© 2012

Gyroscopes and IMUs

for Defense, Aerospace & Industrial

Multiple technology changes are fueling booming market growth

KVH - CROWS II Sagem Embraer Senlution

Saab Training

System SeaTel Sensonor Kearfott

© 2012 • 2

Report Content

Introduction, Definitions & Methodology 5

Executive Summary 17

1. 2010-2017 Market and Competition Overview 38

– Global 2010-2017 gyroscope market

– Gyroscope market evolution by sensor grade (value & volume)

– Gyroscope market evolution by application category (value & volume)

– Gyroscope market evolution by level of integration (value & volume)

– Gyroscope market evolution by geography (value & volume)

– Gyroscope 2011 market Shares (value & volume) and competitive trends

– Accelerometer market evolution by application (value & volume)

– Accelerometer market evolution by level of integration (value & volume)

– Global 2010-2017 IMU market (value & volume)

– IMU 2011 market shares (value)

2. Industrial / Medical / Commercial naval / Offshore Applications 74

– Overview: key specifications, market breakdown and market shares

– Application description, trends, geographic breakdown, value chain and market evolution (value & volume) for: Stabilization systems / GPS

aiding - Mobile mapping / Commercial ship navigation - gyrocompass / ROVs - AUVs navigation for offshore / First responder systems / Drilling

(for oil and gas and mining survey) / Motion Capture - Life science / Other commercial applications

3. Commercial Aerospace Applications 108

– Overview: key specifications, market breakdown and market shares

– Application description, trends, geographic breakdown, value chain and market evolution (value & volume) for: Civil aircraft navigation / AHRS

for general aviation / backup instrument / Flight control for civil helicopters and aircrafts / Flight control - navigation for civil & paramilitary UAVs /

Space satellites, Spacecraft & skyrockets / Other commercial aerospace applications

4. Defense Applications 132

– Overview: key specifications, market breakdown and market shares

– Application description, trends, geographic breakdown, value chain and market evolution (value & volume) for: Platform stabilization (RCWS,

turrets, guns, gimbals..) / Missile guidance / Guided munitions - Bombs / Gyrocompass (ships, artillery…) / Military helicopters navigation -

stabilization / Military fighter navigation and flight control / Military transport aircraft / Defense UAV & UGV navigation – control / Armored

vehicle navigation / Combatant ship navigation / Strategic applications (submarine, ballistic missiles, specific space missions…) / Other defense

applications

© 2012 • 3

5. Gyroscope Technologies 178

– Technology classification and performance trends

– 2010-2017 technology evolution (value & volume)

– Technology evolution per gyro grade

– 1990-2020 pricing evolution by technology

6. Silicon / Quartz MEMS Gyroscopes 203

– MEMS gyro classification, principles and latest trends

– MEMS gyros: industrial chain, cost structure, pricing trends, market shares and production level by competitor

Report Content

7. Fiber Optic Gyroscopes (FOG) 219

– FOG classification, principles and latest trends

– FOG: industrial chain, cost structure, pricing trends, market shares and production level by competitor

8. Ring Laser Gyroscopes (RLG) 232

– RLG classification, principles and latest trends

– RLG: industrial chain, cost structure, pricing trends, market shares and production level by competitor

9. DTG & Other Mechanical, Vibrating Piezo Gyroscopes 243

– DTG & other mechanical, vibrating piezo gyroscopes: classification, principles and latest trends

– DTG & other mechanical, vibrating piezo gyroscopes: industrial chain, cost structure, pricing trends, market shares and production level by

competitor

10. HRG and Emerging Gyro Technologies 255

11. Accelerometer Technologies 261

– Technology classification, principles and latest trends

– 2011 technology breakdown

– MEMS accelerometer market shares

Conclusion and Perspectives 279

© 2012 • 4

Objectives of the Report

• The objectives of this report are the following:

– To provide market data on high performance MEMS gyroscopes and gyroscope-based systems (gyro

assemblies, IMUs…): key market metrics & dynamics

• Unit shipments and revenues by type of sensor

• Average selling price analysis and expected evolution

• Market shares for each category of application, for each technology and for each performance grade

– To provide application focus on key existing markets and most promising emerging ones

• Functions that are used, critical specification requirements, level of assembly and technology choices

• What are the major drivers, how will the market be like in 2017?

