The magnetic sensor market size is expected to reach USD 6.2 billion by 2025, from USD 4.3 billion in 2020, at a CAGR of 7.7% from 2020 to 2025. Increasing focus by manufacturers on producing 3D magnetic sensors and increasing investments in the magnetic sensor ecosystem is one of the factors driving the growth of the market.
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Impact of COVID-19 on the Global Magnetic Sensors Market
The outbreak and spread of COVID-19 have had a major impact on operators in the magnetic sensor value chain. Global increase in demand for smartphones is one of the key factors driving the growth of the magnetic sensors market. However, due to the lockdowns imposed by different governments to curb the spread of COVID-19, the sales of smartphones across the globe have declined significantly, thereby affecting the growth of the market. In addition, these blockades also affected the production of magnetic sensors. They also affect the GDP of countries around the world and the per capita income of individuals. Lower disposable income has led to lower purchasing power of the masses, thereby leading to lower year-on-year growth of the overall market.
➤ Driver: Increased investment in magnetic sensor ecosystem
Rising adoption of magnetic sensors in advanced applications such as autonomous vehicles is expected to spur the growth of the global magnetics market. The magnetic sensors used in these systems are efficient, accurate, reliable, robust and simple in design. Magnetic sensor manufacturers are increasingly investing in different magnetic sensing technologies such as 3D sensing, tunneling magnetoresistance (TMR) and giant magnetoresistance (GMR) to enhance their domain expertise and strengthen their market positions. Moreover, these players are also expanding their magnetic sensor product portfolios by launching updated products to cater to various end-use markets.
➤ Intense pricing pressure
While the widespread use of magnetic sensors in autonomous vehicles, consumer electronics, and healthcare equipment led to increased shipments of these sensors, sales growth was significantly restrained by price erosion. This is partly due to intense competition among a growing number of sensor manufacturers. They use their research and development activities to provide cost-effective solutions to existing magnetic sensing technologies, such as position, velocity and angle sensors manufactured using MEMS and 3D sensing technologies. Active R&D efforts lead to rapid innovation of new portable, consumer and IoT applications, which in turn leads to pricing pressure, especially for high-volume applications. Finally, manufacturers are forced to reduce the potential price of magnetic sensors. This price drop not only hampers revenue growth in the highly competitive magnetic sensor market, but also reduces profit margins for suppliers. The main challenges for companies operating in this market are to increase their manufacturing capabilities, provide higher quality products, and reduce overall production costs.
➤ Opportunity: Increased manufacturing of hybrid and electric vehicles
Hybrid and electric vehicles are gaining traction because they are more digitally connected than conventional vehicles. In addition, they reduce the consumption of fossil fuels such as gasoline and diesel, reduce global warming and ecological damage, and provide excellent fuel efficiency. Additionally, the automotive industry has been facing a slowdown in demand for hybrid, electric and autonomous vehicles due to COVID-19. However, in the post-COVID-19 period, demand for hybrid, electric and autonomous vehicles is likely to be higher than for any other vehicle type. The surge in demand for these vehicles can be attributed to changing lifestyles, government incentives to adopt green vehicles to reduce carbon dioxide emissions, and advent of advanced technologies. One of the main advantages of using electric vehicles is that these vehicles are non-polluting. Additionally, several major automakers such as General Motors (US), Ford (US) and Renault (France) are expanding their hybrid and electric vehicle businesses. Power electronics is a key technology in HEVs, accounting for about 20% of the total cost of HEVs. This creates high-growth opportunities for magnetic sensors in position, velocity, and angle detection and measurement applications.
