Average selling prices (ASPs) for all types of semiconductor sensors are forecast to fall by a compound annual growth rate (CAGR) of -5% in the next five years, which is double the rate of decline in the previous five years (2009-2014), says the new IC Insights report. Unit volume growth is expected to climb by a strong CAGR of 11.4% in the 2014-2019 timeframe and reach 19.1 billion sensor shipments worldwide in five years and revenue growth is projected to rise by an annual rate of 6.0% in the forecast period. In comparison, sensor sales grew by a CAGR of 17.1% between 2009 and 2014 to reach a new record high of $5.7 billion last year.

ASP erosion is partly a result of intense competition among a growing number of sensor suppliers pursuing new portable, consumer, and IoT applications. Sensor ASPs are also being driven much lower because many new high-volume applications require rock-bottom prices. The fall in prices is not only undermining revenue growth in the highly competitive sensor segment, but it is also now squeezing profit margins among suppliers.

Semiconductor sensors make up nearly two-thirds of the total sensor/actuator market segment. Acceleration/yaw sensors (i.e., accelerometers and gyroscope devices) remained the largest sensor category, in terms of dollar sales volume, accounting for 26% of the total sensor/actuator market. The acceleration/yaw sensor category continued to struggle due to price erosion and a significant deceleration in unit growth to just 1% in 2014, which resulted in a 4% drop in worldwide sales to $2.4 billion after falling 2% in 2013.

Magnetic-field sensors (including electronic compass chips) rebounded in 2014 with an 11% increase in sales to set a new record high of about $1.6 billion after slumping 1% in 2013. Pressure sensor sales remained strong in 2014, growing 15% to a new record-high $1.5 billion after climbing 16% in 2013.

IC Insights forcasted that total sensor sales growing 7% in 2015 to $6.1 billion after rising just 5% in 2014. Sensor shipments are projected to climb 16% in 2015 to 12.9 billion units after a 13% increase in 2014.

About 80% of the sensors/actuators market’s sales in 2014 came from semiconductors built with microelectromechanical systems (MEMS) technology—primarily pressure and acceleration/yaw sensors and actuator devices. MEMS-based product sales grew about 5% to a record-high $7.4 billion in 2014 from $7.0 billion in 2013.

Sensors accounted for 53% of MEMS-based semiconductor sales in 2014 ($3.9 billion) while 46% of the total ($3.5 billion) came from actuators, such as micro-mirrors for displays and digital projectors, microfluidic devices for inkjet printer nozzles and other application, radio frequency (RF) MEMS filters, and timekeeping silicon oscillators.

In terms of unit volumes, sensors represented 80% of the 5.1 billion MEMS-based semiconductors shipped in 2014 (4.1 billion) with the remaining 20% being actuators (about 1.0 billion).

After dropping slightly more than 1% in 2012 and being flat in 2013, sales of MEMS-based semiconductors recovered in 2014 with actuators ending a two-year decline, rising 7%, and pressure sensors continuing double-digit growth with a 15% increase in the year. Sales of MEMS-based sensors and actuators are forecast to grow 7% in 2015 to $7.9 billion and reach $9.8 billion in 2019, representing a CAGR of 12.0% from 2014.