– To provide an analysis on the major technology trends:

• Evolution expected for the current technologies: level of performance, price…

• Insight about new technologies: AO / Cold atom, NMR gyros…

– To provide a deep understanding of inertial sensor value chain, infrastructure & players for the inertial

business

• Quasi-exhaustive list of sensor manufacturers worldwide with technology offer

• List of key integrators worldwide

• Industrial chain information for each application: who supplies to who

© 2012 • 5

Introduction New entrants are using game-changing MEMS IMUs to

target emerging markets

• Inertial Measurements Units (IMUs) is a large industry traditionally dominated by defense and aerospace

applications. 2011 was a stable year for IMUs with a market size of $1.75B.

• We expect more dynamic growth in this market near term because of two factors:

– In the defense and aerospace sectors: though the markets in the U.S. and Europe are best described as conservative and

mature, many new programs are being launched in Asia, Brazil, and the Middle East.

– Many new applications are fueling the growth of the IMU market, benefiting from significant technology evolutions, such as the

continuous improvement of MEMS IMUs.

• The IMU market is very concentrated; only a few big companies are dominant. Honeywell, Northrop Grumman

and Sagem are the clear leaders, but many newcomers are coming in to play, looking to enter the market with

low-cost MEMS-based products and a different approach to how things are done.

Honeywell 34.8%

Northrop Grumman

19.4% Sagem 9.4%

Others 36.4%

(detailed in the report)

2011 IMU market share (M$) (Total = $1.75B )

Yole Développement

© Aug. 2012

© 2012 • 6

Introduction Growth opportunities are positively impacting the

gyroscope market

• High-performance inertial sensors and systems is a dynamic market segment, as an ever-increasing number of platforms

require stabilization, guidance or navigation functions. The 2011 market for high-performance gyroscopes was estimated at

$1.29B, growing at a 4.3% annual rate, and is expected to reach $1.66B in 2017.

• However, this growth will not be global. Indeed, the most attractive opportunities will be concentrated in a select few

applications, geographies or technologies:

– Defense applications still account for half of the market and most players expect this to remain about the same, as budget cuts made in the

U.S. and Europe will be partially compensated by strong demand in Asia.

– Commercial aerospace represents close to 25% of the market. After a period of stability, an increasing number of business jet, helicopter and

civil aircraft orders will drive renewed inertial systems growth, starting in 2013.

– The remainder of the market (composed primarily of industrial, naval and offshore applications) will be the most dynamic area. While it will

take time to adopt new technol-ogies in the more conservative areas, new industrial applications are appearing with each passing day,

benefiting from the increasing availability of low-cost inertial solutions.

• This report describes in detail each application in terms of market size, competitive analysis, technical requirements,

technology trends and business drivers.

0

500

1000

1500

2010 2011 2012e 2013e 2014e 2015e 2016e 2017e

2010-2017 Gyro Market ($M)

Industrial/medical/commercial naval/offshore Commercial aerospace Defense

Yole Developpement © Aug. 2012

© 2012 • 7

Introduction MEMS and FOG drive the change in the technology mix

• Currently, optical gyroscope technologies still dominate the market by a wide margin. In

particular, Ring Laser Gyroscopes (RLGs) are largely used in navigation systems and tactical

guidance; one example is the Honeywell HG1700 IMU.

• Although RLGs will be robust for high-performance, Yole Developpement expects two other

technologies to make a large contribution to 2011-2017 growth: Fiber Optic Gyroscopes

(FOGs), which are currently very popular for stabilization applications, and should rapidly

progress to eventually replace other navigation technologies; and MEMS technology, which

will have the largest impact on the industry.

