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Smart DIY: Why do companies design their own sensors?

Posted: 08 Oct 2014 ?? ?Print Version ?Bookmark and Share

Keywords:sensors? vertical integration? original equipment manufacturer?

Many companies are now resorting to major research and development effort to design and even manufacture their own sensors, leading us to find out from companies and analysts why it's good to brew your own sensors.

Some companies just covet vertical integration, especially in Asia, where Omron Corp. makes everything in its popular blood pressure cuff, from the LCD display to the pressure sensor inside. Many Japanese companies are so vertically integrated that they even own their own banks to gain favourable loan rates and easy money for starting up ventures. It's not hard to understand why these companies make their own sensorsverticalisation is in their blood.

Wafer-level packaging

Wafer level packaging uses simplified construction to make thousands of infrared, vacuum-packaged sensors at the same time. (Image: Raytheon)

The second most logical reason is to add products to the catalogue. Omron sells its LCD modules to others needing small displays for meters. In the case of MEMS microphones, it sells wafers to other companies that want to be in the game but have not developed proprietary designs, including STMicroelectronics.

Likewise, Sony is a very vertically integrated company that acts as both an original equipment manufacturer (OEM) and a semiconductor supplier. Sony's biggest success in components is as a supplier of image sensors. It also supplies MEMS microphone and consumer-grade gyroscopes, but they have a difficult time competing against ST or InvenSense offerings.

In the wearable space, OEMs often assemble optical pulse sensors by licensing the technology and buying the parts themselves. For instance, many OEMs license pulse sensor technology from Valencell Inc. or Philips NV and then assemble the sensor module themselves.

In the US, dozens of companies design, develop, and sometimes manufacture their own MEMS and other sensors (or have a foundry build them). These companies range from industrial giants to consumer specialists, but their reasons for building their own sensors are different.

"We must distinguish the industrial companies such as GE and Honeywell on the one hand and the consumer companies such as Apple and Nike on the other side," said Jrmie Bouchaud, senior principal analyst for MEMS and sensors and industrial electronics at the IHS electronics and media research and analysis group.

"GE and Honeywell are system companies focused on the industrial and aerospace markets where they need to develop sensors for their own use," Bouchaud said. "They have often specific requirements for their industrial, medical, or mil-aero systems, and they have to develop their own technology to secure access to the parts. This is often the case especially in aerospace, with EADS, Ratheon, Northrop Grumman, Rafael, [and] BAE Systems, which all have a MEMS/sensor R&D and often production."

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