A sensor refers to a component or module that detects and responds to some type of input from the physical environment. It detects electrical or optical signals and converts them into an electrical signal or a signal that can interface with an electronic circuit. Sensors find applications in various end-use industries like healthcare, industrial, automotive and consumer electronics. The increasing adoption of IoT devices and growing use of sensors in smart cities, homes and industries is expected to fuel demand over the coming years.
Market Opportunity:
Rising adoption of IoT represents one of the major market opportunities for sensors. IoT connects physical devices over the internet and enables them to collect and exchange data. This data is then analysed and used to optimize different operations. Devices and equipment across various sectors are being integrated with sensors to enable connectivity and retrieve operating data. This helps improve performance and efficiency. The proliferation of connected devices will subsequently lead to large-scale deployment of sensors. It is estimated that billions of sensors will be required to support the growing IoT ecosystem over the next decade. This presents a lucrative opportunity for sensor manufacturers to expand their business worldwide. With IoT gaining widespread acceptance, the demand for sensors from different end-use industries is expected to surge significantly.
Porter's Analysis
Threat of new entrants: The threat of new entrants in the sensor market is moderate as significant capital is required to operate in this market and established players have strong brand identity. However, entry barriers are lowering with new technologies.
Bargaining power of buyers: The bargaining power of buyers is high given the fragmented nature of the market with the presence of numerous sensor manufacturers. Buyers can negotiate on price and demand better quality and service.
Bargaining power of suppliers: Sensor manufacturers depend on few raw material suppliers for components like chipsets, cameras etc. Hence, the bargaining power of suppliers is moderate to high as switching costs for manufacturers is high.
Threat of new substitutes: The threat of substitutes is moderate as newer technologies like MEMS and nanotechnology enable the development of alternate sensing solutions.
Competitive rivalry: The competitive rivalry is high due to presence of numerous global and regional players offering similar sensing solutions. Players compete based on pricing, quality, innovation and customer service.
SWOT Analysis
Strength: Sensor technologies enable applications across industries like consumer electronics, healthcare, automotive etc. Sensors offer capabilities like precision, miniaturization and connectivity.
Weakness: High R&D costs involved in developing sophisticated sensors. Dependence on few component suppliers increases business risks.
Opportunity: Growing adoption of IoT and connected devices presents significant opportunities. Demand from emerging applications in AR/VR and robotics will drive future growth.
Threats: Commoditization of basic sensors decreases selling prices and margins. Stricter regulations around data privacy and security pose challenges.
Key Takeaways
The Global Sensor Market Size is expected to witness high growth over the forecast period supported by increasing digitization and automation. The market size is projected to reach US$ 226.91 Billion by 2023.
Regional analysis indicates Asia Pacific will dominate the market during the forecast period. Countries like China, Japan and South Korea are major manufacturing hubs for sensors due to presence of semiconductor foundries and electronics manufacturing clusters. North America and Europe will also grow significantly supported by ongoing infrastructural development projects.
Key players operating in the sensor market are EverZinc, S. Zinc and Numinor Chemical. These players focus on developing advanced sensor solutions through continuous innovation while expanding their global footprint through partnerships.
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