• New applications are enabled by low-cost MEMS sensors, and when it comes to

tactical grade applications, a lot of progress has been achieved in just the past few years in

terms of reliability. MEMS are now accepted in high-reliability environments, and are even

starting to replace FOGs and other technologies in tactical applications. Of course, other

technologies must be considered as well: Hemispheric Resonant Gyroscopes (HRGs) are

making progress and are now designed for navigation; Coriolis vibrating piezo gyroscopes are

finding increasing success in a large variety of end-markets while new disruptive gyro

technologies are still in lab-phase; and finally, DTG and other mechanical gyro technologies

are still used in some retrofit systems for 2-axis stabilization systems or for gyrocompass, but

this trend points to a decline.

• Many factors are shaping tomorrow’s competitive landscape: technology capabilities,

products’ maturity level, geography, value chain, and others. As such, competition trends are

carefully analyzed in this report. Honeywell is still the global leader by far, with great success

in RLG-based systems and successful deployment of MEMS technology. Northrop Grumman,

Sagem and other market leaders are next on the list with a variety of technologies and new

product lines that should have big market impact. Newcomers will play a role as well, from

startup companies developing disruptive sensors, to MEMS manufacturers, IMU integrators

and large end-users willing to pursue internal inertial technologies.

• This report highlights market share analysis by application field and technology, as well as

global company shipments and technology breakdown.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Industrial (>6°/h)

Tactical (0.5-5%/h)

Short termnavigation

(0.05-0.5°/h)

High-endnavigation /

strategic(<0.04°/h)

Shar

e in

val

ue

(%

)

Gyro bias stability

2011 Gyro Market ($M) - Techno breakdown

- Total = $1289M -

HRG / others

Other mechanical / vibratinggyrosDTG

RLG

FOG

Yole Developpement © Aug. 2012

© 2012 • 8

Introduction A report designed to be a reference in the 2012 inertial

sensor industry

• This report is the third update of Yole’s best-selling “IMU Markets” report, which was first released in 2008.

This latest edition is a completely new version, with substantial changes since the last edition:

– The scope of study is broader: stand-alone gyroscopes and assemblies of 2 or3-axis gyroscopes are accounted

for in the market numbers

– The market is quantified for each gyroscope technology, and each company’s yearly shipments are estimated

– Market metrics are provided for each grade of gyroscopes: each application is positioned according to

performance level and corresponding market size

– Applications are described in a more synthetic way in order to provide rapid access to key information (functions,

specification, technical solution, geography, trends, and market evolution) and graphical representation of the

industrial chain

• This report combines the best of Yole’s knowledge in the high-performance inertial sensor industry. Yole

regularly participates in industry conferences and tradeshows worldwide, and has close relations with most

market leaders. This report’s data has been validated by industry experts and augmented by the expertise of

Mike Perlmutter, a recognized expert in navigation. With a totally different format than before, this report

synthetizes the status of the 2012 inertial sensor industry in a thorough and completely new way.

© 2012 • 9

Scope of the report

• « High performance » inertial sensors

– This refers to the applications: we take into account all the inertial sensors

except the consumer / mobile and the automotive applications

– It means that we take into account industrial, medical, aerospace, defense

applications (even industrial applications are considered as “high-performance” applications, as

opposed to consumer ones)

– In some cases: « consumer -grade » MEMS gyroscopes (for instance few °/s bias

stability) are used in industrial applications this is part of the report

• To simplify the representation, the performance level has been divided in 4 parts:

– The only parameter which is considered is the bias stability

• In the 50°/h range: « industrial » grade (but it doesn’t mean that this is industrial applications: for

instance many missile and bomb guidance require moderate bias stability and enter in this category)

ability to get data on angular rates / on motion

• In the 1°/h range: « tactical» grade possibility to get angles

• In the 0.1°/h range: « short term navigation » grade possibility for short term navigation (for GPS

outage) and azimuth detection

• In the 0.01°/h range: « high-end navigation & strategic » grade ability to navigate

– Day to day bias stability is considered for navigation grade, this is the most

significant parameter

– In-run bias stability is used for industrial and tactical grade because:

• In the past 20 years, MEMS has appeared and expressed performance in terms of « in-run » parameters

• Use of inertial sensors is now in conjunction with GPS, meaning that bias repeatability in not significant

anymore (for tactical / industrial grade)

– Other parameters need to be considered as well: depending on the application

other parameters such angular random walk or scale factor will be more

important than parameters

Gyroscope

In-Run (for industrial / tactical)

or day to day (for navigation /

strategic) Bias Stability

Corresponding

Grade

100°/h

5°/h

1°/h

0.5°/h

0.1°/h

0.05°/h

0.01°/h

0.0001°/h

Hig

h-e

nd

navig

atio

n

& S

trate

gic

Definition of application grades

Ta

ctic

al

Sh

ort te

rm

Navig

atio

n

Ind

us

trial

© 2012 • 10

Scope of the report

PRICE level

LE

VE

L O

F IN

TE

GR

AT

ION

IMU = 3 mutually

orthogonal gyros

and accelerometers

Cluster of

gyroscopes

Clusters of

accelerometers &

gyroscopes

INS

(Inertial Navigation

System IMU + Kalman

filter)

Cluster of

accelerometers

Gyroscopes Accelerometers

INS / GPS ( fusion with GPS)

-

-

+

+

AHRH (Attitude and Heading

Reference System

IMU + magnetometer +

software)

IMU market (standalone + IMUs

integrated in systems

such as AHRS, INS…)

Gyro market = Market for standalone gyros / assemblies of gyros

+ market for gyros integrated in IMUs and other

systems (AHRS, INS…)

ADAHRS (Air Data Attitude &

Heading Reference

System fusion with

air data)

GADAHRS (GPS aided ADARS

fusion with GPS)

© 2012 • 11

EXAMPLE OF APPLICATION DETAIL: CIVIL AIRCRAFT

NAVIGATION

© 2012 • 12

Civil aircraft navigation Application description

Function:

• Main purpose: navigation system for commercial

aircrafts, cargos and business jets

• Additional feature: to monitor deformations of the body

• Flight test instrumentation systems when testing the

aircrafts (low quantity: <1% of the fleet)

Key specifications

• 0.01°/h bias repeatability

• 0.001°/h for test systems

• Civil aero certification

• Long-term supply guarantee

Inertial solution

• Integrated in IMU/INS with high-perf electromechanical

accelerometers

• Used in redundant systems: 2 INS for narrow-body

aircrafts to 3 INS for large-body aircrafts

• Hybridation with GPS (which is in a separate package

for more flexibility)

Technology trends

• RLG technology dominates, FOG is an alternative

• HRG is emerging

• Slow technology change in avionics because of flight

certifications. Not short term wide adoption of MEMS

• Traditionally: aircraft maker select the primary INS

maker (often Honeywell) and the second source as

alternative (often NG) so that airline companies can

choose. This changed recently in some cases: Airbus

selected only Thales for A350 and only Sagem for

A400M

Key gyro players • Honeywell, Northrop Grumman, Thales, Sagem (HRG

INS named GADIRS)

Airbus A320 Neo

Boeing 787 Dreamliner

© 2012 • 13

Civil aircraft navigation Market data

Major gyro integrators • Gyro integrated in assemblies or IMUs / INS by: Honeywell, Northrop Grumman, Thales, Sagem…

• End-users: EADS Airbus & ATR, Boeing, COMAC, Dassault Aviation, Bombardier Learjet, Embraer,

Boeing…

Geographical

description

• For gyros: North America 85% market / Europe 10% / Asia 5%

• For end-users: North America 50% market / Europe 40% / Asia 10%

Market drivers

• Steady growth of the market for the next 5 years (3-5%/y)

