Heading for the stars: the role of high-end inertial technology in satellite democratization and the acquisition of Sensonor

More than a year and a half has passed since the lockdowns started taking effect on a massive scale. Along with that, the commercial aerospace industry has been paralyzed, losing more than $400 billion in 2020, according to some IATA (International Air Transport Association) estimates. Although many industries suffered adverse effects due to the pandemic, others shone and were, in fact, helped by the situation, with pre-existing trends accelerating.

The pandemic is still expected to heavily impact the high-end inertial sensor market, which is tightly coupled to the aerospace industry, as outlined in Yole Développement’s “High-end inertial sensors 2020” report. This market slumped from $3.24 billion in 2019 to $2.84 billion in 2020, a 12% YoY drop, with the most significant effect coming from commercial aerospace, which fell by 28% YoY. A return to normal activity is not expected before 2024. New options for growth, therefore, should be considered by the players in this domain. As always, it is during crises and difficult times that emerging businesses appear.

A couple of months back, Yole highlighted in its article on high-end inertial sensors the transformation of the industrial logistics chain and the new (robotic) mobility, i.e., autonomous vehicles, trucks, industrial robots, last-mile delivery robots, etc. In that piece, we indicated the possibility of high-end inertial sensors expanding due to these new growth relays, leading up to $3.8 billion annual revenue by 2025. However, there is another angle that we haven’t thoroughly examined that will also contribute to this growth; an industry that is making giant leaps forward: new space. Traditional satellites, newer micro- and nano-satellites, rockets, and launch vehicles could be interesting alternative applications for high-end inertial sensors to offset partially the traditional aerospace business’s loss.

Activity in this domain has spiked in the last months with numerous examples. In early 2021, micro and nano-satellite maker and service provider OneWeb emerged from Chapter 11 bankruptcy under a new owner and announced that it would begin launching more broadband satellites in the months to come. Like SpaceX’s Starlink, OneWeb builds a network of low Earth orbit (LEO) satellites that can deliver high-speed broadband with much lower latency than traditional geostationary satellites.

A SpaceX rocket (Transporter-1) recently carried 143 micro- and nano-satellites from various companies and countries into space, setting a new world record for the most spacecraft ever deployed in a single mission. As part of the SmallSat Rideshare program, it cost just $ 1 million to send a 200-kilogram spacecraft into synchronous solar orbit (SSO), opening the space market to a broader audience. This comes shortly after another Starlink mission saw 60 satellites put into orbit on Jan 20 as part of the company’s goal to establish a mega-constellation of more than 42,000 satellites by 2027. The goal of this project is worldwide connectivity and internet via satellites.

Along the same line, Thales Alenia Space in France was chosen to be the prime contractor for a multi-billion-dollar project by global satellite operator Telesat. The contract involves building a fleet of 298 satellites in the 700-750kg class by 2024 for Telesat’s constellation Lightspeed, a LEO network that will deliver secure, low-latency, high-performance broadband professional services. And if we are talking about France, the country has a national plan to boost the new space economy, announcing in 2021 more than €500 million will be allocated for funding all types of companies (from start-ups to SMEs to large corporations) with activities in the spatial domain.

On the funding and acquisition side, things are also moving quite rapidly. Axiom Space raised $130M (series B) in February 2021 to push ahead its long-term ambition to establish a private space station. In addition, BlackSky Holdings, a space/satellite start-up, announced in February 2021 a deal to go public through a SPAC, reaching a valuation of $1.1 billion. Before that, Raytheon Space acquired in late 2020 Blue Canyon Technologies, a company specializing in space technologies, for $350 million. We can understand that the space race fuels the interest of big companies and SPACs, which, as new financial tools, allow for quick and easy funding. Other examples of recent SPAC initiatives (in 2021) include Astra, a rocket launch company that expects to raise $489M (reaching a valuation of $2.1 billion) and even Rocket Lab, another launch and spacecraft platform company that expects to raise up to $790M (at a valuation of $4.1 billion). The space industry saw more than 20 deals in 6 months (Nov 2020 – May 2021), amounting to at least $4 billion, providing excellent opportunities to satellite and launcher sub-system makers and also suppliers further down the value chain. Since last May and up to September 2021, even more deals sprouted relating to launchers and satellites (Relativity Space, Gilmour Space, Orbit Fab, etc.).

Generally, this space race has largely democratized the global cost to send small satellites into orbit, while it has also extended the technologies to enable top-notch performance, such as precise positioning, data communication bandwidth, and low latency systems.

Of all the sensors and technologies deployed inside the micro/nano-satellites, inertial sensors were among the most expensive and bulky. MEMS technology was intended to challenge legacy technologies in the market many years ago thanks to the CSWaP ratio (cost, size, weight, and power), which promised to be the best on offer. Although today the advancements in technology are impressive, they remain limited to the lower end of the spectrum. Nevertheless, MEMS performance is good enough to fill the void to address those applications in some programs.

