George Kotelly, Editor in Chief
AIA Business Conference draws global audience
The Automated Imaging Association (AIA)—the North American trade group of machine-vision technology—held its ninth annual Business Conference in Orlando, FL, last February, attracting nearly 180 attendees. Overseas visitors came from England, Finland, France, Germany, Ireland, Italy, Singapore, South Africa, Sweden, and Switzerland and expressed favorable comments on the conference. As usual, this event provided networking opportunities for industry executives, technologists, and professionals and offered them new business insights, contacts, and relationships on both national and international levels.
At the conference, Mike Kelley, director of marketing at Electro Scientific Industries Vision Products Division, was elected the 2001—2002 AIA president. Kelley has been on the AIA board of directors for the past two years and has played a role in improving the AIA annual market study. He succeeded Dave DeChow, president of ISRA Vision Systems North America/Insight Integration, who remains on the AIA board of directors as past president.
Kelley commented, "As the machine-vision market becomes increasingly global, it's important that our [market] study collect better data on Europe, Japan, and the other overseas markets, and present the data in a way that companies find user friendly." He put at the top of his priority list for the coming year the continued expansion of the AIA Web site (www.machinevisiononline.org) and efforts to forge new global opportunities for AIA members, who now total 236 suppliers, systems integrators, end users, and research organizations.
The AIA also elected four new board members: Mike Cyros, chief operating officer of Datacube Inc.; Salvatore D'Agostino, president and chief executive officer of Computer Recognition Systems; John Stack, president of Edmund Industrial Optics; and Fred Molinari, president of Data Translation Inc.
During the conference, the 2001 Automated Imaging Achievement Award was presented to Pat V. Costa, president, chief executive officer, and chairman of the board of RVSI since 1984. The award honors an industry leader for outstanding contributions in promoting market acceptance of industrial or scientific imaging. During his tenure at RSVI, Costa has grown the company from a small defense industry contractor to a leading machine-vision supplier serving multiple industries. From 1986 to 1988, Costa was the chairman of the board of the Automated Vision Association, the predecessor to the AIA.
In the opening session, Pat Lamey, senior director of corporate strategy at Applied Materials, a manufacturer of semiconductors, spoke on "The Strategic Outlook for Machine Vision at Applied Materials." He pointed out that the current long-term drivers for IC manufacturing are continued fab upgrades to 0.18 µm and smaller, use of new materials such as copper and low-k dielectric, and investment in 300-mm wafers. He also described the company's defect-detection equipment used for process control, automation, and inspection.
Joe Campbell, vice president of marketing at Adept Technology Inc., covered his company's experience in developing its Web site and applying it to e-commerce. He described how Adept went through the problem-solving stage of site development, resulting in a captive link from the Thomas Register, company product descriptions and specifications, an interactive performance analyzer that allows users to configure systems, ordering guidelines, and a special promotion section for excess, stale, and special order inventory. He recommended that a Web site deliver value to the customer.
The highlight of the conference was the annual AIA machine-vision market survey and forecast report. As he has done for the past eight years, Nello Zuech, president of Vision Systems International, compiled and presented excerpts of the soon-to-be-published study. He said that machine-vision market revenues for 2000 for North American OEM merchants were $1.57 billion, an increase of 25.8% over 1999 totals. Including the revenues of value-added sales increased the total market revenues to $2.11 billion, a growth of 25.5%. For the North American machine-vision market, the study revealed that 83% of those queried said "the overall business conditions for the machine-vision industry were good to excellent."
The number of North American machine-vision units sold in 2000 was 50,530, a rise of 26.4%. The average OEM machine-vision system price was $31,130, a drop of 0.4% from 1999 prices. When the system includes value-added components, the average price rises to $41,797.
The top-ten machine-vision markets that accounted for more than 92% of sales were semiconductor, electronics, container, food, wood, transportation, fabricated metal, plastic, printing, and pharmaceuticals. The top-two markets—semiconductor and electronics—tallied 64.4% of revenues and 66.1% of units shipped.
Zuech offered the following machine-vision-market revenue projections: $1.8 billion in 2001, $2.3 billion in 2003, and $3.0 billion in 2005. Over the same period, unit shipments are estimated at 57,693, 75,477, and 99,186, respectively.
For the Japanese market in 2000, the study figured merchant machine-vision market revenues at $1.5 billion. Including the value added by OEMs and systems integrators raises revenues to $2.0 billion, just slightly less than the North American market. Unit shipments in Japan totaled 48,705.
