Gyroscopes and IMUs - Yole

1 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 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) / 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.

2 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 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.

3 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, ) / Missile guidance / Guided munitions - Bombs / Gyrocompass (ships, ) / 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 ) / Other defense applications 2012 3 Technologies 178 Technology classification and performance trends 2010- 2017 technology evolution (value & volume)

4 Technology evolution per gyro grade 1990-2020 pricing evolution by technology / 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 Optic Gyroscopes (FOG) 219 FOG classification, principles and latest trends FOG: industrial chain, cost structure, pricing trends, market shares and production level by competitor Laser Gyroscopes (RLG) 232 RLG classification, principles and latest trends RLG: industrial chain, cost structure, pricing trends, market shares and production level by competitor & Other Mechanical, Vibrating Piezo Gyroscopes 243 DTG & other mechanical, vibrating piezo Gyroscopes : classification, principles and latest trends DTG & other mechanical, vibrating piezo Gyroscopes .

5 Industrial chain, cost structure, pricing trends, market shares and production level by competitor and Emerging Gyro Technologies 255 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, ): 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 ?

6 To provide an analysis on the major technology trends: Evolution expected for the current technologies: level of performance, Insight about new technologies: AO / Cold atom, NMR 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.

7 2011 was a stable year for IMUs with a market size of $ 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 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.

8 Honeywell Northrop Grumman Sagem Others (detailed in the report) 2011 IMU market share (M$) (Total = $ ) Yole D veloppement 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 $ , growing at a annual rate, and is expected to reach $ 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 and Europe will be partially compensated by strong demand in Asia.

9 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.

10 050010001500201020112012e2013e2014e2015e 2016e2017e2010- 2017 Gyro Market ($M) Industrial/medical/commercial naval/offshoreCommercial aerospaceDefenseYole 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.