Government Drives Automotive Electronic Stability Control Systems

Driven by new government mandates, global market revenue for Microelectromechanical System (MEMS) sensors used for automotive Electronic Stability Control (ESC) is set to nearly double from 2006 to 2012, according to iSuppli Corp. Worldwide revenue for MEMS ESC sensors will rise to $715 million in 2012, up from $378 million in 2006.

Global shipments of complete ESC systems are expected to rise to 47.7 million units in 2012, up from 23.1 million in 2007, as presented in the attached figure.

ESC helps cut the number of road injuries and fatalities by correcting for any loss of steering control that can occur while turning sharp corners or making sudden maneuvers.

A U.S. mandate requires all vehicles weighing less than 10,000 pounds to incorporate ESC by 2012, while Europe is set to follow suit with its own law requiring installation on all new vehicles by 2014. In 2012, these two regions will account for nearly nine out of 10 ESC systems produced worldwide.

“Government mandates are reshaping the ESC market, creating new opportunities — and risks — for the supply chain,” said Richard Dixon, senior analyst, MEMS, at iSuppli. “ESC’s transition from an expensive, optional feature to a standard function in the space of just a few years will yield openings for newcomers, and pose threats to established second-tier suppliers. The huge and highly visible growth opportunity in ESC sensors will make for an interesting battleground as prices are driven down by increased competition, and tier-one suppliers gain a wider choice of suppliers.”

Gyroscopes used for turn-rate measurement are leading the ESC MEMS sensor market in terms of revenue due to their high selling prices. The next biggest revenue generators are pressure sensors used to control individual wheel braking and accelerometers that measure lateral slippage.

In 2007, a handful of major suppliers including VTI, Bosch, Denso, Systron Donner Automotive, Silicon Sensing Systems and Sensata accounted for 92 percent of total ESC MEMS sensor revenues. Panasonic will emerge as a major force in 2008, although at least another 10 companies, either in limited production or development, will try to enter this market. According to iSuppli, the barrier to entry is high and only two to three of these companies will play any significant role in reshaping the future supply chain, and those will be companies with deep R&D pockets needed to drive the technological edge and leverage fabrication resources from activities in other applications.

About iSuppli Corporation
iSuppli Corporation is the global leader in technology value chain research and advisory services. iSuppli provides market intelligence services for the EMS, OEM and supplier communities in addition to servicing consumer electronics and media concerns. Services afforded by iSuppli range from electronic component research to device-specific application market forecasts, from teardown analysis to consumer electronics and from display device and systems research to multimedia content and services.