Do You See What I See?

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One of the benefits of building and providing sensors is that a large base of our customers are OEMs (Original Equipment Manufacturer’s). Our OEMs make equipment used in many processes globally, from glass and steel manufacturing, semiconductor processes, sapphire crystal growth, electrical transmission and distribution equipment, etc. What this means is that we see things happening in the market earlier than most.

As an example…someone is seeing a need to make more sapphire crystal products. This means a crystal producer will place orders on an OEM for equipment to make sapphire crystals. This means that this OEM places orders to me to buy more sensors. Therefore…I see something happening well before something actually is produced as an end product into the market.

So, what do I see now? 

  1. Another wave of LEDs is coming. Light Emitting Diodes (LEDs) have had huge booms with the television and media products (LED based TV’s are in most homes in the US now). After the ramp up globally for the televisions and headlights (like the cool Audi headlights), things have gone quiet as there has been an overcapacity in the market. Well, that overcapacity is about to be fully consumed. The next big wave for LEDs is going to be outdoor lighting, and it is starting to ramp up now. Expect the market to expand in the second half of 2014.
  2. Crystal growth is starting right now. Everyone has more and more tablets and phones with that slick hardened glass cover on them. Now…they are moving to smaller things…like watches and higher end “smaller” devices. What this will mean is sapphire used instead of the standard Gorilla® glass by Corning and Dragontrail® by Asahi. Sapphire crystal is normally thought of on those high end watches such as Rolex. Well…if the iWatch is coming, it will be there as well, and on other higher end devices. I see the pickup of crystal growth from OEMs on a global basis.  More machines being built that demand faster cycle time for growth and higher quality.
  3. Semiconductor/Wafer processing is starting to pick up again… and will really pick up in the beginning of 2014. Wafers that are high quality are used for semiconductors and chips. Lower quality is used for solar applications. Both are going to boom again. Just like I have stated with LEDs, we have had an overcapacity and a moderation of the solar market that is now going to take off for another run. Solar will be strong over the next 5 years.
  4. Industrial Materials will not have growth…but will squeeze everything they can out of existing assets in order to increase productivity and yield. The assets in the Glass and Metals market are essentially stranded assets, and owners of these assets are going to squeeze as much as they can from what is already there. Sensors on processes, efficient power consumption, automation, reuse of scrap and higher first pass yields are what is going to drive profits in this segment over the next 5 years.
  5. Petrochemical markets are on the rise. This may seem counter-intuitive based on all of the Green Energy and Renewables you hear about today, but the big players in the petrochemical market (Exxon, BP, Shell, etc.) are still making more and more money. They are physically expanding and the investment money is pouring in… but they are also streamlining and squeezing efficiency out of their processes to make even more profits out of what they have. Why? Renewables will be useful and big in the market once they reach parity…meaning it costs as much to get energy from renewables as it does from traditional carbon based methods. When that tipping point is reached… carbon fuels will start to lose big time. So, to stay alive, they lower their costs to make it harder for renewables and alternative energy sources to complete and reach parity, thus prolonging their profitability and their reign.

So, this is what I see.  How do you see it?

In my next blog…I will tell you what I am hearing and what is coming even further into the future

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