European 2000 machine-vision market revenues grew 27% to $1.1 billion. Including the value added by OEMs and systems integrators pushed revenues to $1.5 billion. Unit shipments in Europe were 32,800.
By adding in the rest-of-world statistics, Zuech appraised the worldwide 2000 machine-vision market revenues at $6.3 billion and units shipped at 137,220. As for economic trends, 51.5% of those interviewed for the study envisioned that the business climate for the US machine-vision market will improve, and US spending is anticipated to increase by 9%.
EUROPEAN MARKET REPORT
Enis Ersü, chief executive officer of ISRA Vision Systems AG and chairman of the board of the machine-vision division of the VDMA German association of industrial suppliers and systems integrators, presented a detailed European and German machine-vision market report for 1999 (year 2000 statistics are expected this summer). He named some European machine-vision-market frailties, such as being highly fragmented, selling in different languages, being driven mainly by the old economies of the auto and chemical industries, and having few large companies greater than $50 million, among others. Spurring market developments in Europe included increased flexibility in automation, electronic-component market growth, and cooperative government legislation.
Total 1999 European machine-vision-market revenues were determined at US$1.05 billion. Leading this market were Germany with $371 million in revenues and 35% in market share, France with $205 million and 19% market share, and the United Kingdom with $196 million and 19% share. Trailing in revenues were Scandinavia ($61 million and 6% share), Spain ($57.7 million and 5% share), and Italy ($51 million and 5% share).
The application sectors that generated the highest revenues were electrical and electronics at 28.1%, others at 23.3%, mechanical engineering at 16.4%, and automotive at 16.1%. The leading European machine-vision-market application areas included 1- and 2-D metrology systems at 23%, guidance systems at 17%, web-inspection systems at 15.9%, 3-D metrology systems at 12.2%, non-web flaw systems at 11.6%, recognition systems at 10.7%, and shape-conformity systems at 9.1%.
Focusing on the German machine-vision market, Ersü reported that among the approximately 220 small and medium companies in this field, about 40% have been active for more than 10 years and another 40% for 5 to 10 years. Factory automation in Germany drives machine-vision revenues in the application areas of electronics at 16.8%, automotive at 15.4%, metal processing at 11.4%, and pharmaceutical, medicine, and cosmetics at 10.8%. Within the machine-vision industry, the systems segment led revenues at 73%, followed by cameras and sensors at 14%, frame grabbers and components at 5%, illumination at 3%, optics at 3%, and software tools at 2%. The German machine-vision industry is predicted to grow 25% in 2001, and total revenues are estimated at DM1.35 billion.
THE WALL STREET VIEW
Presenting the Wall St. view of the US machine-vision industry was T. L. Stebbins, managing director and co-head of investment banking at Adams, Harkness and Hill. According to Stebbins, the machine-vision stock index, made up of 15 industry-related companies, was, from January 1999 to January 2001, in tight correlation (+119% to 121%) with the semiconductor capital-equipment stock index, made up of 44 industry-related companies. However, according to Stebbins, the relatively small machine-vision market size and unit sales have not captured Wall Street's imagination. In fact, only seven machine-vision companies do enough business to qualify for small capital status under Wall St. business rules.
In sum, Stebbins remarked that the machine-vision industry is still not a homogenous market, cannot support full-time (Wall St.) analysis, has no participants that "have to be followed," and has no "new technology theme" that would draw (Wall St.) attention. Therefore, added Stebbins, the machine-vision industry will continue to be "underfollowed" because it is out of the center of technology favor. It has no demanding individual stock, such as a Cisco Systems. On the plus side, though, the machine-vision index average from calendar 2000 through 2002 is forecast to beat both the S&P 500 average and the Dow Jones industrial average.
Keith Reuben, president of Coreco Imaging, spoke about successful mergers and acquisitions. He presented six steps he feels should be addressed to successfully acquire a company: cost savings, revenue growth, process improvements, financial benefits, tax benefits, and "for the sake of it." This strategy was derived over the years as Coreco purchased Amber Electro Design in 1989, Logical Design in 1997, Dipix Board Division in 1998, and Imaging Technology Inc. in 2000. After the acquisition, said Reuben, set reasonable objectives, appoint new leadership, preferably from within, deal with employment concerns, empower local management, and let them run the show.
