US demand to rise 8.6% annually through 2014

Demand for chemical sensors in the US is forecast to increase 8.6 percent annually to more than $6 billion in 2014. Growth will be supported by continued strong demand for biosensors. Technological advances are resulting in unit price reductions, and have resulted in miniaturization and increased precision that allow new and wider applications. In the industrial market, demand for oxygen sensors for new vehicles is expected to grow, reflecting recovery in new automobile production following sharp declines in this industry in the US recession beginning in 2007. Continued regulation for environmental monitoring will also sustain growth in demand for chemical sensors through 2014.

Key biosensor segment to reach $4.4 billion

Demand for biosensors is projected to increase to $4.4 billion by 2014. In the US, home-use glucose test strips currently dominate demand for medical applications of biosensors, a demand that is supported by the increasing prevalence of diabetic conditions in the US population. Glucose sensors are expected to benefit from advancing technologies that reduce the time to produce readings and the amount of biological material needed. At the same time, improvements in precision and miniaturizing with sensing equipment has resulted in an increasing number of point-of-care applications, which provide immediate data in direct medical encounters. While glucose sensors are projected to continue to dominate the market through 2014, there is strong demand for sensors in other medical applications, including those that identify biomarkers for cardiac and infectious diseases and for cancers. Strongest growth in the medical market for biosensors is expected for diagnostic applications and patient monitoring equipment.

Biosensors are important in the monitoring of water, wastewater and environmental emissions, which are supported by regulatory control. Regulation will also sustain demand for biosensors in the process industries, where they are used to identify toxicity and biological contaminants in food and pharmaceuticals. The security and biodefense markets will make increasing use of biosensors, again supported by governmental regulation and the need for public safety. Automotive gas sensors to pace industrial segment Strongest industrial demand for chemical sensors will be for automotive gas sensors. Following a steep decline in the market for new automobiles in 2008, demand for chemical sensors for vehicles is expected to increase as the market recovers from economic recession. Growth will be supported by the increasing precision, decreasing unit cost and wider application of oxygen sensors to assess emissions and air quality. Demand will also be affected by new and more advanced efficiency and clean vehicle standards for heavy-duty and light-duty trucks.

Clean energy to benefit power management sensors

The search for clean energy will support growing demand for sensors in the arena of power management, where the development of solar and wind technologies will spur demand for semiconductors. The need for increased efficiency in power management and new attention to energy recovery processes will also drive growth in this area.

TABLE OF CONTENTS

INTRODUCTION xi
I. EXECUTIVE SUMMARY

II. MARKET ENVIRONMENT
General 4
Macroeconomic Outlook 5
Demographic Trends 9
Health Care Industry Outlook 11
National Health Expenditures 12
Epidemiological Patterns 14
Acute Conditions 14
Chronic Conditions 15
Patient Activity 18
Health Insurance Coverage 19
Manufacturing Outlook 22
Motor Vehicle Outlook 25
Analytical Instruments Outlook 28
Pollution Control Outlook 30
Sensor Industry Overview 32
Pricing Trends 35
Regulatory & Environmental Issues 38
Environmental Regulations 39
Motor Vehicle Emissions 44
Industrial Safety Regulations 46
Medical Regulations 47
Food Safety Regulations 48
International Activity & Foreign Trade 49

III. TECHNOLOGY OVERVIEW
General 52
Basic Sensor Technology 53
Chemical Sensor Technology 54
Electrochemical 56
Optical 57
Infrared 58
Photoionization 60
Emergent Technologies 60
Pellistor/Catalytic Bead 62
Semiconductor 63
Other Sensor Technologies 64
Biosensors 67
MEMS & Other Microsystems 69
Nanotechnology 71
Biomimetics 72
Electronic Noses & Tongues 72
Electronic Noses 74
Electronic Tongues 77

IV. PRODUCTS
General 79
Biosensors 81
Sensing Elements 85
Enzymes 86
Other Sensing Elements 86
Transducer Technology 87
Suppliers & Market Share 89
Electrochemical Sensors 92
Potentiometric Sensors 94
Analytes 95
Markets 97
Suppliers & Market Share 98
Amperometric Sensors 99
Analytes 101
Markets 102
Suppliers & Market Share 103
Conductometric Sensors 104
Other Electrochemical Sensors 106
Optical Sensors 107
Infrared Sensors 109
Analytes & Markets 111
Suppliers 112
Other Optical Sensors 113
Types 114
Suppliers 116
Optical Sensor Market Share 118
Pellistor/Catalytic Bead Sensors 119
Analytes & Markets 120
Suppliers & Market Share 121
Semiconductor Sensors 122
Analytes & Markets 124
Suppliers & Market Share 125
Other Chemical Sensors 126