➤ Challenge: Anticipated shortage of raw materials and supply chain disruptions for manufacturing sensors due to COVID-19
The COVID-19 pandemic, which has claimed many lives, has also had political and economic consequences. Therefore, the shortage of raw materials for magnetic sensor manufacturing is expected to be further exacerbated as the main raw material suppliers belong to China and Taiwan. Additionally, the COVID-19 outbreak has severely impacted global manufacturing due to supply chain disruptions. The pandemic has severely affected end users of magnetic sensors, including the automotive industry. Declining automotive production has led to a drop in global demand for magnetic sensors. As a result, the output of magnetic sensors has also declined. This affects the revenues of magnetic sensor manufacturers such as Melexis (Belgium) and Allegro MicroSystems, LLC (USA), which supply magnetic sensors primarily for automotive applications. Hence, shortage of raw materials, declining demand for end products, and disruptions in supply chains pose challenges to magnetic sensor manufacturers.
➤ By Type, Hall Effect Sensor Market Shared Largest in 2019
Hall effect sensors accounted for the largest share of the magnetic sensor market in 2019 and are expected to continue to hold the largest share during the forecast period. The growth of this segment can be attributed to the growing demand for Hall effect sensors in the automotive and consumer electronics industries. The automotive industry is one of the major consumers of Hall effect sensors; they are used in ADAS as well as hybrid and electric vehicles for position and speed measurement.
Speed sensing applications are expected to register the highest CAGR between 2020 and 2025.
The market for magnetic sensors for speed sensing applications is expected to grow at the highest CAGR during the forecast period. This growth can be attributed to the growing demand from the automotive industry for magnetic speed sensors that are highly accurate, small in size, simple in design, reliable, and portable. In the automotive industry, speed sensors are used in anti-lock braking systems (ABS), engine camshafts/crankshafts, speedometers and automatic transmissions.
The transportation sector will lead the magnetic sensor market in 2019
The transportation segment accounted for the largest share of the magnetic sensor market in 2019. Surging demand in the automotive industry for safety and navigation features has increased the use of magnetic sensors in the industry. Additionally, safety-related regulations in regions such as North America and Europe are driving the adoption of magnetic sensors in the transportation industry. In addition, the modernization of railway networks and the deployment of innovative navigation systems in next-generation submarines are also among the factors driving the growth of the transportation industry market.
Asia Pacific to lead the magnetic sensor market during the forecast period
Asia Pacific accounted for the largest share of the overall market in 2019; it is expected to grow at the highest CAGR during the forecast period. Growing demand for magnetic sensors in automotive and consumer electronics is driving the growth of the market in Asia Pacific. Furthermore, increasing number of small and medium enterprises (SMEs) and increasing investments by these companies in developing improved magnetic sensors for various applications are driving the growth of the market. Moreover, China, Japan, India, and South Korea are among the top 20 countries in terms of global vehicle production; thus, the region offers a huge growth opportunity for the magnetic sensors market.
➤ Classify Magnetic Sensors Market by Type, Scope, Applications and End-User Industries and Regions
Based on type:
Hall effect sensor (Hall IC, Hall element)
Magnetoresistive sensors (anisotropic magnetoresistance (AMR) sensors, giant magnetoresistance (GMR) sensors, tunneling magnetoresistance (TMR) sensors)
SQUID Sensors (High Temperature SQUID, Low Temperature SQUID)
Fluxgate sensor
Others (Optical Pump, Magnetic Diode, Magneto-Optic, Search Coil, Magnetic Induction, Overhauser, Reed)
Based on scope:
<1 microgauss
1 microgauss–10 gauss
>10 Gauss
Based on application:
Speed sensor
Proximity Detection/Non-destructive Testing
Position sensing
Navigation and Electronic Compass
Flow sensing
Other (Megaencephalography (MEG), Magnetic Resonance Imaging (MRI), Magnetocardiography (MCG), Magnetomyography and Neuromagnetography and Rotational Reference Detection)
Based on end user industry:
transportation
Consumer electronics products
Health care
Aerospace & Defense
Industry
BFSI
Other (Energy & Power, Food & Beverage (F&B), and Research)
Based on region:
North America
Europe
Asia-Pacific