Material Handling Market Growth – Reinvigorating the Lifelines of World Economy

Substantiated by recent combinations of developments like Industry 4.0, increasing integration of automation, stringent regulation ensuring workers' safety, availability of cost-effective measures that ensure the merchandise to remain in pristine conditions, thereby guaranteeing customer satisfaction, thus retain customer loyalty, an unprecedented level of internet penetration facilitating international business to customer (B2C) transactions along with domestic transactions – material handling application by industry vertical of warehousing, especially that of eCommerce, has gained unprecedented currency. Moreover, new warehouse and fulfillment centers are being continuously established to cater to the increasing consumer base, which is reinforcing the market share of warehousing. Anticipating such robust growth of eCommerce, the largest online retailer Amazon.com, Inc. (NASDAQ: AMZN) had in 2012 announced the acquisition of Kiva Systems, Inc., a leading innovator of material handling technology for a reported sum of $775 million in cash backed by Bain Capital Ventures and Meakem Becker Venture Capital, which was roughly 300% premium to the company's last private valuation in 2008.

material handling market

The bespoke robots which started fulfilling shipments reportedly brought the "click to ship" cycle down from the 60 to 75 minutes required by humans to just 15 minutes. Later, rechristened as Amazon Robotics, other retailers were offered its automated material handling services which led to a wide opening in the material handling market especially pertaining to eCommerce applications. Complementarily, Fluence Automation, LLC. in August 2018, had announced the acquisition of POST Integrated Solutions (POST-IS) which was a parcel processing and material handling technology company that served the eCommerce markets, among others, facilitating Fluence Automation’s technology offerings along with complementing the former’s efforts in the surging eCommerce automation space, thereby empowering customers to reduce costs and delivery timeframes by increasing production speed in their eCommerce operations, among others.

Fork-Lift Trucks; Other Works Trucks Fitted With Lifting or Handling Equipment, Imports

material handling market

In Thousands of US Dollars

Source: International Trade Centre

Further, in November 2018, Honeywell International Inc (NYSE: HON) had announced the completion of the acquisition of Transnorm which is a global leader in high-performance conveyor solutions, which are employed by diverse end-user markets comprising airport industries, e-commerce fulfillment, and parcel delivery, from IK Investment Partners for approximately €425 million.  Complementing Honeywell Intelligrated business, Transnorm was reported to be a part of Honeywell Safety and Productivity Solutions (SPS), enabling Honeywell’s expansion of its portfolio of warehouse automation solutions. Since the advent of eCommerce and the rate at which it has proliferated around the world, especially due to the spread of COVID 19 (B2C & D2C centric eCommerce are being referred), the market pertaining to material handling also reported quite a few product launches during the past few years.

Later, the COVID 19 crisis severely affected the global manufacturing, metal and mining landscapes with outcomes common to those endured during the past crisis periods starting with second oil shock between 1981-1987, then onto the collapse of Soviet Union during 1991-1994 till commodity price crisis between 2015-16, like price shock, followed by demand shock subsequently the new supply-demand equilibrium. Further according to the estimates by Committee for the Coordination of Statistical Activities (CCSA) the fall in global products and manufacturing output was 9% year-on-year and the value of the merchandise was expected to fall during the second quarter of 2020.  Taking the example of metals and mining as well as manufacturing, which have been contributing to the material handling market growth long before eCommerce existed, the first phase of price shock has already passed and these industries are currently facing the subsequent phases of demand shock and the new supply-demand equilibrium

Iron Ores and Concentrates, Incl. Roasted Iron Pyrites, Exports

material handling market

In Thousands of US Dollars

Source: International Trade Centre

To this end, it is important to note that demand for commodities like zinc, iron ore, and copper remained low corresponding to a lower near-term demand outlook for the same. With falling demand in construction among others, the demand for thermal and metallurgical coals and iron ore are estimated to be severely affected. Further, as countries have been affected during various times and to a varied extent, the supply correction too is expected to vary, as exemplified by the hiatus in the global supply of Uranium, whereby a reduction of the total supply by 50% occurred when Kazakhstan stopped production during May 2020. Nevertheless, few commodities that are driven by end-users like agriculture in the case of potash, will remain resilient, among others. Further with China along with a few other countries which are gradually emerging out of the COVID 19 crisis will witness the manufacturing, metals, and mining resuming operations to full speed. In total, the global mining sector is estimated to remain relatively resilient, partly due to lower energy prices which in turn is expected to reinvigorate the automation industry.

A few notable developments during 2020 that suggest a healthy growth of the market especially pertaining to those of metals and mining industries, among others, during the next few years are as follows:

January – Acquisition

The Canadian leader in the design, manufacture, and adaptation of attachment equipment for heavy machinery, GRYB, had reportedly announced the acquisition of 100% of Winkle Industries and its subsidiaries LiftTech Field Services and PROEN Engineering Solutions. The latter is based out of Alliance, Ohio, USA, and is known as the leading supplier of material handling solutions and engineered mechanical solutions and contract manufacturing services. This strategic decision enables GRYB to enter the US market ad establish itself as the industry leader with unparalleled materials handling product offering, ultimately contributing to the share of mobile cranes which find its applications in mining, demolition construction, among others.

May – Product Launch

Terex Corporation (NYSE: TEX) reportedly launched a new range of products to address the needs of the bulk material handling and product stockpiling applications, called the ProStack range has been designed for key markets and applications aggregates, agriculture, mining, ports and terminals, recycling, and many other bulk material handling industries.

July – Product Launch

Doosan Infracore Europe launched, DL420-7 Stage V wheel loader that reportedly features increased fuel efficiency with higher performance and a conducive operator environment featuring a spacious and ergonomically designed cab along with innovative features facilitating higher productivity, increased controllability, and operator comfort. Further, with a standard bucket capacity of 4.5 cubic meters, it is the largest in its class. Its smooth and responsive hydraulics and auxiliary hydraulic connections make it ideally suitable for material-handling solutions for construction, demolition, mining and quarrying, recycling, and waste management. 

Surface Mount Technology Market Growth – Sustaining Lives

Experience the convenience of savoring instant popcorns, woken up by an alarm, monitoring heart rate while on the run, watching the favorite shows, swiftly googling an unsolvable problem, withdrawing cash from ATMs, monitoring one’s child’s health as well as facilitating elderly care, embarking on hassle-free trips to the safeguarding of national sovereignty, technology has effectively undergone a colossal digital revolution that is driving the demand for consumer electronics which not only have become affordable but also consume less energy. Further due to growing penetration of internet connectivity and advancements in Information and Communication Technology (ICT) as a whole, human residences are not limited to national boundaries but have transcended barriers. These advancements have also propelled the demand for smart homes, industries, connected healthcare, autonomous driving, and smart cities. This has led to the designing and fabrication of powerful yet compact semiconductors that have permeated almost every industry vertical which are inclusive of but not limited to telecommunication, healthcare, consumer electronics, automotive, aerospace, and defense, among others.

