AUTOMOTIVE SENSORS

Chris Webber, VP, Automotive Practice, Tel +44 1908 423641, cwebber@strategyanalytics.com

Agenda

Intro to Strategy Analytics Scene Setting Automotive Electronic Market Analysis

Vehicle Market Outlook Automotive Electronics Market Outlook System Trends Driving Sensor Content

Automotive Sensor Market Analysis

Strategy Analytics - Global Reach Organized Along Industry Practices

Emerging Frontiers

Digital Consumer

Automotive/ Telematics

Strategic Technologies

Primary and Custom Research Solutions

Offices in Boston, Milton Keynes, Paris, Munich, San Jose, Seoul, and Tokyo

Global Wireless

Opportunity Intelligence Solutions

Emerging Frontiers

Emerging Frontiers

Fifteen Syndicated Research Solutions In Five Practices

Consumer Marketing Strategies

Broadband Media & Comm

Connected Home Devices

Digital Consumer

Auto Buyer Dynamics

AMCS

Automotive Electronics

Primary Automotive/ and Custom Telematics Research Solutions

Strategic Technologies

Portable Enabling Tech.

RF Devices

GaAs

Adv. Wireless Lab

Wireless Enterprise

Wireless Internet Applic.

Wireless Networks

Wireless Devices

Global Wireless

Indicates New Service for 2004

Scene Setting

Why Automotive Electronics?

350% 300% 250% 200% 150% 100% 50% 0% 1994 1995 1996 1997 1998 1999 2000 2001 2002

Automotive Computer Industrial Consumer Communication

Over the last 8 years Automotive was the fastest growing electronic segment of all with a CAGR of 12.9%
6

Automotive Sensor Opportunity

Growth in Demand Normalised to 2002
2.2 2.0 1.8

1.6 1.4 1.2 1.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Car & LT Production
Sensor Demand

Automotive sensor volumes forecast to grow at 11% CAAGR* Car & Light Truck production 4% CAAGR*

* CAAGR 2003 to 2008

Automotive Electronic Market Drivers

Growing consumer expectations for a personalised and connected vehicle Networking evolution within the vehicle Conversion of Mechanics to Electronic Systems
15% of car assembly cost electronics 90% of future car innovation will be electronic - BMW

Powertrain, Chassis, Body more computing power, code/data storage requirements

Automotive Electronic Market Drivers

World-wide Car OEM Product Goals:

Improvement in Fuel Economy Improvement in Exhaust Emission Control Enhancements in Active and Passive Safety Increased Vehicle Security Enhancements in Road Handling Enhancements in Driver Comfort and Convenience Enhancements in Driver Information and Entertainment

Pervasive Computing is Here in the Car

Wiper HC912D60 Steering Angle HC912G60 Dashboard MPC555 Sunroof HC912D60 Climate HC912D60 Troll Seat Tilt Alarm HC912D60 (x 5-15) HC912D60

Rain Sensor HC912D60

General Body HC912DG128 HC912D60

ISU MPC555 Tail gate Release HC912D60 Distance / Parking Monitor MPC555 HC912D60 (x4) Lighting HC912D60 Engine Ctrl MPC555 Airbag System Motorola based RADIO HC912D60 HC912DG128 Immobiliser HC912DG128 Tail gate Close HC912D60 Trailer Mgt HC912D60 Rear Door HC912D60 Anti-Theft Alarm HC912D60 Suspension MPC555 * Source Freescale

Front Door HC912D60 HC(8)05PV8

Braking System Motorola based

10

The Future.
Intelligent Systems and Mobile Ad-hoc Networks: ADAS Car-to-Car Communication Road-to-Car Communication Pedestrian Detection Electronic Road-Signs Traffic Flow Control Around the Corner Sensing Integrated Safety Structure Linkage with local Commerce
11

