Heated demand fuels up tracking chip sector
Valor Econômico
In the beginning of the decade, when we talked the machines ‘communicating' among themselves in the near future and that there would be more equipment connected through the Internet than people, all that seemed a distant reality for the Brazilian market. But machine to machine communication (M2M) has become stronger in the country and it should see an explosive growth as of this year. The expectation of companies that produce devices capable of making such connection estimate growth in sales from the current 1 million modules to 6 million over the next three years.
This perspective is leading the companies of the sector to increase the productive capacity. French Telit, which has a plant in Hortolândia (SP), will triple its productive capacity. "The market presents a boom in the demand, mainly because of the adoption of the car trackers by the car industry and of telemetry devices for measuring electricity and gas", says the International Marketing and Sales Vice President of the company, Felix Marchal.
Telit has closed an agreement with makers Renault, Kia Motors, Hyundai and the autoparts company Magneti Marelli (supplier of Fiat) for the production of tracking devices. Today, Brazil is among the ten largest markets in the area of M2M but if the predictions are confirmed, it may be among the top five until 2013 says Marchal. In the area of energy, the company has also entered into an agreement with Ampla (of Rio de Janeiro), with the Paraná State Based Copel and with the Minas Gerais State company Cemig for the supply of devices that will allow the remote monitoring of energy consumption in the households.
"The expectation for this year was to reach 20% of market share and we have already got to it in March. The demand grows above the expected", says the Managing Officer of Telit in Brazil, Marcos Kinzkowski. The company began the operations in the country in 2008 and it ended 2009 with 15% of market share. The forecast for 2010 was reviewed to 25% of market share, with an increase of 100% in sales.
German Cinterion, market leader with 60% of market share, projects growth of at least 80% for this year, also favored by the new demand of the car sector, said the main Officer of the company, Norbert Muhrer. Based on the orders received, Cinterion foresees the sale of 400 thousand modules for the makers. The industries of electric and electronic devices shall also increase orders of wireless communication devices, according to the Executive. In order to meet this growing demand, the company invested in the second half of 2009 to triple the productive capacity of the plant it has in Manaus. Freescale Semicondutores do Brasil also bets on the growth of the Brazilian market, mainly in the segment of car trackers. The managing officer of the company, Armando Gomes da Silva Júnior, prefers not to risk a number though.
In Brazil, the main cause for the immediate explosion of the demand is a change in the legislation in the transportation sector. Resolution No 245/2007 of the National Traffic Council (Contran) stipulates that, as of July, the car makers will have to install a device that allows blocking and locating the car in case of theft. The National Association of Vehicle Manufacturers (Anfavea) estimates the sector will produce 3.14 million units this year.