Now, it is a well-acknowledged fact that semiconductors are not available to the end-user as standalone components but is constituent of semiconductor surface-mount devices that are a part of the larger end-use products Viz. a cellular phone. Thus, to address the high volume of demand surface mount technology (SMT) is the preferred means for both designing and manufacturing in the semiconductor industry, which is reportedly known for ensuring a faster time-to-market. Besides the consumer demand-side factors mentioned above, demand for SMT  by designers are mainly driven by factors like substantial weight reduction, space-saving, and electrical noise reduction, among others, and demand for SMT by manufacturers is fueled by factors such as reduced board cost,  material handling costs, and a streamlined and well-managed manufacturing process. Fast-forwarding to the present, COVID 19 has brought about a marked shift in the manner in which daily functions used to take place.

Profitmaking institutions, educational entities, and businesses have collectively driven the need for web connectivity and a reliable means of communication which are cellular devices and/or personnel computers. These unprecedented developments have further fueled the need for semiconductors which in turn is anticipated to fuel the growth of the SMT market to stratospheric heights. Another reason which makes COVID 19 a catalyst in the SMT market growth is the demand for ventilators of monumental proportions. Further, the rate of development pertaining to non-contact diagnostics solutions that are capable of safeguarding the health workers from unknowingly contracting infections have also contributed to the growth of the market.

Further, in a world where peace is maintained with the aid of deterrents of peace and its continuous developments, it necessitates national governments to secure military budgets of elephantine proportions. A share of this budget is directed to aerospace, space and defense research in technology where semiconductor surface-mount devices are an integral part, thus making the employment of SMT an inseparable aspect of the entire defense value chain. Moreover, innovations in robotics, quantum computing, nanotechnology, material science, internet of things, biotechnology, autonomous systems, artificial intelligence as well as 3D printing are poised to transform the defense industries in unexampled ways. Within the ambit of defense, a healthy contribution towards the surface mount technology market growth is expected to stem from the need for securitization and militarization of cyberspace. This need is substantiated by the recent ransomware attacks as well as identity thefts through malware. Such is the importance of cybersecurity that from a regional perspective that the EU recently adopted the EU Cybersecurity Act in 2019 which made the European Network and Information Security Agency (ENISA) a permanent government agency with a reported budget allocation of €17 million for 2020 as proposed cybersecurity budget for 2021-27 which is to the tune of €2 billion.

This budget allocation will reportedly cover the bolstering of the EU’s cybersecurity industry, financing state-of-the-art cybersecurity equipment, and infrastructure, safeguarding the digital economy, society, and democracies through polling expertise. Further need for cybersecurity doesn’t stem from the requirement of combating cybercrimes and protecting critical infrastructure only. It is also to safeguard the vital lifelines of the economy by protecting the backbone that comprises electronic communications networks and services and network and information systems, the rationale that has been enshrined in the EU Cybersecurity Act, among others. EU’ s commitment to lead the next generation of cybersecurity and digital technologies is also well pronounced in the act. EU also aspires to develop companies pertaining to cybersecurity to give itself ta competitive advantage in the global market. It also envisions close cooperation with research institutions and universities to minimize its dependence on foreign security and services simultaneously enabling the strengthening of the supply chain within the union. In view of the above, it is anticipated that the global surface mount technology market will experience a meteoric rise. 

Before all foregoing certain recent market developments are being elucidated below:

April 2018 – Expansion

Xiaomi had announced its first plant that was dedicated to local manufacturing of PCBA (Printed Circuit Board Assembly) units in Sriperumbudur, Tamil Nadu, in partnership with Foxconn was operational. In this manner, Xiaomi anticipated its manufacturing operations contribute 50% value if the smartphone.

September 2018 – Investment

Teledyne Advanced Electronic Solutions (AES), a business unit of Teledyne Technologies Incorporated (NYSE: TDY), which caters to Defense, Space and Commercial sectors around the world through its comprehensive portfolio of highly engineered solutions had made a substantial capital assets-investment in its production facility in Lewisburg, Tennessee. Reportedly monikered as a technical refresh, the investment comprised three Surface Mount Technology (SMT) machines, among others.

December 2018 – Facility expansion

REDARC Electronics an advanced electronics manufacturing firm based out of South Australian has officially opened its expanded factory in Adelaide suburb Lonsdale, which was inaugurated by the then Minister for Defense Christopher Pyne and SA Premier Steven Marshall. Facilitated by a federal government Next Generation Manufacturing Investment Program grant which was to the tune of $2.5 million, the expenditure also includes the purchase of a surface mount technology line for mounting electronic components. It also entailed an electromagnetic compatibility chamber and a vibration test lab that enables highly accelerated lifetime testing of products.

Level Transmitter Market Growth – Facilitating Energy Independence

level transmitter market

Rising global population, increasing degree of consumption, rapid pace of industries is leading to increasing demand for energy as is the case with a swift rate of urbanization. A shift in lifestyle and consumption trends ranging from personal care to food and beverage has resulted in increased investments in manufacturing and production expansion. Further, there has been proactive participation of players within the oil and gas industry whereby there has been an upswing in explorations activities. Further, the chemical process industry is one of the most important industries, which is known to buttress the production of fertilizers that aids in the sustenance of an important mainstay of the global economy which is animal husbandry and agriculture. Thus, the proliferation of these industries necessitates the execution of a myriad of industrial measurements to assess a range of fluid levels in diverse conditions, giving rise to the demand for level transmitters consequentially aiding in a conducive environment within the semiconductor industry that is facilitating the development of various kinds of a level transmitter.

Global Annual Petroleum and Other Liquids Production (Thousand Barrels per Day)

level transmitter market

Source: U.S. Energy Information Administration

Before all foregoing, the end-user industry of oil and gas is expected to hold a significant market share during the forecast period. To this end, it should be noted that according to the United Nations (UN) oil constituted a 37% share of primary energy. With estimated phasing off of coal in the future, the oil demand is expected to grow because of increasing demand for fuel and the plethora of variants that find their applications in shipping, petrochemicals, long-distance freight, and aviation. The offshore sector as a source of energy is expected to gain currency due to the availability of equipment and infrastructure along with the expertise to facilitate offshore oil extraction, even though the wide cognizance alternative source of power generation and its consequent implementation has been carried out by certain economies. Also, it is important to note that at current rates of production the global oil companies hold reserves of 13 years of an average. Further, as per the UN, around 25 countries have bonds, which are validated, by the anticipation of extractable reserve ranging over durations that spans across 25 to 100 years. Resultantly, investments in upstream and downstream processes are inevitable.

To put the aforesaid in context a few noteworthy projects which are being listed below:

January 2020: The Ministry of Natural Resources, The Government of China had reportedly announced that it will make its market for oil and gas exploration and production accessible to private and foreign companies.  Further, both domestic and foreign companies that are registered in China and owns net assets worth no less than 300 million yuan (appr. $42.86 million) will be reportedly eligible to obtain oil and gas mining rights.