Vehicle Market Outlook

12

Regional Vehicle Market Outlook

NAFTA - Long term outlook strong, 3.7% production volume CAGR (0308) still dominated by incentives Europe - Strong demand outlook, 4.9% production volume CAGR (0308) UK continuing strength, France (CDV esp). Germany low consumer confidence Japan - Flat production levels, modest sales growth China - Strong capacity and production growth thru decade, 12.4% production volume CAGR (03-08) ASEAN growth opportunity in big 4: Indonesia. Malaysia, Thailand, Philippines S.America 1997 sales peak of 2.3MU. 2006/07 to get back to same level.
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Vehicle Production Trends

Car & Light Truck Production (k units)

25000
Source: MIRU

20000

15000

2003
2007 2011

10000

5000

0 Japan North America South Korea W. Europe E. Europe China ROW

14

Automotive Electronics Market Outlook

15

Automotive Electronic Module Demand

System Volume Demand (Million units)
600

500

400
2003 2007 2011

300

200

100

0 Powertrain Chassis Safety Security Body Driver Info.

16

System Trends Driving Sensor Content

17

Safety System Opportunities include: Safety Additional airbags

Satellite sensing modules Roll over sensing

Occupant position
Occupant Classification Sensors

Pedestrian protection Tyre pressure monitoring Lane Departure Warning Driver drowsiness monitor Night vision
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Safety Occupant Protection Growth

70 60 50 40 MU 30 20 10 0 - Front - Side Impact (Front) - Side Impact (Rear) - Head - Occupant Detection

2003 2011

Good growth opportunities from emerging regions, e.g. China, India Rapid growth for side / head bags NA lags Occupant detection legislation driven in USA
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Safety Pre-emptive technology Now: Automotive radar Camera technology Future: Pre-emptive technology E.g. Conti APIA integrated stability, collision avoidance, occupant protection

Source: Siemens VDO

20

ACC Systems and Safety Pre-Crash Toyota Pre-Crash System

Based on millimetre-wave radar sensing Triggers seatbelt pre-tensioners and brake assist system, as driver hits brakes.

Honda CMS System

Based on millimetre-wave radar sensing 3-stage response to danger situation

Mercedes Pre-Safe System (no external sensors)

Uses ESP and brake assist sensors to anticipate crash Triggers pre-tensioners, and can change front & rear seat angle / position & close sunroof

Nissan Pre-Crash
Triggers Nissan patented seatbelt pre-tensioners and brake assist system
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System Trends Driving Sensor Content

Body Systems

22

Body System Opportunities include: Comfort/Convenience Passive authentication

Door handle operation

Power door closure (sliding/lift)

Anti-trap, position

Multi-zone HVAC
Temperature, humidity, sunlight

LED/Gas discharge lighting

Chassis position

Adaptive headlamps
Positioning

Rain Sensors

23

System Trends Driving Sensor Content

Chassis Systems

24

Chassis System & Component Opportunities Electronic power steering control (EPS & EHPS)
EPS moving into mid to large scale vehicles & North America Steering rate & torque

Vehicle Stability Control (ESP)

Maturing in Europe & Japan, as yet unfulfilled market opportunity in U.S. Accleration and yaw-rate

Adaptive Suspension
Acceleration and height sensors

Brake-by-wire (EHB, EMB) ??

Mercedes/Bosch recall major set-back for EHB Bosch previously stated EHB development stopped. Working on further enhancement of ESP/VSC
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EPS Demand
25000
- Electrohydraulic Power Steering - Electric Power Steering

20000

15000

10000

5000

0
5 7 9 1 3 5 7 9 19 9 19 9 19 9 20 0 20 0 20 0 20 0 20 0 20 1 1

EPS migrating into larger models e.g. GM Malibu (D-seg) Higher power motor requirement - brushless dc - switched reluctance (smaller, lower cost) Steering rate and torque sensors

26

System Trends Driving Sensor Content

Powertrain Systems

27

Powertain: OEM Challenge Improve economy without increasing emissions

12.0 19.6 21.6 11.0 23.6 25.6 Fuel Consumption (mpg - US) Fuel Consumption (l/100km)

10.0

9.0

ACEA ACEA (gasoline only) JAMA (gasoline only) US CAFE Averages

27.6 29.6 31.6

8.0 33.6 35.6 37.6 6.0 1995 1996 1997 1998 1999 2000 2001 2002 2003

7.0

Likely impact and penetration of proposed technologies to decrease fuel consumption highly cost dependent, hence some way off e.g. HCCI ACEA improvement in part due to increased diesel sales
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Electric & Hybrid Vehicles Volume expected to rise to 600,000 by 2006 and over 1.7 million by 2010 Japan will continue to dominate market Diesel and LPG/CNG vehicles limiting European growth NA growth hampered by low fuel prices. Fuel cells seem politically favoured in longer term
2500

2000

1500 k Units 1000 500 0

5 7 8 3 6 4 9 0 20 1 2 20 0 20 0 20 0 20 0 20 0 20 0 20 0 20 0 20 1 1

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Automotive Sensor Market Trends

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Emerging Sensor Opportunity

ACC Smart Airbag Blind Spot Wrng. LDWS Night Vision NODS x-by-wire

Side Airbag ESC Keyless Entry E-Steering TPMS Navigation HID Lighting

Engine Mgmt. Front Airbag ABS Primary Instr.

Development

Growth

Maturity

Automotive Sensor Market Drivers

Powertrain Management
diagnostics drive shaft torque turbocharge boost pressure NOx monitor for diesel, lean burn oil condition

Driver Information
Yaw (navigation) Acoustic (voice activation)

Safety/Security
TPMS occupant position (weight, IR, Vision) LDWS Blind spot, rear view camera fingerprint

Chassis
steering torque drive shaft torque

Comfort/Convenience
windscreen surface temperature coolant pressure airflow humidity CO, NOx, HC pollutants

Chassis
Steering rate, position, torque ABS (pedal position, brake press.)

High Growth Sensor Applications

Sensor NOX Current Ultrasonic Pressue - Tyre Infra-Red Temperature - Brake Pressure - Brake Pressure - Side Airbag Position - Rear Angle Position - Clutch Air Quality Rollover Pressure - Occupant Position - Gear Lever Speed - Intermediate Shaft Yaw

Application Emission Control Battery Monitoring Occupant Detection TPMS Occupant Detection Braking Systems Braking Systems Airbag Systems 4-Wheel Steering Automated Manual Transmissions HVAC Airbag Systems Occupant Detection Electronically Controlled Transmissions Electronically Controlled Transmissions ESP, Navigation, Suspension

2008 MU 6.4 7.8 2.7 122 1.9 2.0 9.3 11.3 1.5 4.0 9.4 3.2 33.0 86.0 3.0 24.7

CAAGR 2003-08 139% 104% 84% 72% 72% 71% 64% 56% 46% 45% 36% 32% 24% 21% 19% 18%

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Automotive Sensor Market Forecast

Total 2004 Market for Automotive Sensors worth $8.8B Europe: $3.2B 2003-2008 Average Annual Growth Value 9.5% Units= 11.3% Sensor Average Selling Price $8.3 (across all types) Safety sensors account for 15% of sensor market, CAAGR 18% 2002-2007, greater than any other sensor segment

Automotive Sensor Volume by Application

2400

2000 MU 1600

1200

800

400

0 2002 2003 2004 2005 Powertrain 2006 Chassis 2007 Safety 2008 Body 2009 2010 2011

Driver Info

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Automotive Sensor Market Value

(based upon regional car production output)
5 14

12 4 10 3
$B

8
$M

Automotive Sensor forecast to increase from $8.8 B in 2004 to $13.8 B in 2011

4 1 2

0
2002 2003 2004
JAPAN

0
2005 2006 2007
S.KOREA

2008
CHINA

2009

2010

2011
TOTAL

N.AMERICA

EUROPE

R.O.W.

