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Feature Articles

Global Economic, Manufacturing Trends Lift Machine Vision Markets

by Winn Hardin, Contributing Editor - AIA

But the biggest boosts are in Asia and North America.

The world economy may be struggling, but you wouldn’t know it by looking at the machine vision market.

The recent market numbers to come out of AIA, the global trade association for machine vision, showed that machine vision revenues in the first half of 2014 increased 11% year-over-year, the largest increase since AIA started tracking quarterly data in 2009.

“The machine vision market in North America is having one of its strongest years ever in 2014,” says Alex Shikany, director of market analysis for AIA (Ann Arbor, Michigan). “From what we hear, Asia is having a very strong year as well. Similarly, Europe is also growing, but at a lesser rate due to economic uncertainties and regional tensions. South America is an emerging market and currently drawing a lot of interest from robotics and machine vision companies alike.”

Despite the fast start, double-digit market growth is difficult to maintain on a yearly basis. Shikany notes that industry experts expect to see a flattening of growth in North American machine vision markets in the second half of this year.

Insiders point to several important drivers to regional growth in machine vision markets. One such driver is the strong influence of the highly cyclical semiconductor market, which is currently being offset by the explosion of new applications and industries adopting vision and imaging technology. Another is the effect of reshoring, as automation is making it cost effective to keep manufacturing in developed markets like the U.S. and Europe. Finally, the growing success of U.S.-based international companies in overseas markets is essentially making these companies evangelists for the proliferation of advanced manufacturing technologies such as machine vision.

Semiconductor Softness vs. Expanding Markets

In past years, as much as 50% of the machine vision market was driven by the need to inspect semiconductors and related electronics. Today, as more industries use machine vision technology, semiconductor’s piece of the pie is dwindling, but still critical.

“We see strong growth in Asia, especially in Taiwan and Korea, driven by high-performance manufacturing and end-of-line inspection systems,” says Nate Holmes, product manager for motion control and machine vision at National Instruments (NI, Austin, Texas). “A large part of those systems is driven by high-performance semiconductor processing equipment lines. Much of the demand is driven by large multinational companies with headquarters based in Europe, but most of the development and deployments happen in Asia. NI is heavily involved in advanced technology systems, such as the move from 300-mm to 450-mm wafers in the semiconductor industry. While there may be some leveling, we expect the high-performance manufacturing market to stay pretty strong for us.”

It’s not just a case of rising labor costs leveling the productivity field that is driving China to increase its use of automation, including machine vision. “China is looking at how to go faster, see smaller things, and develop better electronics,” says Greg Hollows, imaging business unit director at Edmund Optics (Barrington, New Jersey). “But what if the market for smartphones, flat panels, and tablets becomes saturated? You need to have demand to drive the electronics market, and these markets move so fast that they become mature very quickly. The good news is that as machine vision technology becomes more powerful, cheaper, and easier to use all at the same time, more industries are figuring out how to use it. It’s opening up new market spaces in life sciences, ITS [intelligent transportation systems], security, and entertainment. Things are good. Things are healthy. Things are promising.”

Dropping Prices Make for Tasty Markets

Central America is one region where the lower costs for machine vision technology are reshaping the industrial landscape. “Factories that didn’t traditionally use machine vision or used rudimentary sensors for the manufacture of appliances, glass bottles, and automotive components are using more machine vision technology,” Holmes notes. “Mexico is a great example of this.”

Non-factory application growth is becoming a major driver behind machine vision market growth. According to Basler AG (Ahrensburg, Germany) — who splits its revenues fairly evenly across Europe, Middle East, Africa, Asia, and the Americas, — the non-factory segment of its business is growing fast.

“We are seeing a lot of growth from medical, entertainment, sports, retail and other miscellaneous applications,” says John Jennings, chief commercial officer of Basler AG. “While we’re still seeing strong demand from the semiconductor industry and solid single-digit growth from the factory floor, we’re seeing higher growth rates from the non-factory segment. Many applications that wouldn’t have considered using a $2,000 camera a few years ago are happy to use an industrial camera that costs a few hundred dollars. As prices drop and systems become easier to use, many applications are beginning to use cameras that weren’t in the past. This proliferation of imaging technology should generate across-the-board growth for years to come.”

Other non-factory applications include asset management in the energy sector, for example. “We call it big analog data,” says Holmes. “Others call it the ‘Internet of Things’. Cameras can help monitor equipment, but they produce a lot of data. The next frontier is how to manage the camera data with automated test, data acquisition (DAQ), and other production data.”

Holmes notes that during this year’s NIWeek, a presenter talked about how his high-content screening process used in drug discovery produces up to 100 terabytes per experiment, and hundreds of thousands of experiments are performed in the search for a new drug. “All this raw data, in addition to results, is required to be saved by law,” Holmes explains. “They’ve had to make custom SCADA (supervisory control and data acquisition) systems to hold and access all that data.”

Holmes continues: “NI plays across a breadth of industries and applications. We’re heavily investing in the interconnectedness of things. It will make a big impact, not just on the machine vision market, but on industry as a whole. It may even shift the way manufacturing devices are built and deployments take place.”

 

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