April 2020: A scheduled commencement of the Rovuma LNG project in Mozambique is expected in 2025. It has been scheduled with revised capital investment for 2020 amounting to $23 billion. The total LNG nameplate capacity of the project is reportedly to be 15.2 mtpa.

May 2020: The construction and operation of the Alaska LNG project were reportedly approved by the U.S. Federal Energy Regulatory Commission (FERC).  Moreover, FERC has reportedly granted the authorization of authorization for liquefication and exportation of liquefied natural gas (LNG). The exportation will be carried out from the North Slope to an export facility in Nikiski, Alaska. Then on to Alaska Gasoline Development Corporation (AGDC), which is an independent, public corporation of the State of Alaska. This project amounts to an estimated $43 billion.

June 2020: It was reported that Gazprom Neft PJSC (MCX: SIBN) has commenced a full-fledged development of major hydrocarbon clusters which has a reported potential resource being at 650 million tons of oil. It spans across the license blocks in Tyumen Oblast and the Khanty-Mansi Autonomous Okrug in Western Siberia.

Therefore, from the rapid pace at which the developments took place in a short period and the manner in which oil and gas exploration has been prioritized by governments, it can be discerned that the end-use industry of oil and gas are poised to creating opportunities for various players of the same market. Thus, arises an undoubted integration of level transmitters, which in turn is expected to drive the level transmitter market in the next few years. To this extent, one key development among a few is the launch of Model 575 by AMETEK Inc. (NYSE: AME) in June 2020, which is reportedly an intrinsically safe level transmitter, facilitating continuous fuel level monitoring in diesel storage tanks, through the Model DDMC meter/controller. With an optional conduit adapter to enable cable protection the transmitter is placed in the liquid.

While the aforesaid is that of a contact type, the category of contactless level transmitters is expected to witness an increased share of the market, because mechanical measuring techniques are prone to malfunction and will require maintenance. Therefore, contactless radar technology is the choice when dealing with LNG/LPG for example. Apropos such scenarios a few recent market developments pertaining to contactless level transmitters are being mentioned below –

December 2019 – Portfolio Expansion

KROHNE had reportedly announced the introduction of four new additions to the OPTIFLEX series of guided radar (TDR) level transmitters, with each of them designed for specific areas of application in a variety of industries. A few of them are OPTIFLEX 3200 which is the trusted choice for applications with hygienic requirements in the pharmaceutical and food & beverage industries; OPTIFLEX 6200 has been designed for minerals & mining industries, metals, chemical, and agri-food industries. Further, OPTIFLEX 7200 has been developed for oil & gas and the chemical and industries for facilitating level and interface measurement of liquids in process and storage applications.

Therefore, the growing importance of level transmitters and the aforesaid portfolio expansion also suggests the growing recognition of RADAR level transmitters and their evident applications in a diverse set of end-use industries. The end-use application exemplified along with other applications as well as the continuous investments in product development is expected to usher in healthy market growth during the next few years.

Machine Condition Monitoring Market Trend – Fostering Seamless Operations

Manufacturing facilities normally integrate the use of machine condition monitoring solutions for operation critical assets. These solutions primarily function by monitoring any of the numbers of parameters related to asset conditions Viz. spent oil, thermography, ultrasound, or vibration. These readings are used to identify possible problems that the parameter is indicative of. For example, vibration analysis can be used to identify common mechanical faults are component wear, loose bearings, shaft misalignment. Nevertheless, the ability of a machine condition monitoring solution to detect a comprehensive range of potential faults is limited because these solutions are only capable of focusing on 1-2 discrete data types. Furthermore, the solutions alone are reportedly incapable of communicating any insights on the urgency of the imminent problem, which has given rise to advanced machine condition monitoring solutions.

Maintenance has emerged as a strategic business function that is increasingly being considered by various industries for reducing both maintenance costs and downtime and increasing asset lifecycles. As opposed to investments in reactive maintenance strategies as well as preventive maintenance strategies, predictive maintenance strategies are being increasingly adopted. The rationale behind this adoption is to streamline maintenance operations by employing data pertaining to asset conditions to predict impending failures thereby schedule maintenance only when it is required. The aforesaid are the leading factors that are expected to drive the machine condition monitoring market during the next few years.

From the perspective of the application, predictive maintenance is now an integral component as well as most sought-after integration across industries that range from aerospace and defense, automotive, construction and mining, energy and power, marine, oil and gas, and others. With the gradual increase in population, increase in demand for energy, national imperatives of reducing energy dependence thereby engaging in more oil and gas exploration, the all-encompassing food and beverage industry which needs even more types of machinery and equipment to sustain itself and reduce spoilage are, among others, expected to embrace the automation industry even more than ever, especially when the current rate of demand and opening up of markets are considered.

The other drivers that are expected to positively influence the market and lead to its subsequent growth are increasing integration of wireless connectivity which is particularly beneficial for those applications that require a non-invasive setup, like those pertaining to food processors, more demand for new and emerging applications, availability of more secure cloud computing platforms facilitating even greater cloud deployment resulting in remote accessibility. Nevertheless, additional expenditure towards retrofitting has the potential to hinder the market growth. The importance of assessment of asset condition has led to quite a few strategic initiatives that range from product launches through partnerships to acquisitions.

November 2018 – Acquisition – Application: Military and defense, process, power generation, and transportation

 The acquisition of a leading provider of machine condition monitoring solutions named Spectro Scientific by AMETEK, Inc. (NYSE: AME) was reportedly completed. Its solutions are intended for critical assets in high-value industrial applications. From consumables and cloud-based software analytics to both lab-based and onsite instrumentation, Spectro is known to provide solutions to customers helping them to determine and monitor the condition of fluids in mission-critical equipment of a variety of industries and defense. Its product portfolio induced spectrometers for wear metal analysis, among others. The latter was reported to join Electronic Instruments Group (EIG) of Ametek, a who is a leader in advanced analytical, calibrating and display instruments, monitoring, testing, with annualized sales of $3.0 billion.

October 2018 – Product Launch – Component – Ultrasound & Vibration Detector

To facilitate sound asset health, it was reportedly announced that a new cloud-connected condition monitoring solution was unveiled to detect, trend, and analyze parameters pertaining to ultrasound and vibration by SDT Ultrasound Solutions. Within the purview of this solution, the SDT340 data collector along with the UAS4.0 analysis software enables users to view the time signal and spectrum pertaining to ultrasound and vibration directly on a large color display. A further data acquisition time can be adjustable from a few seconds up to 10 mins enabling the satisfactory inspection of systems that operates in ultra-low speed. Moreover, it has a focus mode that lets the successful capturing of ultrasound and vibration for measurement as well as facilitating the capturing of long data samples with a resolution of 32k64K, 128K, or 256K.

March – 2019 – Product Launch

SKF USA Inc. had reportedly launched a device SKF Pulse which combines a mobile app with a handheld sensor enabling the user to monitor machine health rotating equipment to predict issues and ensure reliability before the operations are adversely affected. To analyze the captured data, the user is provided with the facility of SKF Pulse Check wherein the captured data could be sent directly by the app, which is then analyzed by experts at the receiving SKF diagnostics center, who subsequently recommends corrective actions. Acceleration, temperature, and velocity, measurement is featured in the built-in sensor intended for rotating equipment, along with Bluetooth communication with iOS mobile devices, among others.

