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A Summary of the 2001 North American Machine Vision Market Study
by Nello Zuech, Study Author - AIA Posted 03/28/2002
Examining the sales of 320 companies selling machine vision products into the North American market, the North American machine vision market only declined 6.8% in terms of revenues and 17.5% in terms of units in 2001 in spite of the terrible economy. Merchant machine vision revenues (all those companies selling vision engine components as well as application-specific machine vision systems) amounted to $1.47B in 2001 based on the sale of 41,685 units.
The AIA annual market study is based on collecting survey data from the North American machine vision vendors. In spite of the poor North American economy, 56% of the respondents indicated that overall business conditions for the machine vision industry in 2001 were fair, good or excellent. 53% of the respondents indicated their business stayed the same or actually increased in 2001.
Several factor which may explain why some vision companies perceived the market was far worse include:
- These figures represent the North American market figures. North American companies that have depended on the semiconductor and electronic industries generally export over 65% or more of their products. Hence, the full impact of declining sales into these markets is not fully reflected in their sales into the North American market.
- Those companies that have defined an OEM-based marketing strategy were especially hard hit. Again, the lion share of production equipment built for the electronic and semiconductor industries is imported. Hence, their sales were especially soft as demand for production machinery declined precipitously given the production over capacity that was realized in the course of 2001.
- Those companies with products addressing the packaging side of the semiconductor industry were especially hard hit. Significantly, this activity has largely migrated offshore so again it did not impact the North American market figures as dramatically.
- The momentum going into 2001 was down and bookings were falling. However, shipments against orders booked in early 2000 converted to billings in early 2001. The result was that many companies actually had better figures the first and second quarters of 2001 than the same quarters in 2000.
- After 9/11, capital spending came to a roaring halt in virtually every industry. Hence, going into 2002 there was a sense of doom and that mood is the most recent one so the one most likely to be remembered.
- In general, there was less decline in the market of the sales of the more expensive application-specific machine vision systems than in the sale of vision engine components, which are much cheaper.
- Interestingly, sales of machine vision systems into the consumable manufacturing markets actually increased in 2001 - pharmaceuticals, personal care products, cosmetics, medical devices, etc. Without the semiconductor and electronic markets, revenues into the other major user industries actually increased 16.1% and units increased 15.9%.
Other industry facts gleaned from the annual market study include:
- The average system price remained about the same as it was in 2000 - $35,169 for a merchant machine vision products, $41,974 if one includes the value added by merchant system integrators and OEMs.
- North American companies lost ground to imports in the North American market only capturing 75.6% of the market versus 82.7% in 2000.
- Semiconductor and electronic industries still accounted for 55.6% of the revenues and 38.3% of the units sold into the North American market.
- 10 industries accounted for 86.4% of the revenues generated in the North American machine vision market.
- North American machine vision companies generated 57.1% of their revenues from export sales.
- The vision processor market declined 10.2% to $244.9M, while unit sales declined 31.2% to 33,917 - reflects decline of sales to OEMS and more sales to end users. The semiconductor and electronic industries only accounted for 23% of the revenues (vs. 58.3% in 2000) and 39% of the units (vs. 65.4% in 2000). 50.7% of all units sold by North American companies were exported.
- The revenues generated for frame grabber sales specifically for machine vision applications were $45.2M accounting for 10,250 machine vision systems.
This year, the suppliers of cameras and lighting for machine vision applications were asked to respond to a questionnaire. The North American market for cameras specifically for machine vision applications was estimated at $100M and for lighting $72.3M. This year's market study includes substantially more details on these markets gleaned from the survey.
The annual market study also examines the sales of machine vision systems in Japan and Europe. The Japanese data is furnished by the Fuji-Keizai group and represents estimates for 2001 rather than actual data. They estimated that the total Japanese market including the value added was $1.8B in 2001, an increase of 5%. The European analysis is conducted by Don Braggins (Machine Vision Consultancy, based in England). His analysis is based on surveys similar to that conducted for the North American analysis. He concluded that the European machine vision market including value added was $1.34B in 2001. The net result was the worldwide machine vision market is estimated to have been $5.8B in 2001, including value added. It is estimated that North American companies captured 49.8% of the world market.
As to what to expect for 2002, while the answer appears bleak based on economic news, 59.6% of the survey respondents felt it will improve and 35.1% indicated it would stay the same. However, even with the North American and world economy turning around, there appears to be excess production capacity in virtually every manufacturing industry. The major user industries (semiconductor and electronic) are still in a slump and in some cases still working off inventories. While most are expecting these industries to turn around in 2002, "when" is the question, and the answer is most likely not until the last two quarters. Military electronics and security related spending will increase in 2002, but these are relatively small markets next to the telecommunications and personal computer markets. Significantly, these two industries are very dynamic and production equipment changes take place with some regularity and such change makes for opportunities for machine vision.
Given that going into 2002 overall machine vision billings are declining on a quarter-to-quarter basis, bookings in the last part of 2001 declined on a quarter-to-quarter basis, and the first quarter is not looking good for an increase in bookings over the last quarter of 2001, the net result is that the North American machine vision market will likely decline in 2002.
Spending is expected to continue, especially in the consumable industries as corporations look to improve productivity and quality. The challenge may be, however, that even in these industries there is pressure to preserve earnings, so although there is some indication of pent up demand for capital equipment being released early in 2002, overall spending will be reined in and is expected to increase less than 2% by many economists. Nevertheless, following 2002 capital spending is expected to rebound so that over the next five years average annual revenue growth of 10.7% should be experienced leading to a North American merchant machine vision market of $2.29B and with value added a market of $2.7B.
The full North American Machine Vision Market Study is available from the Automated Imaging Association. The report includes detailed sections reviewing the market for vision engine components: vision processors, smart cameras, embedded vision computers and frame grabbers. It also includes reviews of the markets for application-specific machine vision systems in the semiconductor, electronic, container, print, food and wood industries as well as the market for more generic application-specific machine vision systems: video-based offline metrology systems, web scanners, 3D systems and X-Ray-based systems. In addition, this year's report examines the market for cameras and lighting in detail. It also reviews the machine markets in Europe and Japan.
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