Machine-vision sales slowly improving for North American companies, competition increasing

DECEMBER 16, 2009--The 2009 North American merchant machine-vision market is expected to decline about 30% according to Nello Zuech, Yardley, PA consultant in machine vision.

DECEMBER 16, 2009--The 2009 North American merchant machine-vision market is expected to decline about 30% according to Nello Zuech, Yardley, PA consultant in machine vision (www.vision1.com/vsi), falling to an estimated $1.13 billion from $1.6 billion in 2008. At the end of the third quarter the North American merchant market was off by 34.3%, which reflected improvement in revenues from the end of the first half of 2009 when the market was off by 38%.

The projection for end-of-year revenues anticipates continued market improvement in 4Q09. While capital spending is still off in many of the manufacturing industries widely deploying machine vision (e.g., capital spending in the semiconductor market is expected to be off by 45% in 2009, according to SEMI), there are industries where capital spending is increasing quarter-over-quarter and machine vision is expected to benefit. In many companies capital equipment budgets have not been spent at typical rates in the course of 2009 given the US economy, so there is a fair amount of catching up to do in the last quarter, says Zuech.

With continued improvement expected in the fourth quarter, it is estimated North American merchant machine-vision companies will sell $2.4 billion into the worldwide machine-vision market in 2009, a decrease of 34% from $3.6 billion in 2008. The worldwide revenues of the North American merchant machine-vision companies were also down 39.7% at the end of 3Q09. At the end of the first half of the year, North American machine-vision industry revenues were off 44.8%. These estimates suggest improvement in the third quarter, according to Zuech.

In both cases, declines are greater than the North American market declines reflecting North American companies are losing market share in the worldwide market. This is especially true of companies offering application-specific machine-vision systems for the semiconductor and electronic industries. While traditionally these companies faced major competition from Japanese companies, today they also face competition from Korean and Chinese companies, says the consultant.

Findings on a quarterly basis follow for the respective quarters.

North American Merchant Machine-Vision Market
Quarter 1
Year-over-year: -37.8%
Quarter-over-quarter: -25.8%

Quarter 2
Year-over-year: -38.3%
Quarter-over-quarter: -0.4%

Quarter 3
Year-over-year: -26.5%
Quarter-over-quarter: +12.7%

North American Merchant Machine-Vision Industry
Quarter 1
Year-over-year: -43.6%
Quarter-over-quarter: -26.8%

Quarter 2
Year-over-year: -45.0%
Quarter-over-quarter: -0.8%

Quarter 3
Year-over-year: -30.0%
Quarter-over-quarter: +19.5%

While the US economy is likely not to see great improvement in 2010, given the average of many estimates for capital spending in the semiconductor industry suggesting an increase in spending of about 25% in 2010 and continued investments are anticipated in the various consumer goods industries in 2010, the North American machine-vision market should increase by 15-20% in 2010. Given, as observed above, North American merchant machine-vision companies are facing ever more competition from Pacific Rim companies and their share of the worldwide machine-vision market is declining, the North American machine-vision industry will likely see somewhat smaller increase in revenues: 12–17%. Significantly, in the US, there are many regulatory drivers for embracing automation as well as the need for US-based companies to maintain competitiveness in the global economy, which bodes well for investments in machine vision, concludes Zuech.

-- Posted by Vision Systems Design, www.vision-systems.com

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