Further, the intelligent machine condition monitoring system offers a value proposition for critical industrial assets, which are located in physically harsh as well as remote environments. These environments by default cause stress to the machinery. Moreover, it becomes an expensive proposition if technical experts are needed to travel to the location of the asset for condition assessment and maintenance need identification. Thus, as the Industrial Internet of Things (IIoT) gains traction, remote condition monitoring and predictive analytics have created ample room for new business models. For instance, in July 2019 Arrow Electronics, Inc (NYSE: ARW) had reportedly joined forces with ADLINK and Microsoft to facilitate faster deployment of IIoT Solutions that comprise a combination of a proprietary platform facilitating machine condition monitoring by ADLINK, software, and hardware support form Arrow Electronics and Microsoft Azure IoT Central. This solution integrates data collection, algorithms related to vibration analysis, tasking of computation, and network connection in single cocompact edge device ADLINK’s MCM-100. It was reported to enable preventive maintenance of machinery, plant equipment, and automation equipment as well as tooling with fast and simple setup and configuration.

Position Sensor Market – Transforming Tomorrows Manufacturing Landscape

The extent of application of position sensors has exponentially widened during the past few years because of the rising integration of automation in a variety of industries around the world. Further due to a shift in the way consumers used to participate in their shopping activities until a few months ago due to COVID 19 it has led to an increased share of eCommerce transactions. Moreover, the social distancing measure necessitated by the global pandemic has made organizations, especially retail space, adopt automation at an unprecedented pace to maintain an adequate level of sanitation thereby contributing to the ongoing global effort of prevention. Additionally, the requirement of energy with concomitant phasing off of coal-based power generation, oil and gas-based power generation is being prioritized by the national governments across the world and is expected to also drive the growth of the position sensor market. Further developments in the market that are anticipated to drive the market growth are being explicated ahead.

position sensor market

Complementarily, with the advent of Industry 4.0 and the resultant digitization, industrial automation is at the forefront that is expected to drive the position sensor market growth at an unexampled level during the next few years. This is fueled by the growing rate of technological developments to which industrial and service robots are being subjected to. Further, a greater deployment of robots in the manufacturing sector to streamline processes and ensure a higher return on investments simultaneously reducing margins of error are also fueling the ever-increasing automation application, which in turn is driving the growth of the market. For instance, ABB (SIX: ABBN, NYSE: ABB, Nasdaq Stockholm: ABB) reportedly launched the third generation of its “Foundry Prime” industrial robotic arm, in June 2018, which can reportedly reduce maintenance cost by up to 60% and energy consumption by 15%. The robot’s high degree of flexibility allows the cleaning of different parts of geometries in the same cell with nil change over time. Besides automation, position sensors are also used in other areas of indusial application, Viz. the oil the gas industry where Control and shut-off valves are used for oil and gas transmission in refineries and petrochemical plants. It is a harsh environment and necessitates measures to guarantee explosion protection. To this extent, Balluff GmbH has reportedly launched a certified position measuring system BTL7-T500, in May 2018 to meet a braid range of application requirements with high reliability and ensure safe operations in explosion hazard areas of Zone 1 and Zone 0. It comprises a wear-free magnetostrictive measuring system in the stainless-steel housing with IP 67 protection that is shock rated to 100 g with the ability to withstand vibration up to 12 g.

While the aforementioned is restricted to back-of-the-house operation, automation has found its way in front of the customer as well. For example, in the case of retail establishment retail robots can spot mistakes on shelf labels creating alerts for the human workforce to fix the error. This not only allows the establishment to assign valuable man-hours to customers facing activities but also to gain a competitive advantage over eCommerce establishment retaining customer loyalty. For example, in March 2018, it was reported that Walmart (NYSE: WMT) had expanded itsshelf-scanning robots to 50 stores across shelf-scanning robots to its 50 stores across four states, in the USA which was achieved in close cooperation with fully autonomous robots' manufacturer, Bossa Nova Robotics, which in June had reportedly announced a $29 million round of funding led by LG Electronics and China Walden Ventures along with WRV Capital, Lucas Venture Group, Intel Capital and Cota Capital to scale up production of its mobile inventory robots for retailers and grocery stores, ultimately raising a total of $70 million. Moreover, as a part of a partnership between SoftBank Robotics America, Inc. and HSBC (SEHK: 5, NYSE: HSBC, LSE: HSBA, Euronext: HSB, BSX: HSBC.BH) which is constituent of  HSBC’s new $131 million “branch of the future” strategy to modernize its retail banking experience, the humanoid social robot Pepper®  was introduced at the HSBC’s iconic Fifth Avenue branch in Manhattan in making it the first financial institution in the retail banking space. Before further applications of this device and developments in the position sensor market are delved into, a quick overview of the nitty-gritty of the position sensor is considered pertinent at this juncture.

Position sensors constitute an input device that is capable of providing a signal which is an electrical output which is prepared and is on standby to be received by equipment that is designated as a receiver either through wireless connectivity or via a connected mode as a response to be the input measurand. The function of position sensors encompasses the measurement of the distance between a reference point and the target location thereby determining the position of the latter resultantly serving its purpose.  Another purpose in which position sensors are known to be used for is that of displacement sensors which are achieved by the addition of a circuitry enabling the retention of information pertaining to that of the previous position from which the updated position is deducted resulting in the difference which is the displacement. Further based on specifications position sensors are categorized as contactless and contact sensors. Sensors that are of the contact type have a limited lifetime due to the abrasion caused by various components incorporated within it. On the contrary, the incorporation of various methods such as optical, magnetic, inductive, and capacitive coupling facilitates the desired function of contactless sensors. Besides another application area that is witnessing a gradual increase in the market share of position sensors is being illuminated below.

The semiconductor industry is witnessing innovation at a breakneck speed and position sensors are not exempt, especially when autonomous vehicles have transitioned from a mere concept on the drawing board to a tangible reality revolutionizing the entire automobile industry and fostering eco-friendly transport solutions. Among others, autonomous vehicles are known to use the inertial measurement unit (IMU) which is essentially a is a centralized system tasked with the monitoring of the location of other sensors that are relative to the vehicle position. It constitutes gyroscopes and accelerometers to calculate the position and motion of the car irrespective of the signal obstruction. To this end, a recent development is germane to the aforesaid, which is the reported launch of the automotive-grade ASM330LHH six-axis inertial sensor for “super-high-resolution motion tracking in advanced vehicle navigation and telematics applications by STMicroelectronics (BIT: STM, Euronext: STM)  that also the needs of advanced automated-driving systems.

