Breaking the international high-end monopoly, the Chinese sensor industry has achieved multi-dimensional rise and breakthrough.

With the global spread of the Internet of Things, intelligent manufacturing and Industry 4.0, sensors, as the core "hub" connecting the physical world and the digital world, are experiencing rapid growth. China, with its leading global scale of electronic manufacturing, has become an important emerging market for the sensor industry. It is expected that the market size will reach 500 billion yuan by 2025, accounting for over 30% of the global market. The demand in areas such as automotive electronics, industrial manufacturing, and consumer electronics continues to drive market growth.

However, the domestic sensor industry still faces significant challenges. Many enterprises have long adopted the "Fabless + Assembly" model, relying on imports for core components such as sensitive elements and MEMS chips. There are shortcomings in the development of high-end products, and the low-end market is characterized by excessive competition and homogeneity due to the large number of participants. As a result, it presents a "pyramid" structure: small and medium-sized enterprises cluster at the bottom in the temperature sensor sector, while only a few enterprises at the top have broken through the automotive-grade supply chain.

In this context, a number of domestic listed companies have achieved breakthroughs: Aodiwei, Donghua Testing, etc. have broken the monopoly of Europe and the United States in the fields of vehicle-mounted ultrasonic and high-precision strain sensing. Guoer Microelectronics and Huiting Technology have even ranked among the top in global niche markets, driving the domestic sensor market share to exceed 30%. Currently, technological iteration, high-end domestic substitution, and emerging scenario demands are driving the industry to accelerate its progress from "import dependence" to "self-control", and opening up a new journey of high-quality development.

It is imperative to break the international monopoly of high-end products.

With the vigorous development of emerging industries such as artificial intelligence, the Internet of Things and Industry 4.0, sensors, as the key core of modern information technology and the bridge connecting the physical world and the digital world, are playing an increasingly important role. And as one of the largest electronic manufacturing markets in the world, the sensor industry chain in China is rapidly emerging.

According to data from the CaiDi Think Tank, the market size of sensors in China reached 364.47 billion yuan in 2023, with a year-on-year growth of 14.9%. It is projected to reach 554.72 billion yuan in 2026, with a three-year compound growth rate of 15.0%. The application demands from industries such as automotive electronics, industrial manufacturing, and consumer electronics have driven the diversified development of the domestic sensor market.

However, the Chinese sensor industry is facing challenges such as partial reliance on imports and shortcomings in the development of high-end products. An important reason that cannot be ignored behind this is that sensitive components, MEMS chips, and ASIC chips are the core of sensors. There are relatively few IDM enterprises worldwide that are capable of designing and manufacturing these core components. Leading sensor companies such as Bosch, STMicroelectronics, TDK, and Honeywell are all IDM companies, while domestic enterprises mainly operate as Fabless + assembly and have not yet established sufficient system-level competitiveness. The high-end products independently designed by domestic enterprises have not become the main products for shipment.

On the other hand, classified by type, sensors can be divided into temperature and humidity sensors, pressure and flow sensors, optical sensors, image sensors, radar sensors, touch sensors, biosensors, level sensors, etc. There are numerous related subcategories. At the same time, due to the emergence of a large number of participants in the domestic market, the industry landscape shows a feature of dispersion and partial homogenized competition, especially in the low-end product market, the competition is particularly fierce.

As a result, the domestic sensor market presents a "pyramid" structure: at the bottom are a large number of small and medium-sized manufacturers engaged in fierce competition in the fields of pressure and temperature sensors; in the middle are enterprises with IDM capabilities, occupying a certain market share in specific fields; at the top are a few enterprises that possess core technologies, and their sensor products have entered the automotive electronic supply chain. However, through technological breakthroughs and strategic planning and other measures, more enterprises have become leading players or "invisible champions" in their respective niche industries.

For instance, in the field of MEMS technology, Saiwei Electronics, as one of the few IDM enterprises globally, has achieved a wafer yield of over 90% for MEMS wafers, with an annual production capacity of 100 million pieces, providing a foundry foundation for the development of the domestic industry; in the integration of optics and algorithms, Meiji Sensing has pioneered the "industrial-grade optical technology + deep learning algorithm" dual-drive model, launching solutions such as precise positioning and displacement measurement, helping semiconductor enterprises increase the defect detection rate by 8%; in terms of industrial chain layout, Aosong Electronics is about to start the production of the first 8-inch MEMS chip line in China, filling the gap in automotive-grade magnetic encoder production.

