While Chinese players are focusing on volume-driven segments, longstanding players appear to be prioritising higher-margin market segments.
The race for smaller pixels continues and prices have shrunk considerably at the microbolometer level, increasing the market size
Chinese market leaders have narrowed the performance gap with established players, boasting high production capacities and competitive pricing.
“While growth in the industrial market remains robust, it’s counterbalanced by lower prices resulting from a higher proportion of lower-tier systems,” says Yole’s Axel Clouet, “denand and product mix is shifting from high-end handheld cameras towards lower-end fixed-mount ones.”
The thermal camera market is expected to grow to $9.1 billion in 2029, with an estimated 5.8% CAGR between 2023 and 2029.
The PVS sector is a crucial driver in consumer market expansion, particularly in the European market. Enhanced system performance coupled with decreasing prices is fostering broader adoption
The defense & aerospace market is benefiting from geopolitical tensions and recent conflicts, resulting in positive momentum.
Additionally, the automotive market is poised for growth due to upcoming stringent regulations in the U.S. concerning AEB systems, potentially enforced by 2028.
The decision on these regulations, expected in the first half of 2024, holds significance for widespread adoption.
In 2023, Chinese companies like InfiRay and Hikmicro maintained their upward trajectory, driven by strategies prioritizing volume, leading to their increasing dominance in both the industrial and consumer sector.
The Chinese thermal imaging ecosystem reached a significant milestone, accounting for 50% of global thermal imager shipments.
“In the face of this heightened competition in industrial applications, western counterparts have retained their stronghold in government-centric sectors, such as security, firefighting, defense,” says Yole’s Clyde Midelet, “they are expected to concentrate on high-margin offerings.”
Regulatory changes in the U.S., with potential implications for Europe, have created a lucrative opportunity in the automotive sector. This has spurred intense technological advancements, with established players and startups like Adasky (More news) and Owl actively pursuing innovation in this domain.
Geopolitical factors continue to influence supply chains, with several defense-focused entities engaging in financial manoeuvres, indicative of anticipated production upticks in the coming year.
The ongoing trade tensions between the U.S. and China persist, with ramifications for the thermal imaging industry. For example, recent export restrictions imposed by China on Germanium can have an impact on the camera lens supply chain.