JANUARY 16--According to the most recent Quarterly Machine Vision Report/Newsletter from machine-vision consultancy Vision Systems International (VSI), the North American machine-vision market appears to have grown substantially in 2006--about 14.4% reaching $1517M, with most of the growth driven by application-specific machine-vision systems targeted at applications in the semiconductor and electronic industries. The North American market for configurable machine-vision products (frame grabbers, smart cameras, embedded vision computers, and so forth) only increased 4.6% to $331.7M. At the same time, the North American machine-vision industry saw revenues increase 15.8% to $3155M from worldwide sales, while the North American suppliers of configurable machine-vision systems saw their worldwide sales increase 8.1% to $573.8M.
In 2006, capital spending in the semiconductor market grew about 20%, and machine vision sales into the semiconductor capital equipment market grew proportionally. The challenge is that current expectations for 2007 are that capital spending will be flat, which would not be bad for machine vision, but not contribute to year-over-year growth.
According to Nello Zuech, president of VSI, the first half of 2006 was better than the second half. Since the momentum going into 2007 appears to be consistent with economic forecasts for the US economy in 2007, this suggests that the US market for machine vision will most likely be flat in 2007, which is not really bad given 2006 was a really good year.
The real challenge facing the US machine-vision market in 2007 is the slowing down of three major drivers for machine vision: the semiconductor-capital-equipment, auto, and housing industries. Some suggest that the number of cars sold in the USA next year will decrease as the value of housing decreases and individuals do not feel as rich. Another factor is that as housing starts decline, builders will defer purchases of pickup trucks, which are Detroit's most profitable models. Higher interest rates are another factor that makes the cost of a car greater. Furthermore, cars are now designed to last longer and warrantees have been extended even on American made cars. A downturn in the sales of cars will especially exacerbate the profitability of the "Big Three" US producers. These factors along with the anticipated shuttering of many plants by the Big Three will likely lead to a decline in spending in the auto industry for capital equipment like machine vision.
Fewer housing starts will have a ripple effect on the capital spending of many industries associated with new housing construction including lumber, appliances, consumer electronics, textiles, and so forth. As suggested, projections for capital spending in the semiconductor industry are at best expected to be flat.
So what does all this mean for machine vision? It seems that for 2007 the North American machine-vision market will at best be flat. On the other hand, the North American machine-vision industry could see modest gains as the economies of European countries and Asian Pacific countries appear to be healthy and growing.
Vision Systems International is an independent business consultancy concentrating on the machine-vision market.