Breakfast Cereal a Perfect Recipe for a Healthy Life!

breakfast cereal market

A type of processed food breakfast cereals is generally known for being consumed as the first meal of the day even though they are featured under the all-day-breakfast option offered by numerous food and beverage establishments throughout the world. They are typically consumed with hot or cold milk with or without fruits. They are manufactured from grains Viz. corn, oats, rice, and wheat.  This category of processed food is generally classified as two types which are namely, ready-to-eat cereals such as corn flakes, puffed oats, puffed rice, and shredded wheat, and other types like hot cereals, gluten-free cereals, among others.

Prepared Foods Obtained by the Swelling or Roasting of Cereals or Cereal Products, E.G. Corn Flakes; Cereals (Other Than Maize "Corn") in Grain Form or in the Form of Flakes or Other Worked Grains (Except Flour, Groats and Meal), Pre-Cooked or Otherwise Prepared, N.E.S. (Export)

breakfast cereal market

In Thousands of Dollars

Source: International Trade Centre

The rising trend in consuming low calorie and low carbohydrates and high fiber food, lifestyle changes increasing nutrition considerations of a growing pool of newer generations of customers in emerging economies, growing preference for more transparency in food sourcing and labeling, convenience, changing food habits are a few of the major drivers which are anticipated promote breakfast cereal market growth. Also, region-specific brand localization, marketing initiatives as well as other strategic moves are some investments which market players have been continuously engaged to promote their products and increase their brand value. Organizations are increasingly updating their product formulations and processes to facilitate new product launch thereby catering to the varied customer interests around the world. Nevertheless, the profusion of alternative food products such as yogurt, bread, fruits, eggs, and cereal bars are expected to restrain the growth of the market to a certain extent. A few of the recent market developments that exemplify the increasing engagements of the breakfast cereal market are as follows:

2020 January – Product Launch

Kellogg Co. (NYSE: K) had reportedly launched a newly developed plant-based breakfast cereal, called WK Kellogg By Kids which contains extruded cereal devoid of any sugar but with the natural sweetness beetroot and carrots. Further, the range consists of strawberry hoops, carrot and beetroot balls, and apples stars.

2020 January – Partnership

A partnership was announced between the manufacturer of iconic ready-to-eat cereal brands including Sugar Crisp, Shreddies, Shredded Wheat, Honeycomb and Alpha-Bits, among others called Post Foods Canada Inc. and Tim Hortons® which is Canada's largest restaurant chain operating in the quick-service industry which has evolved to be part of the Canadian fabric to launch two new kinds of cereal create by the former namely Post Timbits® Chocolate Glazed Cereal and Post Timbits® Birthday Cake Cereal.

Final Consumption Expenditure of Households – Restaurants and Hotels , Australia

breakfast cereal market

Source: EUROSTAT

In Millions of Australian Dollars, at current prices

The APAC region primarily due to its diverse preference in tastes, growing availability of disposable income, increasing accessibility to internet resulting in eCommerce, data-driven product placement facilitating increased visibility is expected to substantially contribute to the estimated growth of breakfast cereals market during the next few years. For example, as reported by USDA the retails sector of Thailand expanded by 2.8 %, with a total value of approximately $116 billion. Largely driven by the growing young middle-income population, greater proclivity to spend, and a trend towards urbanization as well as economic growth.  Further with the advent of COVID 19 change in consumption behavior has brought about which has led to rising demand for convenient ready-to-eat meals, healthy food products, and food delivery.

With regards to USDA, the sales of the Philippine food retail sector in 2019 amounted to about $50 billion, with modern retail accounting for half the total. The food retails industry of Malaysia as reported by USDA in June 2020 is expected to grow and is driven by increased spending by consumers. The total sales for this sector reportedly reached $26 billion in 2019. On the other hand, Singapore has a highly developed retail food sector that is reportedly competitive with a total sale that had reportedly exceeded above $6 billion in 2019. Moreover, in light of social distancing measures due to COVID 19, consumers have increasingly prioritized healthy snacking options and ready-to-eat meals recognizing the importance of value-added food as they are increasingly partaking in at-home consumption. Further from the above mentioned it is also pertinent to note that the retail food sector is a determinant that is expected to impact the breakfast cereal market.

It is a known fact that the food and beverage industry also comprise of food and beverage establishments of various formats and tourism (both international and domestic) is one of the key revenue streams. Albeit factors like border shutdowns, travel restrictions, safety concerns associated with travel, the resurgence of the COVID 19 as well as risks of new lockdowns or curfews have influenced consumer confidence ultimately affecting the tourism and hospitality, together these industries are expected to drive the growth of breakfast cereals market in the second half of 2020 because tourism is expected to resume in many destinations in June and July according to the World Tourism Organization (UNWTO). Further, other aspects that are expected to positively impact the breakfast cereal market growth are the planned project expansion of various hospitality chains which is expected to increase the number of breakfast buffets over the coming years. For example, in February 2020, it was announced that  Rosewood Hotel Group and its inspiring brands – Rosewood Hotels & Resorts®, New World Hotels & Resorts™, and KHOS™ reportedly continued with its expansion plans with new openings and signings ( a total of 35 projects ) in the world’s most attractive destinations along with a curated pipeline of projects. Again, during the same month the Indian Hotels Company Limited (BSE: 500850; NSE: INDHOTEL) had reported the opening of 24 hotels that are present in their development pipeline.

Heat Pump Market Outlook

Favorable construction market, growing carbon emissions, growing concerns over polluting consumption practices, helpful government policies, rising consumer spending on clean energy, and variable energy prices are few of the factors that are responsible for driving an anticipated growth of the heat pump market. Furthermore, the rising need for heating requirements for water and space around the world along with increasing commercial accessibility of energy-efficient solutions are expected to augment the growth of the market. Moreover, conducive government policies will also assist in the reinforcement of the market growth, in the next few years. From the perspective of consumption, IEA notes that approximately 20 million households bought heat pumps in 2019.

Despite a share of the above are reversible units there is an unquestionable growth in major heating markets. IEA also notes that despite the emergence of heat pumps as one of the most commonly installed technologies in new residential constructions, only 5% of the heating demand of buildings around the world, whereas fossil fuel-based and conventional electric technologies comprised 3/4th of sales globally in 2019. The market growth is expected to be restrained to a certain degree due to high upfront purchase and installation costs, among others.  With respect to opportunities, policy support and innovations are required to facilitate the removal of market barriers for renovation and enhance energy performance.

heat pumps market

The construction segment of real-estate development is reportedly the main driver resulting in most hear pump technology purchase. Further, with respect to national markets, in the case of the USA, the heat pump sales share for newly constructed buildings is over 40% for single-family dwellings and is about 50% for new multi-family buildings. On the other side of the Atlantic, the market is witnessing a rapid expansion as the year 2018 registered purchase of heat pumps by approx. 1.3 million households. While France, Italy, Spain contributes to the half of the tola sales in the European Union (EU), Estonia, Finland, Norway and Sweden reportedly have the highest penetration rates with more than 25 heat pumps sold per 1 000 households each year, which is conducive for regional heat pump market growth.

