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Proximity sensor sales head for $3bn

02 November, 2007

Global sales of proximity and displacement sensors are set to rise from $2.26bn last year to $3.07bn by 2013. A new report from the analyst Frost & Sullivan suggests that robust growth in emerging economies, combined with the pursuit of production efficiencies in mature economies, will drive the market, but warns that sensor suppliers will face increasing price pressures.

"Sensor solutions are crucial for achieving production efficiency and eliminating unnecessary costs in the manufacturing process," points out senior F&S research analyst, Prashanth Venkatesh. "This is imperative in a global economy where customers are insisting on zero-defect products at very low prices."

Concerns about factors such as pollution control and worker safety have led to government regulations which are having a positive impact on the sensors market, F&S notes, adding that these effects are particularly strong in the EU and North America.

The presence of numerous manufacturers and lack of technology differentiation is forcing participants to compete as commodity manufacturers, F&S warns. This, combined with the arrival of cheaper sensors from countries such as China, has had a negative impact on the profit margins as well as revenues, it adds.

"Pricing pressure will intensify toward the latter stages of the forecast period as low-cost manufacturers improve techniques and introduce better products," Venkatesh predicts. "Economic weakness in Western Europe and the lack of technology innovation in certain segments represent other major challenges."

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