SEA Sensor Market - An Overview

 By Sriram V

The economies of the Southeast Asian (SEA) countries have been growing steadily at a rate of about 6 percent every year. Large scale industrial development is one of the significant factors that can be attributed to this growth. This has led to a good demand for monitoring instruments, particularly sensors, in major industries such as process industries, automotive, medical, and so on. With the SEA economy booming, the demand for high-quality sensors for process control and monitoring is on the increase. Traditional sensors such as pressure, temperature, level, and flow contribute significantly to the revenues for the sensor industry.

A sensor is a device used to measure any physical quantity such as pressure, temperature, flow, and level and converts it to a signal that can be read by an instrument, and take necessary action based on the inputs received. It forms the crux of all critical processes and has become indispensable in day-to-day life. Sensors are also used in applications such as elevators, computers, mobile phones, and thermometers.

Some of the major industry challenges faced by the SEA sensor market are:

• Pricing pressures hamper growth
• Compliance with communication protocols
• Logistics of products

The need to deliver high performance, low-cost products is a big challenge for the manufactures. The manufacturers have to successfully differentiate their products from others and market them at competitive prices. With the integration of smaller devices to the larger systems, there is an increasing need to ensure accuracy of signal exchange among various devices. Due to the availability of many protocols, integration of devices becomes difficult. This challenge could be overcome by adopting a common protocol based on the requirement of a network. Since many of the participants do not have their manufacturing units in this region, sourcing of products from other geographies poses a big challenge for suppliers. Effective supply chain management system must be setup by the manufacturers to overcome this challenge. Since all the manufacturing companies follow the same methods and principles to manufacture products, successful product differentiation too plays a crucial role to retain the market share.

The three important competitive factors required for this market are:

• Price and size of products
• Performance and reliability
• Delivery time

The end users ask for cost-effective and small size products for easy installation in their plants. There have been significant advancements in bringing down the size of the sensor products. Micro elctro mechanical systems (MEMS) are increasingly being successfully implemented across all major industries. End users in SEA countries are hesitant to implement new technologies and products unless the existing products are defunct and need to be replaced. Hence, manufacturers should strive to manufacture better performing and highly reliable products to convince the end users to adopt new technologies and products. The delivery time taken for the sensors after manufacturing, testing, and packaging is very important. Most of the manufacturers do not have their manufacturing plants in this region. Hence, manufacturers have to be conscious about the time taken for delivery of the final product in the market, either for the OEMs or for export.

The SEA sensor market grew at a rate of 9.8 percent in 2007. While the U.S. and the European markets have reached maturity, the SEA sensor market is witnessing a steady uptrend in growth. This can be primarily attributed to large-scale investments in oil and gas, petrochemical, and refining sectors. High quality process instruments are in good demand from these industries. Oil and gas industry is growing at a rate of 20 percent with investments coming in from many foreign participants. The SEA sensor market is also expected to be driven by factors such as high capital investments and the need to conserve energy.

Chart 1.1 shows the growth pattern of the SEA sensor market from 2005 to 2014.

                                                                                Source: Frost & Sullivan