The Permeating Popularity of Various Heat Pump Technology

The air source heat pumps are rapidly gaining currency and are becoming more widespread during the recent years and now occupy the largest share of global sales due to factors like improved standards of construction, favorable policy environment and rising demand for air-conditions. On the other hand, the sales of water source heat pumps, especially those intended for production for hot water, have tripled majorly contributed by sales in China. The increase in purchases was facilitated by subsidies made available through the Coal-to-Electricity program of northern China, which incentivized the replacement of coal-fired boilers with air-to-water heat pumps. The second-largest market was Japan in terms of sales for the same, during 2018 which was to the tune of 480000. Besides despite experiencing a lower sales volume, Europe experienced a steep rise in sales of heat pump water heaters which numbered 155000 units in 2018 from approx. 30000 units in 2010. On the contrary, wit annual sales of around 400000, ground-source heat pumps are relatively less common around the world, with Sweden accounting for the highest number of per capita installations globally. In view of the above, it can be stated with certainty that the energy and power industry is poised to witness a surge in heat pump technology demand irrespective of their types.

Policy Regulations and Government Programs Open up Opportunities for Future Growth

The labeling of products with a seasonal performance factor for heating and minimum energy performance standards for heat pumps has been mandated by the USA, thereby paving a way for such performance-based incentivizing system to encourage the use of heat pumps in conjunction with local PV production in a self-supply mode which in turn is anticipated to boost performance during the coming years and contribute to the reduction of electricity consumption from the public grid. Besides, in the EU and China, heat pumps’ energy source is categorized as renewable heat which makes incentives Viz. tax rebates accessible. On the other hand, subsidies made available under the aegis of the Air Pollution Prevention and Control Action Plan are aiding in the reduction of upfront installation and equipment costs in China. Moreover, the subsidies for air-source heat pumps across various Chinese provinces were made available by the Chinese Ministry of Environmental Protection as evidenced by the reported RMB24 000 to RMB 29 000 per household in Beijing, Shanxi, and Tianjin in February 2017. EIA also notes that 30% of the initial investment cost incurred towards ground-source heat pumps is covered by the state in the case of both the USA and China. The overall favorable outlook has mobilized developments in 2018 within the heat pump market, which are as follows:

January – Joint Venture

The leading manufacturer of technologically advanced ductless and variable refrigerant flow (VRF) heating and air conditioning systems Mitsubishi Electric Corporation (TOKYO: 6503) and a world-leading developer of comfortable, sustainable and efficient environments Ingersoll-Rand plc (NYSE: IR) had reportedly announced an agreement between them to establish a 50 %-50 % joint venture (JV) pending a global antitrust review.  The JV was agreed upon to facilitate marketing and sales as well as distribution VRF and ductless heating and air systems which would be reportedly highly efficient, mini-split, multi-split, variable-speed and VRF air conditioners and heat pumps intended for commercial and light commercial as well as residential applications

April – Acquisition

The 3rd largest supplier to heat pump market of the Nordic region with annual sales registering around 68 million euros,  Danfoss Värmepumpar AB, known under the brand name 'Thermia', based in Arvika, Sweden was reportedly acquired by The Stiebel Eltron Group for an undisclosed amount, enabling the latter to focus on the heating and cooling with renewable energy, consequently develop business in other markets which were then dominated by ground/water heat pumps.

Nevertheless, albeit such promising potential for the market global pandemic and its resultant effects like lockdown measures leading both supply-side and demand-side shocks is expected to create a dent in the growth prospects of the market.

 

3d Printing Revolution

3D printing is an action of the process of making three dimensional solid objects from a digital file using a 3D printer. Increasing adoption of 3D printing technologies in industries such as consumer electronics, healthcare, and automotive among others aiming to reduce costs is expected to drive the growth of the market for 3D printing during the forecast period. In addition, the market also witnesses increasing investment by major market players in research and development which is further fuel the growth of the market.

3D printing market

By Component Insight

Based on the component, the 3D printing market has been segmented into hardware, software, services, and material. The software segment is holding a significant share in the market as it is considered as an essential tool for the designing and manufacturing of 3D printed models. Software not only the users to create and prepare the model for printing, but also allow for pre-printing repair and provide control over the production process. The demand for software for 3D printing is estimated to grow during the forecast period owing to the rising penetration of 3D printing technology for residential and commercial applications. Furthermore, rapid product launches and the introduction of innovative software to improve the efficiency and performance of 3D printers are also estimated to drive the 3D printing software market in the coming years. The software segment is further segmented based on CAD tools, slicers, and others. The rapid rise in the demand for 3D printing in multiple ends user industries such as automotive, aerospace and defence, electronics and more, has heavily impacted the demand for paid CAD software as these industries require technical and precise drawings for prototyping, tooling, and parts manufacturing. Furthermore, the rising availability of newer software and advanced features in this domain are expected to strengthen the growth of the 3D printing CAD tools market. However, the availability of free software and piracy concerns in the software domain is projected to hinder the market potential of this software in the coming years. A slicer software cuts the 3D model file that is needed to be printed into individual layers and generates machine code for the 3D printer to print the final design, thus making them a crucial part of 3D printing. This software is available in both free and paid versions, with the paid ones providing a string of additional features to aid pro-level designing.

By Technology Insight

By technology, the 3D printing market is segmented into Vat Polymerization, Material Extrusion, Material Jetting, Binder Jetting, Direct Energy Deposition, Powder Bed Fusion, and Sheet Lamination. The demand for vat polymerization technology is projected to witness exponential growth over the forecast period on account of increasing demand due to its high accuracy and smooth finish, enabling its high use in precision and specific industries such as healthcare, aerospace, and semiconductor industry. Vat photopolymerization is one of the earliest and most demanded 3d printing technology available, and the demand for this technology is further projected to improve in the coming years. The technology further comprises of stereolithography, digital light processing, and continuous digital light processing technologies. Besides, vat polymerization is further segmented based on stereolithography, digital light processing, and continuous digital light processing. Stereolithography (SLA) 3D printing technology is projected to witness good growth over the forecast period owing to the increasing demand for residential and commercial 3D printers all around the world. Furthermore, the 3D printing market trend also witnesses the rapid technological advancements in the industry which are further projected to shoot the demand for this technology in the coming years. For example, Formlabs, a US-based SLA 3D printer manufacturer, introduced the Form 3 and Form 3L to its professional 3D printer lineup. Additionally, multiple market players are also partnering up and expanding their portfolio in this technology to improve their share in the market, thus resulting in further growth during the forecast period. For instance, in September 2019, Nexa3D, a California based SLA 3D printer leading manufacturer collaborate with TWeatherford Inc., an additive manufacturing solutions provider to expand its reseller network in the mid-west. Furthermore, the company also partnered with Creat3D to expand its market reach to the United Kingdom in August 2019.