Meanwhile, domestic enterprises have also achieved remarkable results in various major application markets. For instance, in the automotive electronics sector, Audiwei, as the undisputed champion of AEBS ultrasonic sensors, has significantly enhanced the penetration power of its products, with a market share exceeding 30%. In the industrial manufacturing sector, Donghua Testing independently developed a 0.01% precision dynamic strain sensor, breaking the monopoly of Europe and America and winning bids for several national-level major projects. In the consumer electronics and emerging fields, Goer Electronics, as the world's leading enterprise in MEMS acoustic sensors, has a cumulative sensor shipment volume of over 5 billion units, gradually establishing a foothold in the global market.

The multi-faceted rise and breakthrough of domestic enterprises

Overall, the Chinese sensor industry is highly competitive, showing a trend of "targeting the high-end and breaking through in specific segments". Some leading enterprises have gained competitive advantages by having stronger R&D capabilities and brand influence. Meanwhile, some small and medium-sized enterprises have achieved breakthroughs through technological innovation and strategic integration by deeply specializing in specific fields. During this process, three major driving forces are reshaping the industry ecosystem. These include MEMS becoming the core battleground for technological iteration, domestic substitution gradually breaking through from the low-end to the high-end, and human-shaped robot sensors and high-voltage sensors for new energy vehicles becoming new growth points.

Emerging application fields present strategic opportunities.

Driven by multiple factors, the domestic sensor industry is undergoing a transformation from "import dependence" to "self-control". Data from 2024 shows that the market share of domestic sensors has exceeded 30%, a significant increase compared to three years ago. Behind this process, there are both policy priorities for "critical technology" support and enterprises' technological breakthroughs achieved through R&D investment. For instance, the allocation of national funds towards MEMS technology directly accelerated the domesticization process of high-end sensors.

The growth logic of the domestic sensor industry can be mainly summarized as follows: technological breakthroughs fill the gaps, domestic alternatives boost the increment, and the expansion of application scenarios open up the space. For instance, in the automotive electronics field, the mandatory installation policy for AEBS (Automatic Emergency Braking System) has given rise to a market worth tens of billions of dollars; in the industrial field, the upgrading of intelligent manufacturing has driven a sharp increase in the demand for high-precision sensors; in the consumer electronics field, the development of new energy vehicles and humanoid robots, among others, has brought about new growth.

Obviously, with the overall rapid growth of the sensor market, domestic sensor enterprises have made a series of breakthroughs in both product technology and market position. Some enterprises have achieved domestic substitution in specific fields such as pressure, gas, temperature, and inertia through technological breakthroughs and industrial chain integration. However, the high-end market still relies on imports (such as automotive-grade chips and high-precision biological sensors), presenting a structural contradiction of "excess at the lower end and deficiency at the higher end".

Especially for some mid-to-low-end sensor products, they not only find themselves in a "price red ocean" amid fierce competition, but also face international competition pressure. However, the rapid development of emerging application fields is creating a "counterbalancing and complementing" effect. That is, the popularization of emerging technologies such as the Internet of Things, artificial intelligence, and 5G technology has provided a vast space for the application of sensors, including fields such as healthcare, agriculture, environmental monitoring, driverless cars, augmented reality (AR), and virtual reality (VR).

Therefore, emerging sensor products such as wireless sensors, microsystem sensors and biosensors are regarded as the main sources of market growth in the future. IDTechEx predicts that by 2033, the annual demand for automotive sensors will increase by more than six times. And due to the wide application of wearable technology in health monitoring, next-generation human-machine interfaces, industrial Internet of Things and augmented reality, it is expected that the global wearable sensor market size will reach 7.2 billion US dollars in 2035.

It can be seen that domestic sensor enterprises should combine emerging technologies such as the Internet of Things and artificial intelligence to promote the intelligent and digital transformation of the sensor industry, and actively explore more application scenarios. At the same time, based on the current industry situation, more investment in research and development is still needed, especially in the fields of high-end sensors like MEMS, to improve product performance and added value; smaller enterprises should focus on specific fields and achieve breakthroughs through specialized and differentiated development.

Industry analysts predict that the following four industry trends will be of particular interest in the future. Firstly, intelligence integration with AI: sensors incorporate AI algorithms to enable local data processing. Secondly, miniaturization and MEMS technology: the proportion of MEMS processes is increasing, leading to the reduction of sensor sizes to the micrometer level and continuous cost reduction. Thirdly, new material applications: quantum sensors (for ultra-high precision measurement) and flexible sensors (for wearable devices) have entered the commercial stage. Fourthly, networking and edge computing: an increasing number of industrial sensors will support wireless transmission, and the penetration rate of edge computing nodes is continuously rising.