Don’t get us wrong; there are other competing technologies out there for navigation besides inertial – it’s not a blue ocean environment. On the one hand, inertial technologies are competing among themselves (FOG, RLG, HRG, CVG, MEMS) and on the other with other navigation technologies such as Startracker (image-based) or GPS-aiding (for micro/nano-satellites that voyage below the MEO/GEO orbit of GNSS/GPS satellites). It is not a peaceful path, but the opportunities are there in this growing space market.

The giants of inertial sensor systems, such as Honeywell, Northrop Grumman, Safran, etc., had already understood this but were wondering when such inertial technology would match up to all the promises that have been made. They had only to look further down the food chain. Numerous smaller players, such as Gladiator, Innalabs, Sensonor, KVH, Emcore, SBG Systems, Silicon Designs Inc, etc., remain independent and succeeded in entering various programs, from aerospace to defense, offering a multitude of products and adjusting to the particularities of each application while being agile enough to address particular problems.

Today we saw the concretization of the appetite of a bigger company wanting to acquire a smaller one: Safran has agreed to buy Sensonor, a well-known Norwegian company that provides MEMS inertial systems. After its split from Infineon in 2009, and with accumulated know-how in the sensor industry for 60+ years, Sensonor entered the high-end inertial market, releasing two high-performance MEMS gyro modules in 2012 followed by IMU products. Since then, it has been quite successful in various applications, from industrial (robotics, drilling equipment, railway inspection, etc.) to defense (missile launchers, platform/weapon/antenna stabilization, etc.) and even aerospace (AHRS, UAV navigation, missile seekers, etc.). Moreover, it was eventually chosen by NASA and is present in various (operational) satellites. Not bad for a smaller player going up against the titans mentioned earlier in the midst of a highly competitive field with other MEMS players, such as Analog Devices, Silicon Sensing, Thales, Collins Aerospace, etc.

The acquisition doesn’t come as a shock since Sensonor is also very active in the new space industry, recently releasing two commercially available off-the-shelf space-dedicated products, a gyro module and an IMU. Based on MEMS technology, the miniature products are well suited for meeting SWAP constraints in the demanding nano-satellite market. They have good overall performance, especially for low orbits, and a very low cost compared to other systems due to their small size (reduced radiation shielding cost). Thus, the acquisition makes sense, strengthening Safran’s portfolio on one side and positioning it to profit from gains in this rapidly developing industry on the other. This acquisition will also allow Sensonor to build its development plan alongside a strong player and continue its growth.

Acquiring a small, agile player recognized in a promising technology, on the cutting edge of emerging growth markets (last-mile delivery robots, nano-satellites, etc.); what else could we say than: nice move!

Acronyms:

SPAC: Special Purpose Acquisition Company – RLG: Ring Laser Gyroscope – FOG: Fiber Optic Gyroscope – HRG: Hemispheric Resonator Gyroscope – CVG: Coriolis Vibratory Gyroscope – MEMS: Micro-Electro-Mechanical System

About the authors

Dimitrios Damianos - Yole Développement

Dimitrios Damianos, Ph.D., is a Senior Technology & Market Analyst, part of the Photonics & Sensing division at Yole Développement (Yole).
Based on solid technical expertise in imaging, sensing, and photonics, Dimitrios oversees the day-to-day production of valuable technology & market reports and custom consulting projects.
He also plays a key role in the expansion of Yole’s market & technical knowledge, supporting the development of strategic projects and maintaining long-term relationships with key accounts while ensuring their expectations are met.
Dimitrios regularly presents and delivers keynotes at international conferences and exhibitions. He has also authored and co-authored several technical & market reports as well as scientific papers in international peer-reviewed journals.
Dimitrios holds a BSc in Physics and an MSc in Photonics, both from the University of Patras (Greece), and a Ph.D. in Optics & Microelectronics from the University of Grenoble-Alpes (France).

Guillaume Girardin - Yole Développement

Guillaume Girardin, PhD. is Director of Market Intelligence at Yole Développement (Yole).
As director he closely works with Yole’s Executives to evaluate and inform with strategic decision-making – including insights into the market, customers and competitors.
Within the Operating activities, he is engaged in the analysis of financial, strategic data and trends, as well as scenario and business analytics, to support the definition and the development of strategic plannings and structuring projects of the company.
Based on his experience in the semiconductor industry and his previous position as Director of the Photonics and Sensing division, Guillaume interacts with Yole’s analysts, by increasing synergies between the different teams, around markets and innovations.
In addition, he is daily discussing with leading technological companies and analyzing technical and financial data.
Guillaume Girardin holds a Ph.D. In Physics and Nanotechnology from the Claude Bernard University Lyon 1 (Lyon, France) and an M.Sc. in Technology and Innovation Management from EM Lyon School of Business (Lyon, France).”

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Source: http://www.yole.fr

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