Furthermore, Powder bed fusion is a process where an energy source like laser or electron beam fuses with an atomized powder to create the layers of a 3D object. Among the various types of powder bed fusion technologies, industries like aerospace, automotive and transportation are utilizing these technologies as per their industry requirement and accuracy level. Amongst all, Select Laser Sintering (SLS) holds a majority share in the powder bed fusion technology as aerospace and automotive players are increasingly utilizing it to produce functional prototypes and complex parts at a high level of accuracy. The market for Direct Metal laser Sintering is poised to grow at the fastest rate during the forecast period on account of its growing utilization across industries like medical, satellite, and others.

Recent Update

February 2019, Xerox has acquired liquid metal 3D printing company Vader Systems to leverage its liquid 3D printing technology to produce parts at fast speed.

September 2019, Digital Metal announced the launch of its two new superalloys for its DM P2500 binder jetting platform, which are considered as the revolutionizing products.

December 2018, EnvisionTEC, a global 3d printer and material provider announced the launch of the company’s new cDLM systems with the name Envision One cDLM.

July 2018, the Lockheed Martin Space embraced a 3-D printed titanium dome for satellite fuel tanks that carry fuel on board satellites.

November 2018, HP announced the expansion of its installations of its HP Multi Jet Fusion 3D printing solutions aiming to meet the growing demand for production-grade 3D manufactured parts from various end-user industries such as manufacturing, transportation, medical and consumer.

April 2018, Prodways technologies has launched a wide range of 3D printers in the United States that are based on its latest PA612-GB 3800 laser sintering powder and high-temperature versions of its latest and advance P series of  Selective laser Sintering 3D printer.

December 2018, Rocket Lab has launched First NASA Mission with 3D-printed Rocket that whose engine is developed using electron beam melting where metal powder or wire is placed under a vacuum and fused by heat from an electron beam, enabling them to create unique and relatively inexpensive engines.

ABOUT THE AUTHOR:

Rajat Sudan is a Market Research Analyst at Knowledge Sourcing Intelligence, working on estimates and global/regional specific reports on multiple industries ranging from healthcare to automotive, with a special knack for semiconductor. With the addition of his formal education in Economics, Commerce, and Finance, he is able to provide more light on the macro aspects of the story. To read more articles by him, and for more information regarding multiple global markets,visit www.knowledge-sourcing.com.

Image Sensors Market Trend – Effectuating a Spectrum Wide Illumination

image sensor market

The image sensors market is expected to witness healthy growth during the next few years because it is integral to a myriad of applications that ranges from automotive, consumer electronics, healthcare, military and defense, transportation, among others. The use of image sensors is further reinforced by continuous R&D investments made by both public and private players which are resulting in an energy-friendly, reasonable, and relatively miniaturized version of image sensors. These improvements are making image sensors suitable for a wider industrial application. Moreover, the continuously changing landscape of consumer electronic goods like mobile phones, handheld devices, cameras, among others is one of the major driving forces anticipated to influence an upward trajectory of image sensors market.

Electronic Integrated Circuits; Parts Thereof (Exports)

image sensor market

In Thousands of US$

Source: International Trade Centre

Regarding consumer electronics, the semiconductor industry has reportedly witnessed certain recent market developments by key players establishing the very indispensability of image sensors to consumer electronics. To substantiate the aforesaid, the key developments were:

2018 – Product Launches

July

Teledyne UK Limited (LSE: E2V), through its Teledyne e2v, which is a provider of imaging solutions had reportedly announced the launch of Emerald 67 megapixel, the newest addition to its Emerald CMOS image sensor family. The salient feature of this relatively new sensor is a high resolution with the smallest global shutter pixel (2.5 µm). This feature, which was one-of-a-kind during the launch, facilitates the capture of more objects in a single high-resolution shot making it suitable for high-end automated optical inspection, microscopy, and surveillance. It also provides ultra-low noise performance with high sensitivity of 70% QE enabling the precise identification of defect and particle. Additionally, being ultra-high-speed, thereby the production line throughput is significantly enhanced.

October

Samsung Electronics Co., Ltd. (B3: SMSNN, FWB: SSU, SSUN, KRX: 005930, 005935, LSE: SMSN, SMSD) [SAMSUNG] had reportedly announced the launch of 48-megapixel Samsung ISOCELL Bright GM1 and the 32-megapixel ISOCELL Bright GD1 which are essentially two comparatively new 0.8-micrometer (micron) pixel image sensors. The rationale for the development and the subsequent launch of these sensors is the objective to provide smartphone vendors with greater design flexibility enabling the accommodation of more sensors in the same space, which is the case with the trend of slim, bezel-less smartphones. These sensors are based on Samsung's pixel isolation technology called ISOCELL Plus. This technology, which was launched in June during the same year, reportedly optimizes the performance for smaller-dimension pixels, enabling the integration of the same into premium camera modules. Additionally, this technology is made available incorporated with the organization’s tetra cell technology that facilitates the merging of four pixels into one enabling the enhancement of overall light sensitivity.

Besides, the end-use industry such as consumer electronics, the defense industry is expected to hold a significant share of the image sensor market. One aspect that satisfactorily substantiates the aforesaid to a certain extent is the increase in the military budget by 3.6% from 2018 to 2019 according to the Stockholm International Peace Research Institute (SIPRI).

Direct Budget Plan of Research, Dev, Test & Eval

image sensor market

In millions of US$

Source: Department of Defense, USA

Further, in 2019, the global military expenditures amounted to US$1917 billion representing 2.2% of GDP which in turn reportedly corresponds to approximately US$249 per person. During the same year, the United States was the leading country in global military spending with a share of 38% of the total expenditure. Further, the military spending is in part substantiated by the National Defense Strategy which was issued by the Department of Defense (DOD), Government of United States in 2018, that articulated the necessity to stand by its properties of modernization. Moreover, the increasing technological advancements of Russia and China, an observation noted by the DOD officials, makes it a geopolitical strategic imperative of the USA to reexamine its R&D investments. Thus in 2018, it was reported that U.S. Air Force researchers at Air Force Research Laboratory at Wright-Patterson Air Force Base, Ohio, have been working with Defense Engineering Corporation, Inc (DEC). in Beavercreek, Ohio; Lockheed Martin Corporation’s (NYSE: LMT) Lockheed Martin Space Systems in Louisville, Colorado and optX imaging systems, Lorton, Virginia, on the R&D of Electro-Optical and Radio Frequency Sensors (RADERS) project with the rationale of developing new enabling technologies for communications, imaging, and signals intelligence (SIGINT) applications, information processing, next-generation electro-optical (EO) and radio-frequency (RF) sensors.

The amount of RADERS contract awarded per entity was as follows, with DEC being awarded US $3.9 million during August; Lockheed Martin Space Systems being awarded US$192,009 during the same month, preceded by optX Imaging Systems being awarded US $748,315 during May. Another such development pertaining to the non-visible spectrum of image sensors related to defense was the announcement by  ManTech International Corporation (NASDAQ: MANT)  mission-focused technology solutions and services provider for U.S defense, intelligence community and federal civilian agencies, of a  reported award of US $45 million 4-year-award for the Naval Surface Warfare Center (NSWC) Crane for the technical advancement of sensors which is employed by the Naval Air Systems Command (NAVAIR) in Hawkeye aircraft (PMA-231), in August 2018. It is important to note that PMA-231 Hawkeye aircraft provides surveillance, identification, and tracking of threat aircraft and cruise missile systems, thereby ensure situational awareness by employing integrated, automated sensors. ManTech has been tasked with the enhancement of sensor performance in the rapid-fire sprint as well as increasing the speed of crucial intelligence delivery. This will be executed by capitalizing on the organization’s pan DOD experience with sensor integration and support along with engineering and development techniques pertaining to agile software, resulting in more efficiency and flexibility for integrating emerging technologies, among others.

