Machine Vision

Market Analysis of 2015

Isabel Yang CHINA Machine Vision Union

1.Machine Vision Market Analysis of 2015

Content 1

Revenue of Machine Vision Industry in China

Year 2015, China machine vision market make a 19.5% growth.

Between 2012-2015 China MV industry reached 22.4% CAGR.

Two Major driving factors for 2015 China growth, especially in electronic industry.

• Extensive Vision system requests from final assembling transfer to key components inspection, battery etc.

• Focus from manufacturing process to quality control process for better quality and cost saving.

1,976

2,565 3,038

3,631

18.4% 19.5%

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

0.2

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2012 2013 2014 2015

Revenue Growth

2012-2015 (Unit: Million Yuan)

Product Segmentation of MV Industry Sales in China

31.2%

25.3%

14.5%

9.3%

8.0%

4.8%

3.1%

2.1%

1.7%

0% 5% 10% 15% 20% 25% 30% 35%

Cameras

Application-specifid Vision Systems

Lighting

Optics

Smart Cameras/Compact Systems/Vision Sensors

Frame Grabbers/Vision Processor Boards

Other Vision Accessories

Interfaces and Cables

Vision Software

Camera occupies the largest segment of the market, accounting for about 31%

The application-specific vision systems occupies 25% market, continuously high growth .

Optical market share reduced 9%, for some local low cost products get more share.

Other vision products share a 19.7% market

4%

3%

8%

The Growth of MV Industry Sales in China

Smart Cameras / Compact Systems get the highest growth rate at 28%.

Cameras get the second largest growth the same with application system, at 24% ratio.

Optical, Lighting and frame grabbers all get around 20% growth.

1,133

919

526 338 290

174 113 76 62

24% 24%

19%

23%

28%

21%

6% 7%

13%

0%

5%

10%

15%

20%

25%

30%

-

200

400

600

800

1,000

1,200

Cameras

Application-specifid Vision System

s

Lighting

Optics Sm

art Cam

eras/Compact

Systems/Vision

Sensors

Frame

Grabbers/Vision Processor Boards

Other Vision

Accessories

Interfaces and Cables

Vision Software

2015revenue

2015growth

Million RMB

Sales Segmentation of Manufacturing and Non-Manufacturing in China

85.3%

14.7%

Manufacturing Non-manufacturing

Manufacturing markets keep more than 85% share of the market.

Non- Manufacturing investment slow down partly due to government

anti-corruption carrying out.

83%

17%

Year 2015 Year 2014

Major Market Segmentation - Manufacturing Sectors

Electronics and printing are the 2 biggest markets, at the same time with good growth.

FPD, robot and battery are the top3 rapid growth industries, get more than 25% growth.

Automotive, medical, packaging, semi and food are the 5 middle size and middle growth inducties.

598

375 375

251 198 189 186 177

149 136 84 71 71 71 62

34 31 22 19

21%

21%

33%

11%

23%

15% 18%

12%

29%

14%

4%

26%

12% 12%

-4%

5%

-1%

3%

-3%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

-

100

200

300

400

500

600

7002015 Revenue Growth

Million RMB

Major Market Segmentation - Non-manufacturing Sectors

Driven by the government, railway become the biggest and fastest growth market.

Military， ITS and life science are the 3 big market and all with more than 25% growth.

MV Widely used in Microscopy and Life Sciences, it occupies 15% market.

137

123 112

80

26 25 15 15

37%

27% 35%

25%

8%

37%

3%

-3%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

20

40

60

80

100

120

140

160

Railway MilitaryDefense

ITS MicroscopLife Science

Security LogisticsPostal Sorting

DocumentProcessing

Entertainment

2015 Revenue GrowthMillion RMB

2. Brief Introduction of the Main Industry of CHINA

Content 2

Industry Revenue of Electronic Component Manufacturing

8,821

9,917 10,304

11,228 11,675

12.4%

3.9%

9.0%

4.0%

0%

2%

4%

6%

8%

10%

12%

14%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2011 2012 2013 2014 2015

Revenue Growth

2011-2015, CAGR of the sales revenue is 7%， 2015, sales revenue keep on growing at average 4%. Machine vision keep high growth by manufacturing structure transformation.

Machine vision get

Million RMB

33% growth in FPD

18% growth in semiconductor

Outdistance the normal growth

Industry Revenue of Integrated Circuit Manufacturing

3,045 3,149 3,310

3,518 3,681

3.4%

5.1% 6.3%

4.6%

0%

1%

2%

3%

4%

5%

6%

7%

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2011 2012 2013 2014 2015

Revenue Growth

2011-2015, CAGR of the sales revenue is 4.8%， In 2015 sales revenue achieve 4.6% growth. Machine vision keep high growth by manufacturing automation updates.

