Thermal imaging industry: the growth propels a new company into the top three

In 2017, the number of shipped uncooled infrared (IR) imagers exceeded a million units for the first time! And Yole Développement (Yole) is expecting almost 15% volume growth for 2018, with 2 million units set to be shipped annually within five years. With military and security applications beginning that market, growth is now coming from applications including personal vision systems, professional building workers, roads, maintenance, do-it-yourself (DIY) applications of thermography, including using ruggedized phones with thermal imaging embedded.

The market research and strategy consulting company, Yole published its dedicated report Uncooled Infrared Imagers Market and Technology Trends 2017 to highlight such growth, but now the leadership in this market is changing.

At the uncooled infrared imager level, FLIR and ULIS have long been undisputed leaders. Now, a third player, SEEK Thermal, is entering the top 3 and changing many things. Yole’s analysts invite you to discover the status of thermal imaging market industry, its issues and the impact of the SEEK Thermal entrance.

Over the past ten years, the uncooled infrared (IR) imaging market has been driven primarily by defense applications, then by commercial ones. Currently, growth comes through thermography, surveillance, personal vision systems (PVS) and security markets. But the high cost of the technology has restrained the use of microbolometers to niche and medium volume applications. The cost/performance ratio has not yet opened the way to consumer applications.

However, this is changing. Manufacturing costs are decreasing, with the introduction of new manufacturing processes such as wafer level optics, wafer level packaging, and silicon lenses. This, coupled with a growing public awareness of the benefits for infrared vision, is opening new doors. One example is the 2016 commercial introduction of FLIR’s CATS60, the first smartphone with infrared vision capability, targeting the professional worker and DIY market.

FLIR and ULIS have shared more than 70% of market volume in recent years. But now a strong third player has joined them, and may even be second placed for unit volumes in 2018. SEEK Thermal is growing nicely, with hundreds of thousands of shipments expected for 2018, supported by a new 3000 square meter fab. SEEK has positioned its products in the commercial market, but not the consumer market yet, with a strong marketing approach, tailoring product price and performance for hunters, farmers, and maintenance experts.

SEEK Thermal is following a road that has been paved in just the last 10 years, with uncooled IR imaging gradually entering more commercial applications. Caterpillar has just released the new CATS61, with Far IR (FIR) imaging capabilities, the second version of the very successful 2016 product. It uses FLIR’s Lepton core, and FLIR’s MSX for high definition images, mixing IR and visible images. CATS61 also introduces new environmental sensors for volatile organic compounds (VOCs) and humidity in the ruggedized phone. This provides a larger palette of applications and again pushes towards “in the field” professional applications.

It is clear that Caterpillar’s products have significantly contributed to uncooled FIR growth over the past two years, with hundreds of thousands of units shipped. This is totally different to near IR sensing, used in 3D sensing applications and Apple’s FaceID product, which shipped multiple tens of millions last year and will likely ship even more in 2018.

FLIR and ULIS, the two historical IR leaders, also grew significantly in 2017. ULIS’ sales have grown 20% per year since its founding, with a target of more than €70M last year. FLIR is a very large company, with $1.8B sales in 2017 and the $2B sales level in sight in the very near future. These companies’ leadership might be endangered by the “new kid on the block”, SEEK Thermal, in terms of shipment volumes.

It’s also very interesting to notice that these three companies have totally different business models. FLIR is in all applications, from IR core modules, including the famous Lepton, to very complex and expensive cameras, with a mix of internal and external manufacturing. ULIS delivers imagers and cores to its customers, with an integrated device manufacturer (IDM) business model. SEEK Thermal is a fabless company delivering plug-and-play modules for mobile phones, providing its own hand-held cameras and also multiple tailored developments. Clearly, SEEK is targeting the professional market, fighting to decrease camera prices to reach more customers. That’s why SEEK Thermal is shipping so many units, with this push to affordable but good hand-held systems.

It is also interesting to look at the difference between FLIR, ULIS and SEEK Thermal product designs. Yole’s partner company System Plus Consulting has done multiple reverse engineering and reverse costing analyses exploring these differences.

Another big market opportunity is automotive and autonomous driving. The possible use of FIR for future autonomous and robotic cars is becoming clearer, because FIR can detect animals in all weathers. It would be a necessary redundant imager for more safety. IR imaging is already in multiple car models but with limited volumes. FLIR and Autoliv have the lion’s share of this market

Consumer applications will come sooner rather than later. Work must still be done to reduce the cost and size of the IR camera to be integrated into non-professional phones, but this is clearly now possible. Another big new market to come will be to support autonomous driving and Advanced Driver Assistance Systems (ADAS).

The future is bright for FIR markets – so much so that there is no need for night vision to see it! You can find out more details in Yole’s latest report on thermal imaging Uncooled Infrared Imagers Market and Technology Trends 2017.

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RELATED EVENT

3^rd Executive Infrared Imaging Forum

Heading to 1 Million Units Shipment!
The Forum took place Sept 7 in Shenzhen, China. Get access to the presentation made by Yole and find more information about the event here.