Thus, in view of the driving factors, market developments pertaining to the end-use market of consumer electronics and the sheer quantum of investments made by national defense industry towards effectuating practical advancements of image sensors, it can be stated with certitude that the market for image sensors is poised to witness a stratospheric growth during the next few years. Besides the aforementioned factors, aspects such as the adoption of IoT in almost every sector, Advanced Driver Assistance Systems (ADAS), government regulations mandating the implementation of new safety technologies in the automotive sector within the next few years, among others are also anticipated to reinforce the growth of the market.

A Widening Demand-Supply Gap in the Economics of Ventilator

A ventilator is a medical device that aids an individual to breathe when the lungs are unable to perform their designed tasks itself. There are different types of ventilators available that are utilized based on the gravity of the patient’s conditions. For instance – non-invasive ventilators are primarily used when the patients tend to suffer acute pulmonary malfunction while the invasive techniques are the recommended choice for the healthcare personnel in case of a serious patient condition.

ventilator market

The number of emergency admission in hospitals has increased over the years. For instance, in the United Kingdom, the total number of patients admitted in the hospitals in the emergency condition has increased from 5,010,670 in 2008-09 to 6,437,959 in 2018-19 (source: Hospital Episode Statistics, NHS Digital). Similarly, there were 36,353,946 admissions in the United States Hospital in 2018 (source: American Hospital Association). Moreover, the number of COPD cases has been increasing worldwide, with the World Health Organization (WHO) estimating the burden of moderate to severe chronic obstructive pulmonary disease (COPD) to be around 65 million individuals. Thus, the ventilator market size is estimated to reach US$3,095.180 million by 2025

Hospital Emergency Admissions in the United Kingdom, in Thousands

ventilator market

Source: Hospital Episode Statistics, NHS Digital

COVID-19 Impact

As of 30th July 2020, there are 17,195,62 recorded COVID-19 cases worldwide, with the United States, Brazil, and India cumulatively constituting more than 50% of the cases. Moreover, only 10% of the patients may require mechanical ventilation support in order to aid in the patient’s recovery and treatment. However, in absolute terms, the 10% figure is high which is adding significant pressure on the government to ensure that adequate beds and ventilators are available to patients – should a need arise. The COVID-19 pandemic has swelled the revenue generation opportunity for the manufacturers, with the ventilator market, projected to surge in 2020.   

  • Five contracts have been awarded by The Department of Health and Human Service for ventilator production in April 2020 under the Defense Production Act (DPA) to General Electric, Hill-Rom, Medtronic, ResMed, and Vyaire while two other production-related contracts were given to Zoll and Hamilton. These seven contracts are expected to provide 137,431 ventilators by the end of 2020.
  • Similarly, the Department of Health and Human Service announced in April 2020 the second contract, under the Defense Production Act (DPA) for ventilator production to Philips in which the company will be delivering a total of 43,000 ventilators by the end of the year.
  • Philips also announced its plans to increase its ventilator production to 4,000 units per week by the end of Q-3 2020. The company has also launched its new Respironics E30 ventilators with the immediate production capacity of 15,000 units per week.
  • In May 2020, The National Aeronautics and Space Administration (NASA) has awarded the license to three Indian companies along with 18 others to manufacture its ventilators specifically designed for COVID-19 patients that was recently approved by the Food and Drug Administration (FDA).
  • The Andhra Pradesh MedTech Zone (AMTZ) – an initiative taken by the government of Andhra Pradesh, recently announced that it will provide assistance of Rs40 Crore for the large-scale ventilator manufacturing.
  • The Health Ministry of India has placed an order of approx. 60,000 ventilators in April 2020 from domestic manufacturers – who scaled up their production capacity to meet the rising demand.
  • Magnamed – a Sao Paulo based manufacturer has signed an agreement with Brazil’s Health Ministry to supply 6,500 ventilators by the end of August 2020 in order to cater to the need of COVID-19 patients requiring critical care.
  • Vyaire Medical announced that it will be producing 4,300 iX5™ ventilators at its facility in Sao Paulo to supply to the Brazilian Health Ministry that awarded the company a contract worth US$50 million in April 2020.

Developing Healthcare Infrastructure Driving the Market in Asia Pacific

China has made significant progress over the years in improving the access to healthcare services to its large proportion of the population. This is indicative of the fact that more than 95% of the population has been covered under healthcare insurance. Moreover, in 2016, the government of China announced Health China 2030 blueprint that is based on the principle of prioritizing health, supporting innovation and scientific development, and to boost healthcare services in the remote regions of the country.

Number of Hospitals in China, in Units

ventilator market

Source: National Bureau of Statistics of China

Moreover, the number of hospitals in the country has increased at a CAGR of 5.87% from 20,918 units in 2010 to 33,009 units in 2018 (Source: National Bureau of Statistics of China) with Hebei, Jiangsu, Shandong, Henan, Hunan, Guangdong, and Sichuan cumulatively constituting 41.85% share. Similar efforts have been noticed in India as well where the focus is growing to reduce the waiting time and improve the access to healthcare services even in remote location as well. The developing healthcare infrastructure is providing an opportunity for ventilator manufacturers to generate higher revenues. Moreover, as a result of the COVID-19 pandemic, the Chinese manufacturers are working on the full capacity to meet the demand – both from the domestic and foreign markets. In fact, China has approximately twenty-one multifunction ventilator manufacturers out of which eight have obtained the European Union’s CE marking. Moreover, these companies have shipped more than 1,000 multifunction ventilators to both the domestic and foreign hospitals in order to treat critical COVID-19 patients. Similarly, Kerala State and Drugs Pharmaceutical (KSDP) is expected to start the production of a low-cost ventilator after getting the necessary approvals from the Government of Kerala and Indian Council of Medical Research (ICMR). The pandemic has resulted in many companies working on the full capacity to meet the requirement of the current situation, however, apart from the COVID-19 situation, the healthcare industry in the emerging countries have taken measures to cater to the need of mass proportion of the population that is projected drive the market growth in the next five years.

ABOUT THE AUTHOR

Siddharth David is a Senior Market Research Analyst at Knowledge Sourcing Intelligence LLP. Siddharth’s expertise lies in offering predictive analysis and an all-inclusive outlook of different industry verticals from both the macro and micro point of view, with the special knack in market sizing and delivering key strategic insights. To read more articles by him, and for more information regarding multiple global markets, visit www.knowledge-sourcing.com.