Million RMB

Machine vision get

21% growth in electronic industry

Industry Revenue of Automobile and Auto parts in China

6,464

7,308 8,012

8,595 9,175 13.1%

9.6%

7.3% 6.7%

0%

2%

4%

6%

8%

10%

12%

14%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

2011 2012 2013 2014 2015

Revenue Growth

2009-2015, China automobile manufacturing industry growth slows down from around 10% to 5%-6% percentage. Machine vision keep high growth by higher quality of requirements.

20,005

23,011

26,017

29,074 30,744

15.0%

13.1%

11.8%

5.7%

0%

2%

4%

6%

8%

10%

12%

14%

16%

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2011 2012 2013 2014 2015

Revenue Growth

Automobile Auto parts Million RMB Million RMB

Machine vision get 11% growth in automotive

3.Forecast and main driven factors in the future.

Content 3

Revenue Forecast of Machine Vision Industry

4357

5316

6379

7782

9494

20%

22%

20%

22% 22%

19%

20%

20%

21%

21%

22%

22%

23%

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2016E 2017E 2018E 2019E 2020E

Revenue Growth

21%-22% estimated CAGR in term of sales revenue in China in next five years.

Domestic Industry Scale will surpass 10Billions after 2020, roughly $1.5Billions

China will driver Asia(Not include Japan) to the largest market before 2020.

2016-2020 (Unit: Million Yuan)

Key driven factor – China Policy Made in CHINA 2025

• Before 2025, Improve the intelligent manufacturing abilities.

Reduce 50% making cost • Shorten 50% production cycle • failure goods reduce 50%。

A technology fusion between Information tech and manufacturing tech.

Union development and industrialization of Intelligent device and smart products by Government, Universities and Enterprises.

Replacing workers with Robots in key posts, Building demonstration Smart factory and smart workshop.

Stimulate advanced region/application/enterprises to apply intelligent process management, smart machine, new manufacturing mode and mart service.

Build up the Intelligent manufacturing platform

Automation Upgrade Quality is key to win

• CHINA” Middle Class” requests • Worldwide Competition. • Process quality control for costs

saving

New manufacturing process

•Leading role in IT new products with innovation, consumer electronics, battery, VR products, UAV…. • → new technologies • → new material • → new manufacturing process

Local Capital Market

• Optimistic forecast making “Hot Region”

• Following government strategy more more stimulus policies coming.

• Big companies join the table. • Overseas company acquisition starts

• High cost human. • Robots more application specific and

affordable. • Existed devices upgrades. • Production flexibility. • Production Intelligence.

Key driven factor – China Policy Made in CHINA 2025

Made in CHINA 2025 – Core Technologies relate to Machine Vision

——选自国家制造强国建设战略咨询委员会编制的《中国制造2025》重点领域技术路线图

Core products： （1） 智能制造基础通信设备 Basic communication equipment

（2） 智能制造控制系统 intelligent control system

（3） 新型工业传感器 New industrial sensors

（4） 制造物联设备 Manufacturing equipment

（5） 仪器仪表和检测设备 Instruments and testing equipment

（6） 制造信息安全保障产品 information security products

关键技术： （1） 制造信息互联互通标准与接口技术 制订制造信息互联互通的技术标准，重点研究制订智能装备、数字化车间/工厂的技术标准和规范。研究制造信息互联互通的接口技术，提供设备与设备之间、设备与系统之间协议互操作整体框架、协议互操作服务接口定义，支持异构协议设备的互联互通与协同工作。 （2） 工业传感器核心技术 Industry key sensor 研究传感器无线通信技术、传感器信号处理技术、传感器可靠性设计与试验技术、传感器精密制造与检测技术（ Sensor precision manufacturing and testing technology） （3） 人工智能技术 AIT ( artificial intelligence technology ) 研究知识工程、情景感知、模式识别(mode recognition)、自决策、自执行、可视化(visualization) 等关键技术，提高智能制造核心信息设备的智能化水平。 （4） 增强现实技术 (Augmented Reality) 研究三维空间RFID注册定位技术、工业物联网信息三维空间建模、搜索、显示与交互技术。

《Made in CHINA 2025》Core technology development

Guideline #4: Final Slide / Contact

Name : Isabel Yang Title GM of LUSTER Company LUSTER Light Tech. Beijing, CHINA 8610-52349688 isabelyang@lusterinc.com

Thanks for your attention!

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