Sensor experts advise technology-reliant companies
Sensing the need for better health of technology-reliant companies (such as sensor manufacturers), those who’ve been around the block a few times provided some advice, in session at this fall’s Sensors Expo & Conference entitled ''The Sensor Industry: State of the Business.''
Sensing the need for better health of technology-reliant companies (such as sensor manufacturers), those who’ve been around the block a few times provided some advice during a session entitled ''The Sensor Industry: State of the Business'' at this fall’s Sensors Expo & Conference.
On the markets...
Steve Nasiri, president of InvenSense, Saratoga, CA, says knowing marketplaces is necessary to product development, marketing, and profits: ''Every customer wants something different....You better understand application as well as your customers do, or you will have to design it many times over.'' For instance, because of tight margins required for commodity products, Nasiri says, some companies avoid automotive, but a ''40-60% margin is doable if you have a valuable product.'' There’s still a high-margin market in sensors for military applications, says Roger Grace, of Roger Grace Associates, but there’s also long gestation, testing, and documentation. High growth is seen in sensors for biotechnology, environmental monitoring, and automotive; solid industrial growth is expected, Grace says. High-growth markets can benefit industrial customers by bringing down the per-unit price of crossover technologies, such as sensors.
On company size and growth...
Companies face differing challenges at varied sizes, Grace says, as follows in sensor markets: at $5 million, startup advantages disappear, capitalization can be limited; at $20 million management can have control issues, product development can be difficult to sustain; at $50 million, there can be limits to market penetration; at $100 million, growth can be the challenge. When the company reaches a certain size, Grace suggests, company founders with entrepreneurial or research-based strengths might be best in another role, ''or go down with the ship.'' Also, he notes, if the company’s doing OK at under $10 million in annual sales, it might be more fun to stay small, rather than selling out, doing an initial public offering (IPO) and reporting to a board of directors. Grace says, ''There’s no shortage of capital. Form a dream that can be expressed in a few words and has deliverables. Pick a technology that is timely, make a profit, keep a focus on growth, work with good people, and behave ethically. Leverage engineering, production, and customers that lead to high-volume applications. Associate with 800-pound gorillas that are market dominant.'' Grace adds, ''Pick your partners with judiciousness. My parents have been married for 63 years. It’s not always good, but the commitment is there.''
Companies can decrease training costs by being close to technology partners and to people who have requisite knowledge, Grace says. NovaSensor (now part of GE Industrial Systems) relied on semiconductor technology and, at the time of its founding, Silicon Valley was great fit, he says. Grace says in sensors, there are fewer than 10 killer sensor-related applications. Everyone else needs to be that much more intense in searching for ways to add value. Grace notes that a $3 two-axis accelerometer chip offers more profit potential than two $5 single-axis chips. Don’t be beneath bargain hunting. Joe Brown, a manager at Suss MicroTec, says because of cycles in semiconductor markets, sensor companies with chip-based technologies have been able to pick up last-generation equipment for pennies on the dollar. For those not wanting to do it themselves, Grace says that outsourcing obviously surrenders some measure of control, but adds that sometimes proprietary processes can be split between two fabs to ensure neither has full view a company’s intellectual property.
One technology that can be used in manufacturing discrete control sensors, as well as other automation and instrumentation, is MEMS (micro-electromechanical systems). Grace points to two MEMS industry roadmaps for additional information to aid in commercialization of MEMS. The MANCEF International Commercialization Roadmap, published in February 2003, is a 16-chapter, 614-page classical technology-driven roadmap, addressing many of the issues in this article including standards and infrastructure. Semiconductor Equipment and Materials International (SEMI) funded early work on this publication. The Nexus roadmap, formally introduced to the market in September 2003, is a product-market roadmap created to a large degree from inputs of the numerous Nexus User-Supplier Clubs.
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InvenSense of Saratoga, CA, uses ''state-of-the-art MEMS technology know-how'' to design and fabricate its tuning-fork vibrating gyroscope.
Measurement Specialties , Fairfield, NJ, uses multiple advanced technologies, including piezoresistive application-specific integrated circuits (ASICs), microelectromechanical systems (MEMS), piezopolymers, and strain gages to make sensors that measure pressure, motion, force, displacement, angle, flow, and distance.
Micro and Nanotechnology Commercialization Education Foundation (MANCEF) is a nonprofit organization founded in 1999 to create and disseminate information to facilitate commercialization of ''small'' technologies. It has more than 300 members.
GE NovaSensor provides high-technology products and services to the automotive and space, defense & information systems markets.
Roger Grace Associates (RGA) founded in 1982, specializes in sensor and semiconductor marketing.
Suss MicroTec manufacturers production and test equipment for microelectronics
The presentation ''The Sensor Industry: State of the Business'' was prepared by Joseph R. Mallon Jr., board of directors, Measurement Specialties, who was unable to attend the session.
—Mark T. Hoske, Control Engineering, editor in chief, MHoske@cfemedia.com