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10 Apr 2024
Analyst report suggests new applications will help propel steady growth towards a $9BN market in 2029.
Chinese producers accounted for half of global shipments of thermal imaging cameras for the first time last year, as the market delivered annual growth for the first time since the Covid-19 pandemic.
That’s according to a new report from French analyst group Yole Intelligence, which also predicts that the market will grow steadily from around $6.5 billion currently to $9.1 billion by 2029.
The firm’s latest figures show how the initial response to the pandemic boosted the market to more than $7 billion in 2020, before shrinking over the next two years.
China milestone
“In 2023, the thermal imaging market saw continued growth, fueled by traditional commercial uses,” reckons Yole, adding that current trends match those observed before the Covid-19 pandemic.
“Notably, prices have shrunk considerably at the microbolometer level, increasing the market size,” it added. “Chinese market leaders have narrowed the performance gap with established players, boasting high production capacities and competitive pricing.”
Last year saw Chinese companies such as InfiRay and Hikmicro maintain their upward trajectory as they prioritized volume production - leading to their increasing dominance in the industrial and consumer sectors.
“The Chinese thermal imaging ecosystem reached a significant milestone, accounting for 50 per cent of global thermal imager shipments,” found the Yole team, with lead analyst Alex Clouet adding:
“While growth in the industrial market remains robust, it’s counterbalanced by lower prices resulting from a higher proportion of lower-tier systems. Demand and product mix is shifting from high-end handheld cameras towards lower-end fixed-mount ones.”
Mirroring technology trends seen elsewhere, western competitors have retained their dominance of higher-margin applications in areas like security, defense, and firefighting - with geopolitical effects and the ongoing US-China trade war having an inevitable impact.
Recent export restrictions imposed by China on germanium materials could have an impact on the camera lens supply chain, Yole suggested.
Emergency braking
Helping to drive market growth over the next few years will be applications in the automotive and consumer wearable sectors, with Yole saying there are four main markets fueling demand for thermal detector technologies.
“The consumer market with thermopile penetration into wearables has begun,” reports the Yole team. “The automotive market also presents growth opportunities linked to the electrification of vehicles.”
A significant uptick is also anticipated in industrial markets linked to energy efficiency, along with growing interest in gas sensors used in smart appliances, and new heating, ventilation, and air conditioning (HVAC) regulations.
On the flip side they expect the medical market to decline a little over the next few years, as it is currently “saturated” following the pandemic-related surge in demand.
Emerging automotive opportunities have been opened up by regulations covering automated emergency braking (AEB) features in the US - something that Yole thinks may also happen in Europe - with the emergence of startups such as Israeli firm Adasky and Rochester-based Owl touting long-wavelength infrared (LWIR) imagers, in contrast with other sectors where established players like Excelitas and Teledyne FLIR continue to dominate the scene.
“The automotive market is poised for growth due to upcoming stringent regulations in the US concerning AEB systems, potentially enforced by 2028,” said Yole. “The decision on these regulations, expected in the first half of 2024, holds significance for widespread adoption.”
Technology trends
On the technology side, Yole has observed a shift among the thermal detectors being used. “Pyroelectrics were leading the market,” it reports. “We are observing a change in the balance from the thermopile market that will grow faster and lead the thermal detector market in value.
“Calumino, Jon De Tech, Meridian Innovation, and ST Microelectronics developed innovative solutions that could be boosted by AI for various applications and compete with entry-level microbolometer technology.”
Emerging applications include continuous temperature monitoring in wearables, with a view to offering healthcare insights.
The other key trend is a continuation of the move to smaller pixels, meaning smaller chip sizes and lower costs through volume production - something of particular significance to the cost-sensitive automotive sector.
“Smaller pixels are also needed to increase the resolution of thermal cameras designed for longer-range imaging in defense and consumer PVS [personal vision system] applications,” added Yole.
• Yole analyst Alex Clouet is scheduled to present findings from the company’s market research during SPIE’s Defense and Commercial Sensing event taking place near Washington, DC, later this month. His talk, entitled “Infrared for industrial machine vision - opportunities and challenges”, takes place April 23.
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