managed to outperform the overall global MEMS industry, which posted revenue of $1.6 billion in 2008, down 8.5% from $1.8 billion in 2007. Bouchaud noted that about 80% of Bosch's automotive MEMS sales are for internal consumption in its own automotive subsystems. Bosch supplies major automakers throughout the world, particularly in Europe.

Bouchaud said Bosch and other companies that managed to outperform the global MEMS business can thank the electronic stability control (ESC) system and Tire Pressure Monitoring Systems (TPMS) markets. “While TPMS shipments declined in 2008 partially due to the automotive downturn, the drop would have been much worse if not for current government mandates,” he said.

“Today TPMS is a U.S. market due to a mandate that required fitment in all cars by the end of 2007,” said Richard Dixon, iSuppli senior analyst. He added that the TPMS market will get another impulse in 2012 when the European Union’s requirement for TPMS comes into force. “A decisive factor for sensor manufacturers is currently locked in the regulation process, specifically, if so-called indirect TPMS are acceptable in Europe under the new rules. The regulations are released in November this year,” Dixon said.

Recent indirect TPMS systems consist of a sophisticated algorithm in the engine control unit to model the speed of wheel rotation, cutting the number of sensors from four to one and providing a less-expensive approach to measuring loss of pressure. Direct TPMS solutions employed today in the U.S. use separate MEMS sensors inside each tire to detect pressure levels and are more accurate. Much of the growth in the future market will hinge on whether or indirect systems can meet the accuracy requirements of the European mandates.

While the government mandates may help soften the blow of the market downturn, they also are causing a restructuring of the supply chain,” according to Dixon. “Government mandates are posing a threat to the established players in the global automotive MEMS market. Taking a technology that has only been used in luxury cars in the past and putting it into every car, including those that cost less than $10,000, is a big challenge for the major established players in the MEMS market. We’re already seeing the direct results of this phenomenon, with Schneider Electric of France laying off the entire engineering team of its U.S. subsidiary, MEMS maker Systron Donner Automotive.

Another factor impacting the automotive MEMS market is China’s expected ascendance to leadership in the global automotive business. “China is set to become the world’s #1 car maker in 2009, according to iSuppli. “This marks a big change in the supply chain that will have an impact on the sensor market,” Bouchaud said. “Unlike India, China is not a low-cost market for cars and there is a higher sensor content in the cars it makes. This makes it an attractive opportunity for MEMS. In addition, a significant quantity of cars are imports, notably from Volkswagen. The biggest opportunity is for power-train sensors. Unlike other regions, safety is not expected to be the biggest driver in terms of sensor suppliers.”

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