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Automotive Sensor Market Growth Rates

% CAAGR 2003 - 2008

TOTAL JAPAN N.AMERICA EUROPE S.KOREA ROW CHINA 4.6%

9.5%

9.2% 9.9% 11.0% 17.7% 23.6%

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Total Automotive Sensor Market Value

14000

Million
12000

10000

8000

6000

4000

2000

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SPEED: POSITION:

TEMPERATURE: MASS AIR FLOW:

ACCELEROMETER: OXYGEN:

PRESSURE: OTHER:

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Average Sensor Content / Vehicle

250

200

150
$/Vehicle

100

50

0 2002 2003 2004 2005 JAPAN 2006 EUROPE 2007 2008 2009 R.O.W. 2010 CHINA 2011

N.AMERICA

S.KOREA

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Innovation and Pricing Trends

1st Generation Sensors & Diagnostics 2nd Generation Single-Point Systems 3rd Generation Front & Side Airbag Controls 4th Generation Front & Side Airbag Controls Occupant, Weight & Rollover Sensing

160 140
System Cost $

120 100 80 60 40 20 1960 1980 1995 1998 Year of Introduction 2002 2010
Source: TRW

Silicon-based Sensor Opportunity

15000
Source: Strategy Analytics

10000

M$
5000

0 2002 2003 2004

2005 2006 2007 2008

Non Silicon

2009 2010 2011

Silicon Based

Micromachined silicon and semiconductor based share growing 32% 2004 50% 2010 Cost, integration, diagnostics, networking demand drivers
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Direct TPMS Market North America Leading Growth in Direct TPMS

Driven by Legislation. USA 35% fleet sales to be fitted in 2005, 100% by 2007. 83% CAAGR 03-08 unit growth.

Japan & Europe

Offered as safety option or standard on many high end vehicles.

South Korea
Emerging domestic demand. Serve exports to North America.

China market expected to emerge later in the decade.

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Direct TPMS
Pressure Sensor Total Market Value

700.0 Million $ 600.0 500.0 400.0 300.0 200.0 100.0 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 NA Japan EU SK China

CAAGR 03 - 08 NA 70% Japan 62% EU 42% SK 146% China Emerging

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Direct TPMS - Technology Technology Trends

Present technology MEMS sensor + electronics & battery
Expensive for fleet application Environmental impact of battery disposal

Cost reduction goal Aim to last life of vehicle (7-10 years)

Batteryless solution goal

SAW technology (uses short RF burst < 1-mW excitation power to sensing device)

Vendors SensoNor (Infineon), GE Novasensor, Freescale, Melexis, Transense, Qinetiq/First Tech.

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Next Generation Driver Aids Forecast

12000 10000 8000 6000 4000 2000 0 2003 2004 2005 2006 2007 2008 2009

Distance Warning Night Vision LDWS Pking/Blndspt

Units (k)

45

Automotive Camera Applications

System
Rear-view Front-view Rear side view Front side view Drowsiness detection Front seat monitoring smart airbag Lane departure warning

System
Traffic sign detection Adaptive light control Obstacle detection Distance control Display control vary brightness of
display to ambient conditions

In-car communication Anti-theft system Camera navigation

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Pre-crash sensing

Timeline for Camera System Introduction

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Why Automotive Electronics?

350% 300% 250% 200% 150% 100% 50% 0% 1994 1995 1996 1997 1998 1999 2000 2001 2002

Automotive Computer Industrial Consumer Communication

Over the last 8 years Automotive was the fastest growing electronic segment of all with a CAGR of 12.9%
48

Q&A Please Contact Us to Support your Market Activities:

Chris Webber VP Automotive Electronics & Telematics Practice Tel: +44 1908 423 642 E-mail: cwebber@strategyanalytics.com Andreas Koehler Director, Northern Europe Consulting Tel: +44 1908 423 631 E-mail: akoehler@strategyanalytics.com Ian Riches Director, Automotive Electronics Service (AES) Tel: +44 1908 423 645 E-mail: iriches@strategyanalytics.com Joanne Blight Director, Automotive Multimedia & Communications Service (AMCS) Tel: +44 1908 423 647 E-mail: jblight@strategyanalytics.com 49