Integrated Sensing Systems is projecting growth in its sensor manufacturing business.

Photo by Robert Ramey | For AnnArbor.com

A sensor manufacturing company expects to leverage $18.5 million in investment financing to expand its production capacity in the Ann Arbor region and hire 40 to 50 workers over the next 30 months.

The firm, Integrated Sensing Systems, is also considering a move from its 11,000-square-foot headquarters in Ypsilanti Township to an ex-Tecumseh Products facility in the city of Ann Arbor. 

ISSYS, the dominant player in the local sensor making sector, has raised $18.5 million in funding from several investors to spark its expansion, said Nader Najafi, founder and CEO of ISSYS.

Investors include $1.8 billion Swiss sensor supplier Endress+Hauser Flowtec AG and $557 million New York-based manufacturer Greatbatch Inc.

“It took over three years to recruit Greatbatch and Endress+Hauser,” Najafi said. “We’re very delighted that we have two world-class partners and we believe that working with them for the next two years, we should be able to attract additional jobs and new opportunities for the state of Michigan.”

Najafi said ISSYS will invest primarily in manufacturing capacity and product development. 

The company's microelectromechanical sensors (MEMS) are typically sold for $2 to $4 apiece. The devices are used in fuel cells, biomedical applications, airplanes and a wide range of other devices.

"It's like a $2 screw that allows a $2 million airplane to fly," Najafi said.

The 14-year-old firm is in talks with Anika and Associates about its prospective move into an ex-Tecumseh Products building in Ann Arbor’s Research Park. The company hopes to secure a tax abatement from Ann Arbor to help fund its expansion.

Najafi declined to discuss the prospective move, saying his company is still weighing its options, including expanding its current facility. Growth in the microelectromechanical sensor (MEMS) production industry - driven in part by the health care industry - is behind the company’s expansion.

The 30-person company, which has added several employees in the last year, expects to grow to 70 or 80 workers by about 2012.

“We need more capacity,” Najafi said without offering specifics. “We’re definitely going to use the capital within the next two, two-and-a-half years."

Growth in the $10.3 billion U.S. sensor market will average 4.3 percent annually through 2012, according to a 2008 study by Cleveland-based Freedonia Group.

Contact AnnArbor.com’s Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter.