The North American Machine Vision Market

Market Trends, Developments and Opportunities

Paul Kellett

Automated Imaging Association

Director – Market Analysis

1

I. Machine Vision Definition

� What is machine vision?

All industrial and non-industrial applications where hardware and software

capture and process images to guide the operation of devices

� A machine vision (MV) system typically involves:

� lighting to render visible the object to be imaged

� optics to focus the image of the object

� camera to “see” the image

� imaging board to capture the image from the camera and convert it into

data

�software that is used to manipulate the digitized image to optimize

operational decision-making.

� MV systems involve either integrated, discrete components or integrated

functions (“smart cameras”)

� Machine vision is not limited to the factory floor but instead extends to

new, innovative applications.

2

Machine Vision is an Automation Technology that Captures and Processes

Images to Guide the Operation of Devices in Both Factory-Centric and

Emerging Sectors of the Economy.

Machine Vision Performs a Wide Range of Generic Functions

Across Many Industries

II. Generic Machine Vision Functions

3

IndustriesCharacter

Recognition

Part

Recognition

2D Symbol

Reading

Pattern

Recognition

Absence/

PresenceOther

Semiconductor � � �

Electronics � � � �

Food

Wood Products �

Container � �

Printing

Automotive � � �

Pharmaceutical �

Medical Device

Biometrics �

Advanced Traffic Management � �

Laboratory Automation/ Drug

Discovery � �

Medical Imaging �

High-end Surveillance � �

Waste Management

Solar Cell and Panel

Advance Battery Technology

Wind Turbine Manufacturing

Fuel Cell Manufacturing

Robotic Warehousing �

4

Industries2D, 3D

Metrology

Surface

Flaw/

Cosmetic

Analysis

Mechanical/

Electronic

Assembly

Verification

SortingVisual

Servoing

Location

Analysis

Semiconductor � � �

Electronics � � �

Food � �

Wood Products � � �

Container �

Printing �

Automotive � � � � �

Pharmaceutical �

Medical Device �

Biometrics

Advanced Traffic Management �

Laboratory Automation/ Drug

Discovery � �

Medical Imaging

High-end Surveillance

Waste Management �

Solar Cell and Panel � � � � �

Advance Battery Technology � � � � �

Wind Turbine Manufacturing � � � �

Fuel Cell Manufacturing �� � � �

Robotic Warehousing � �

Machine Vision Performs a Wide Range of Generic Functions

Across Many Industries

II. Generic Machine Vision Functions (Continued)

5

III. Machine Vision Value Proposition

� Machine vision enables:

� increased productivity

� greater efficiency

� enhanced product quality

� The value provided by machine vision makes it essential in an

increasingly competitive world market.

� We believe the value provided by machine vision insures an upward,

long-term trend in machine vision sales with only temporary deviations

due to the business cycle.

MV Trend Line

Cyclical Variation

Time

* MV Financial Transactions: Sum of component and system sales (including smart cameras)

Despite Recessions the Underlying Trend in MV Sales has Remained Positive

Because of the MV Value Proposition.

MV Overall North American Sales* in $ Millions (USD)

MV Impact of

Great

Recession

MV Impact of

Great

Recession

MV Impact of

2001

Recession

MV Impact of

2001

Recession

III. MV Value Proposition

6

IV. Machine Vision Markets

Components Systems

Cameras are the Largest MV Product Market. ASMV (Application-Specific MV

Systems are the Large System MV Product Market. Product Shares have not

Changed Much Over Time.

Relative Size Based on Sales Volumes

7

IV. Machine Vision Markets

8

Most Important Industries for MV sales are Semiconductor, Automotive,

Wood and Food.

Estimated North American Annual MV Financial Transactions* by Industry

Source: Based on 2010 AIA Annual MV Study

* Overall sales activity: Sum of component and system sales (including smart cameras)

* Overall sales activity: Sum of component and system sales (including smart cameras)

Following the Great Recession in 2009, Machine Vision Sales Activity in North America,

Returned to the Historical Trend Line in 2010.

2011 Growth Expected at 5.3%. 2012 Growth Expected to be Similar.

2011-12 Forecast - MV Financial Transactions* in $ Millions (USD)

+ 12.6%

+ 6.2%

+ 4.6%+ 2.1%

MV Impact of

2001

Recession

MV Impact of

2001

Recession

- 7.2% - 0.2%

+ 1.2%

-29.2%

+60.2%+5.3%

Note: Growth rates shown are based on as reported sales figures and not on weighted growth rates.

V. MV Market Growth – North America

9

MV Impact of

Great

Recession

MV Impact of

Great

Recession

V. MV Market Growth – North America

10

Trend Lines for Components and Systems are Positive Despite Recessions

VI. Economic Impacts on MV Market

US Manufacturing Sector – Purchasing Manager’s Index (PMI)E

xp

an

sio

nC

on

tra

ctio

n

MV Sales are Closely Tied to the Performance of the Manufacturing Sector.

Manufacturing Has Lost Some Steam in the Latter Part of 2011.

11

VI. Economic Impacts on MV Market

Impact of the Euro Crisis

The Business Cycle of the US and Eurozone are Highly Correlated.

What Happens in Europe Does not Stay in Europe.

The Bottom Line: The Euro Crisis Could Severely Affect North American MV Sales.

R = .979

12

VII. Machine Vision Market Opportunities

13

Technology-Related and Geographic Market Opportunities Abound.

Established Industries also Represent Important Opportunities.

� Energy Technology-Related• Solar Cell Manufacture (inspection, measurement, sorting, control of location

• Fuel Cell Manufacture (assembly verification, inspection, metrology)

• Wind Turbine Manufacture (assembly verification, inspection)

• Automotive Lithium Battery Manufacture (robotic guidance, inspection, metrology)

� Other Technology-Related• Security (biometrics, license plate recognition, cargo inspection, etc.)

• Drug Discovery and Lab Automation

• Advanced Traffic Control (automated toll, traffic congestion monitoring, etc.)

• Recycling (automated material sorting)

• Medical Imaging (digital X-rays)

� Geographic Market-Related• China, India, Brazil, Russia

� Established Industries• Increase penetration rates of established industries (product modularization and mass

customization)

• Building the factory of the future (MV will benefit from increased factory automation)

VIII. Summary and Conclusions

14

� Machine vision offers a wide range of generic functions that enable many

applications in both factory-centric and non-industrial segments of the

economy.

� These applications, in turn, provide value to businesses in terms of increased

productivity, greater efficiency and enhanced product quality (MV value

proposition).

� The MV value proposition has resulted in positive trend in MV sales in the

longer-term, despite short-term, cyclical recessionary impacts.

� In 2009, the Great Recession severely affected MV market growth, but in 2010

the market recovered strongly with sales returning to the historical trend line.

� To understand the effects of the economy on MV product markets, it is

necessary to focus on the performance of manufacturing sector.

� In the US, the manufacturing sector is still expanding, but it clearly has lost a lot

of steam, and this in turn has decreased MV sales growth.

� Looking ahead, the euro crisis could also severely affect North American MV

product sales.

� Market opportunities for MV companies abound.

The Future Looks Very Bright for Machine Vision but that Doesn’t Mean There

Won’t be Bumps in the Road.