RSVI president and CEO Pat Costa discussed how to survive a market downturn. He offered five survival rules: cash is king because working capital takes cash; be ready for a downturn by running research and development for an upturn; use the extra time of a downturn to do things better; don't consider a downturn as a negative, instead, improve and change technologies and products and build relationships with customers and employees, and bond for a shared mission; and, share price does not indicate the true value of a company.
Philips Components (Sunnyvale, CA; www.components.philips.com), a supplier of large liquid-crystal and mobile flat displays, has invested $5.5 million in Visson Enterprises Ltd. (Israel). Visson has developed a novel technology for flat, thin, foldable displays.
Roper Industries Inc. (Bogart, GA; www.roperind.com) has consolidated Roper Scientific MASD Inc. and Redlake Imaging Corp. into Redlake MASD Inc. (San Diego, CA; www.redlake.com), a supplier of digital cameras for motion analysis and machine vision.
The MathWorks Inc. (Natick, MA; www.mathworks.com) and Texas Instruments Inc. (TI; Dallas, TX; www.ti.com) have integrated MathWork's MatLab 6 and Simulink 4 software with TI's eXpressDSP real-time software into the Developers Kit for TI digital-signal processing (DSP) to produce more efficient DSP designs in a shorter time.
Wieland-Werke AG (Ulm, Germany), a copper strip manufacturer, has integrated the SmartView ICN web-inspection system from Cognex Corp. (Natick, MA; www.cognex. com) into its copper pickling line. The installed system is checking copper sheets for particles of dirt remaining from the rolling process and acid bath.
White Electronic Designs Corp. (Phoenix, AZ; www.whiteedc.com) has been awarded a US patent for its super-bright low-reflectance technology that enhances the image quality of liquid-crystal displays while preserving image integrity under high ambient light.
Mercury Computer Systems (Chelmsford, MA; www.mc.com) is offering RACE++ Series multicomputer products that support CompactPCI (CPCI) architecture. Initial products consist of a 6U CPCI system in which each motherboard accepts the company's PowerPC 7400 microprocessor daughtercards. Each CPCI motherboard supports as many as four G4 microprocessors and can exchange data with other motherboards via the RACE++ communications platform.
Burle Industries Inc. (Lancaster, PA; www.burle.com) has developed a 2-µm-pore microchannel plate for improving the instrument sensitivity, mass resolution, temporal response, and dynamic range for night-vision devices and time-of-flight mass spectrometry (TOF-MS). This plate is expected to double the resolution of image intensifiers used in night-vision applications and increase detector gains in excess of 107 with a 350-ps pulsewidth for TOF-MS applications.
STMicroelectronics (Geneva, Switzerland; www.st.com) has released its first CMOS 0.25-µm analog-to-digital (A/D) converters—the TSA0801 8-bit, 40-MS/s A/D, the 10-bit 25-MS/s TSA1001 A/D, and the 10-bit 50-MS/s TSA1002 A/D. Each converter provides a pipeline structure, digital error correction, and a 2-V p-p differential input range, and operates from a 2.5-V supply.
DRS Technologies Inc. (Parsippany, NJ; www.drs.com) has received a multiyear production contract of $16.7 million from Raytheon Missile Systems Co. (Tucson, AZ) to supply second-generation forward-looking infrared detectors for the Javelin Anti-Tank Weapon System Program.
Lambda Tech International (Waukesha, WI; www.lambdatech.com) has signed a $2.3 million subcontract with PB Facilities Inc. (Herndon, VA) to install its GPSVision system on vans to collect right-of-way and centerline data for the roadways of Virginia. The GPSVision system incorporates GPS satellite data, an inertial measurement device, and stereo digital cameras.
Scan-Optics Inc. (Manchester, CT; www.scanoptics.com), a supplier of image-processing, character-recognition, and data-capture products, has received a $2.2 million order from the State of Texas Comptroller of Public Accounts (Austin, TX; www.window.state.tx.us) to supply VistaCapture software and services for its Series 9000 scanners.
Omicron Corp. (Hudson, MA; www.omicroncorp.com) is providing the system integration of a voter-registration and electoral system for the government of Uganda. This system incorporates the Viisage Technology Inc. (Littleton, MA) face-recognition biometric technology that will perform the automated face-matching processing of 10 million digital images and return a search request in 6 s.
Agilent Technologies Ireland Ltd. (Dublin, Ireland; www.agilent.com), a supplier of automated x-ray inspection and in-circuit test systems, is buying privately held MV Technology Ltd. (Dublin, Ireland; www.mtv.ie), a provider of automated optical-inspection systems for the electronics market. It plans on opening a center for automated optical inspection in Dublin—the Irish Imaging Operation.
Displaytech Inc. (Longmont, CO; www.displaytech.com), a supplier of ferroelectric liquid-crystal displays, has appointed chief executive officer Haviland Wright as chairman of the board.
TeraRecon Inc. (San Mateo, CA; www.teracon.com), a supplier of medical-imaging platforms, has bought both the 3-D volume graphic and real-time-visualization business units from Mitsubishi Electric Corp. (Cypress, CA; www.mitsubishielectric.com), a supplier of electrical and electronic products.
The Digital Imaging Group (DIG; www.digitalimaging.org), an industry consortium of companies involved in digital imaging, and the Photographic and Imaging Manufacturers Association (PIMA; www.pima.net), a group of companies involved in manufacturing chemical-based or digital-based photographic products, have agreed to merge on July 1, 2001.
The PCI Industrial Computer Manufacturers Group (PICMG) (Wakefield, MA; www.picmg.org), a consortium of more than 600 industrial computer-product vendors, has re-elected all of its officers: president is Joe Pavlat (director of strategic planning at Motorola Computer Group); vice president of marketing is Rob Davidson (director of marketing at Ziatech); vice president of technology is Dick Somes (technical director for standards and industry relations at Force Computers); and secretary-treasurer is Michael Munroe (director of business development at ERNI).
StockerYale Inc. (Salem, NH; www.stockeryale.com), a supplier of optical communication and illumination products, has named Yvan Beauregard vice president of operations for StockerYale Canada. He previously held senior management positions at Nortel Networks.
Optics 1 Inc. (Londonderry, NH; www.optics1.com), a supplier of optical, electro-optical, and optomechanical systems, has appointed Vadim Plotsker director of business development. He was recently vice president of new business development at Insight Technology.
Key Technology (Walla Walla, WA; www.keyww.com), a manufacturer of process-automation, electro-optical, and sorting systems, has promoted Kirk W. Morton to president and chief operating officer. He previously served as senior vice president of sales and marketing.
Royal Philips Electronics (Amsterdam, The Netherlands; www.news. philips. com), a supplier of electronics products, has purchased ADAC Laboratories (Milpitas, CA; www.adaclabs.com), a supplier of positron emission tomography imaging and nuclear medicine imaging equipment.
STMicroelectronics (ST; Geneva, Switzerland; www.st.com), a supplier of semiconductor and electronics products, has acquired Portland Group Inc. (PGI; Portland, OR), a compiler and software-development-tool vendor, for $17.1 million. The companies will combine ST's advanced ST100 DSP core designs with PGI's compiler technologies.
OmniVision Technologies Inc. (Sunnyvale, CA; www.ovt.com) has promoted vice president of marketing and sales Bob Stroh to vice president of strategic marketing and business development. The company also shipped its ten-millionth single-chip CMOS image sensor.
QImaging (Burnaby, BC, Canada; www.qimaging.com) has appointed John Bogan vice president of sales. He was previously vice president of sales at Dage-MTI Inc.
Omega Optical Inc. (Brattleboro, VT; www.omegafilters.com) has named Roy Kinoshita product manager for fluorescence microscopy. He is completing his Ph.D. at the department of biomedical sciences at SUNY Albany (Albany, NY).
According to Semiconductor Equipment and Materials International (SEMI; Mountain View, CA; www.semi.org), the North American-based manufacturers of semiconductor equipment reported a drop from the December 2000 book-to-bill ratio of 1.03 to the January 2001 ratio of 0.81, the sharpest decline in the past 12 months; that is, $81 in orders were received for every $100 worth of products shipped. The three-month average of worldwide shipments in January 2001 was $2.3 billion, which was 2% lower than the revised December 2000 shipments level but 46% higher than the $1.6 billion shipments level of January 2000.
Semiconductor Industry Association (SIA; San Jose, CA; www.semichips.com) reports that in 2000 worldwide semiconductor sales climbed to $204 billion, an increase of 37% over 1999 revenues, setting a new industry record. Worldwide semiconductor sales totaled $17.9 billion in December, an increase of 21.6% over last year's total. The optoelectronics market, which includes laser devices and image sensors, rose 69.7% to $9.8 billion. The Americas represented 31.3% of world chip sales.