The preliminary ranking of OEMs supplying electronic equipment to the industrial sector shows agricultural and construction companies holding two of the top three positions.
Supply to the industrial sector is most commonly associated with multinationals such as GE, Siemens and United Technologies. However findings from Semicast’s “Tactical Analysis of the World Industrial/Medical Electronics Market & Supply Chain” show that, owing to the size of the industrial transportation sector and the dominant position they hold within it, Caterpillar and Deere & Co. are estimated to have been two of the three largest industrial OEMs in 2007.
Semicast forecasts that manufacturer revenues in the overall industrial and medical sector will grow from $525bn in 2007 to $775bn in 2013, a CAGR of almost 7%. While possibly overlooked by many companies assessing opportunities to supply to the industrial sector, transportation equipment (such as farm machinery, construction machinery and forklifts) had the highest revenues in 2007, of $165bn. This is substantially ahead of revenues in the next largest sector (Factory Automation & Control), estimated at $118bn.
The analysis shows that from 2007 to 2013, broadly similar revenue growth is forecast for the Factory Automation & Control, Lighting/Building Automation/HVAC and Medical Imaging & Diagnostics sectors. Opportunities in the medical market are predominantly driven by increased equipment demands to meet the clinical needs of an ever aging population, with imaging systems, pacemakers/ICDs and hearing aids among the equipment types leading growth. Colin Barnden, Semicast’s principal analyst and author of the study commented
“Considering the steadily rising age of the population of North America, the EU and Japan, rising demand for electronic medical equipment is sure to continue over the long term”. GE, Philips and Siemens are the leading suppliers of medical imaging systems, while Boston Scientific, Medtronic and St Jude Medical top the list of OEMs supplying diagnostics, therapy and monitoring equipment.
One finding of significance regarding the overall medical sector is that while rising demand for consumer medical equipment, and “tele-health” have made regular headlines in the press in recent years, from a manufacturer revenue perspective, sales of consumer medical equipment is dwarfed by that of imaging and diagnostics. While unit shipments of consumer medical equipment (such as blood glucose monitors, blood pressures monitors and heart rate monitors) look certain to top 150 million units in 2008, the associated low prices and aggressive price erosion limits revenue growth. It should therefore be noted that the consumer medical sector had the smallest revenues in the overall industrial/medical market in 2007 and further it is forecast to record the lowest revenue growth to 2013.
In other areas of the industrial market, revenues in the Lighting/Building Automation/HVAC sector also look set for steady growth in the long term. This reflects not only a general rise in equipment demand, but also a trend from mechanical to electronic control in equipment types such as lighting ballast, utility metering and environmental management. Further, the sophistication of many systems is rapidly increasing, with CCTV and video surveillance leading this trend with the adoption of features such as video content analysis, head-end image compression and ever rising storage capacities driving up average system costs. However it must be highlighted that while exciting trends in security are more likely to attract the attention of the press and even the general public, plain old elevators and escalators emerges as the leading revenue driver in this sector, propelling the likes of United Technologies (Otis) and Schindler to the top of the OEM vendor rankings.
In summary, Semicast’s vendor analysis has identified more than 300 global OEMs with revenues of electronic equipment to the industrial and medical sector exceeding $100 million, with the top 50 accounting for almost two-thirds of the total in 2007. Thus, identifying these suppliers and the segments in which they operate can be seen as crucial for any company looking to understand the tactical make-up of the supply chain in the industrial and medical sector, in order to benefit from the steady and dependable growth offered by these applications and customers.
Semicast