V. ANALYTES
General 130
Liquids & Solids 131
Carbohydrates 134
pH 135
Oxidation-Reduction Potential 137
Dissolved Gases 139
Other Liquids & Solids 141
Gases 142
Oxygen 146
Toxic Gases 148
Combustible Gases 149
Other Gases 151
Carbon Dioxide 152
Refrigerant Gases 153
Volatile Organic Compounds 154
Ozone 155

VI. MARKETS
General 157
Medical 160
Glucose Tests 162
Diabetes Trends 163
Products 165
Suppliers 166
Other Diagnostic Tests 167
Cardiac Risk/Cholesterol 168
Hemoglobin A1c 169
Renal/UTI & All Other 170
Patient Monitoring Equipment 170
Industrial 173
Motor Vehicles 174
Oxygen Sensors 176
Other Motor Vehicle Sensors 179
Process Industries 182
HVAC & Other Equipment 186
Environmental Monitoring 189
Industrial Safety & Emissions 190
Portable & Fixed Safety Systems 191
Emissions Monitoring 193
Water & Wastewater 195
Automobile Emissions Testing 197
Other Environmental Monitoring 199
Other Markets 200

VII. INDUSTRY STRUCTURE
General 204
Industry Composition 204
Market Share 208
Merchant Sensor Suppliers 209
Captive Sensor Producers 210
Competitive Strategies 213
Research & Development 213
Product or Market Focus 215
Low-Cost Position 217
Acquisitions & Divestitures 218
Manufacturing 219
Marketing & Distribution 220
Company Profiles 223
Abbott Laboratories 224
Alere Incorporated 227
Alpha MOS SA 229
Alphasense Limited 231
AMETEK Incorporated 233
Bayer AG 234
Bosch (Robert) GmbH 237
Cholestech, see Alere
City Technology, see Honeywell International
Delphi Automotive LLP 239
Delphian Corporation 241
DENSO Corporation 243
Draegerwerk AG & Company KGaA 245
Emerson Electric Company 247
EnviteC, see Honeywell International
e2v technologies Limited 248
Figaro Engineering, see Tokuyama
FIS Incorporated 250
General Electric Company 252
Halma plc 254
Home Diagnostics, see Nipro
Honeywell International Incorporated 256
Horiba Limited 260
International Sensor Technology 262
Inverness Medical Innovations, see Alere
Johnson & Johnson 263
LifeScan, see Johnson & Johnson
Mine Safety Appliances Company 266
Nemoto & Company Limited 269
NGK Spark Plug Company Limited 271
Nipro Corporation 273
Nova Biomedical Corporation 275
Novatech Controls Pty Limited 277
Ocean Optics, see Halma
Osmetech plc 278
Physical Sciences Incorporated 280
Polymer Technology Systems Incorporated 281
RAE Systems Incorporated 283
Roche Holding Limited 285
Rosemount Analytical, see Emerson Electric
Schauenburg Group 288
Sensata Technologies BV 290
Sensidyne, see Schauenburg Group
Sensorex Corporation 292
Servomex, see Spectris
Siemens AG 293
Smiths Group plc 295
Spectris plc 297
Teledyne Technologies Incorporated 299
Thermo Fisher Scientific Incorporated 302
Tokuyama Corporation 304
Vaisala Oyj 306
VTI-Valtronics Incorporated 308
YSI Incorporated 309
Other Companies Mentioned in Study 312

LIST OF TABLES

SECTION I -- EXECUTIVE SUMMARY
Summary Table 3

SECTION II -- MARKET ENVIRONMENT
1 Macroeconomic Indicators 8
2 Population & Households 11
3 National Health Expenditures by Type & Source 13
4 Acute Conditions by Type 15
5 Chronic Conditions by Type 17
6 Patient Activity by Type 19
7 Health Insurance Coverage of the US Population 22
8 Manufacturers’ Shipments 25
9 Motor Vehicle Indicators 28
10 Gas & Liquid Analysis Instrument Shipments 30
11 Pollution Control Equipment Expenditures 32
12 Total Sensor Demand 34
13 Chemical Sensor Prices 37

SECTION IV -- PRODUCTS
1 Chemical Sensor Demand by Type 80
2 Biosensor Demand by Market 85
3 Biosensor Demand by Sensing Element 86
4 Electrochemical Sensor Demand 94
5 Potentiometric Electrochemical Sensor Demand 95
6 Potentiometric Electrochemical Sensor Demand by Analyte 96
7 Potentiometric Electrochemical Sensor Demand by Market 98
8 Amperometric Electrochemical Sensor Demand 101
9 Conductometric Electrochemical Sensor Demand 106
10 Other Electrochemical Sensor Demand 107
11 Optical Chemical Sensor Demand 109
12 Infrared Chemical Sensor Demand 111
13 Other Optical Chemical Sensor Demand by Analyte & Market 114
14 Other Optical Chemical Sensor Demand by Type 116
15 Pellistor/Catalytic Bead Sensor Demand 120
16 Semiconductor Sensor Demand 124
17 Other Chemical Sensor Demand 129

SECTION V -- ANALYTES
1 Chemical Sensor Demand by Analyte 131
2 Liquid & Solid Phase Chemical Sensor Demand 133
3 Carbohydrate Sensor Demand 135
4 pH Sensor Demand 137
5 Oxidation-Reduction Potential Sensor Demand 139
6 Dissolved Gas Sensor Demand 141
7 Other Liquid & Solid Phase Chemical Sensor Demand 142
8 Gas Sensor Demand 145
9 Oxygen Sensor Demand 148
10 Toxic Gas Sensor Demand 149
11 Combustible Gas Sensor Demand 151
12 Other Gas Sensor Demand 152

SECTION VI -- MARKETS
1 Chemical Sensor Demand by Market 159
2 Medical Market for Chemical Sensors 161
3 Glucose Testing Market for Chemical Sensors 163
4 Other Diagnostic Testing Market for Chemical Sensors 168
5 Patient Monitoring Equipment Market for Chemical Sensors 172
6 Industrial Market for Chemical Sensors 174
7 Motor Vehicle Market for Chemical Sensors 176
8 Motor Vehicle Oxygen Sensor Demand 179
9 Other Motor Vehicle Applications for Chemical Sensors 182
10 Process Industry Market for Chemical Sensors 186
11 HVAC & Other Industrial Markets for Chemical Sensors 188
12 Environmental Monitoring Market for Chemical Sensors 190
13 Industrial Safety & Emissions Market for Chemical Sensors 191
14 Water & Wastewater Monitoring Market for Chemical Sensors 196
15 Automobile Emissions Testing Market for Chemical Sensors 199
16 Other Environmental Monitoring Market for Chemical Sensors 200
17 Other Markets for Chemical Sensors 203

SECTION VII -- INDUSTRY STRUCTURE
1 Chemical Sensor Sales by Company, 2009 206
2 Research & Development Spending Patterns, 2007-2009:
Selected Sensor Manufacturers 215

LIST OF CHARTS

SECTION II -- MARKET ENVIRONMENT
1 Annualized Cost per Sensor by Type, 2009 38

SECTION III -- TECHNOLOGY OVERVIEW
1 Chemical Sensor Diagram 55

SECTION IV -- PRODUCTS
1 Chemical Sensor Demand by Type, 2009 81
2 Biosensor Market Share, 2009 92
3 Potentiometric Electrochemical Sensor Market Share, 2009 99
4 Amperometric Electrochemical Sensor Market Share, 2009 104
5 Optical Chemical Sensor Market Share, 2009 119
6 Pellistor/Catalytic Bead Sensor Market Share, 2009 122
7 Semiconductor Sensor Market Share, 2009 126

SECTION V -- ANALYTES
1 Liquid & Solid Phase Chemical Sensor Market Share, 2009 134
2 Gas Sensor Market Share, 2009 146

SECTION VI -- MARKETS
1 Chemical Sensor Demand by Market, 2009 159
2 Relationship of Glucose Sensor Demand to Diabetes Trends 165

SECTION VII -- INDUSTRY STRUCTURE
1 Chemical Sensor Market Share, 2009 208
2 Merchant Chemical Sensor Market Share, 2009 210
3 Captive Chemical Sensor Market Share, 2009 212