• Retrofit market is significant: it is estimated that 25-30% of the market correspond to upgrades. Indeed

cycle time for such electronics is estimated to 10-15 years, INS are thus changed 2 or 3 times in the life

time of an aircraft

• New platforms successfully got massive orders (A320 Neo, B787 Deamliner, COMAC…) leading to a

boom in the inertial market in 2013-2014 timeframe

• Recovery expected in the bizjet sector, after a bad 2008-2012 period

2 010 2 011 2012e 2013e 2014e 2015e 2016e 2017e

K Units 18.3 18.7 19.8 21.0 22.0 22.9 23.6 24.3

0

5

10

15

20

25

30

Mar

ket

(Ku

nit

s)

2010-2017 Civil aircrafts navigation - Gyro Market (Kunits)

Yole Developpement © Aug. 2012

2 010 2 011 2012e 2013e 2014e 2015e 2016e 2017e

$M 141.3 143.4 151.2 159.5 166.6 172.4 176.7 181.1

0

20

40

60

80

100

120

140

160

180

200

Mar

ket

($M

)

2010-2017 Civil aircrafts navigation - Gyro Market ($M)

Yole Developpement © Aug. 2012

© 2012 • 14

Civil aircraft navigation Value chain

Airbus

Boeing

COMAC

…

Honeywell

Gyroscopes IMU/INS Aircraft maker

Airbus Thales

Sagem

EADS ATR, Dassault Aviation,

Bombardier Learjet, Embraer…

Airbus

Boeing

…

Northrop Grumman

© 2012 • 15

Companies Cited in this Report

Al Cielo, Analog Devices, AOSense, Arazim, Astrium, Autoflug, CASC China

Aerospace, Colibrys, Doosan, Elektropribor, Emcore, Endevco, Epson

Toyocom, Fitzoptika, Freescale, Garmin, GEM Electronica, Gladiator

Technologies, Goodrich / AIS, Hitachi, Honeywell, IAI, iMAR, Innalabs,

InterSense, InvenSense, iXBlue, JAE, Kearfott, Kongsberg, KVH, L3

Communication, Litef, Lumedyne Technologies, MEMSense, Microstrain,

Moog / Crossbow, NG Italia, Northrop Grumman, Optolink , PCB Piezo, Perm,

Physical Logic, Raytheon Anschütz, Sagem, SBG Systems, Schlumberger,

Senlution, Sensonor, Sensorex, Silicon Design, Silicon Sensing System, ST

Microelectronics, Systron Donner Inertial, Tamagawa, Teknol, Thales, Tokyo

Keiki, Tronics, VectorNav, VTI, Watson Instruments, XSens …

© 2012 • 16

Who Should be Interested in this Report?

• High-performance accelerometers and gyroscope suppliers

– Understand the system level technology trends and

requirements for each application

– Evaluate market potential for your components

depending on performance and technology

– Understand the differentiated value of your products and

technologies

– Identify new business opportunities and partners

– Monitor and benchmark your competitor’s

advancements

• IMU module and AHRS / INS suppliers

– Evaluate the market potential of your product portfolio

– Define diversification strategies on new applications

– Find the best technologies to integrate and the best

suppliers depending on your target markets

– Identify new business opportunities and partners

– Have an exhaustive analysis of the competition on a

broad range of IMU field

• Material supplier, manufacturing service companies

– Spot new business opportunities and prospects

– Understand the level of activity of your customers

– Understand what are the applications that will drive the

volumes in 2017

• Integrators of inertial solutions, government agencies

– Find the best technologies to integrate and the best

suppliers depending on your target markets

– Understand what will be the future applications to develop

by taking benefit on the recent advances in inertial

technologies

– Define technology roadmap / evaluate the benefits of

using new technologies in end system, design

architectures for the next generation of systems

– Screen potential new suppliers able to provide new

functionalities, or cost and size savings

• R&D centers

– Evaluate market potential of future technologies and

products for new applicative markets

– Identify the best candidates for technology transfer

• Financial & strategic investors

– Understand the structure and value chain of the high-end

inertial industry

– Estimate the potential of new technologies

(tactical/inertial navigation MEMS, navigation-grade

HRG…)

– Get the list of main key players and emerging start-ups of

this industry worldwide

© 2012 • 17

Available MEMS Reports

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© 2012 • 18

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