Global Outlook Essential to Meet Growing Challenges in the SMT Placement Equipment Market

PALO ALTO, Calif.--Oct. 2, 20045, 2004--The move toward miniaturization in the electronics industry is likely to be a major driving force in the surface mount technology (SMT) placement equipment market. Vendors that capitalize on this need and develop the products to handle smaller components stand to gain in terms of increased market share.

New analysis from Frost & Sullivan (www.electronics.frost.com), New Growth Opportunities for SMT Placement Equipment Vendors, reveals that revenue in this industry totaled $2 billion in 2004 and is projected to reach $3.44 billion in 2010.

"While miniaturization offers new growth opportunities, vendors must also be prepared to meet the demand for flexible SMT placement equipment," says Frost & Sullivan Research Analyst Vikram Shanbhag. "The need of the hour is modular machines that offer scalable output, low set up times, short batch production, and frequent changeovers."

Besides incorporating these must-have technical features, it is necessary that SMT placement equipment vendors follow competitive pricing policies, given the highly price sensitive nature of the market.

In a bid to reduce the impact of price pressures on company earnings and simultaneously provide cost-effective solutions, a few SMT placement equipment vendors have shifted or are in the process of setting up manufacturing bases in the low cost regions of China and Eastern Europe.

The shift of high volume manufacturing to China and other low cost manufacturing centers has diluted revenues in the North American SMT placement equipment market. However, given the intellectual property right issues in China, the North American market is expected to revive and show a slightly higher growth after 2008.

"At the end of the day, no matter how effective the product and pricing strategies, integrated logistics with greater focus on customer service is vital to enjoy a strong global presence in the SMT placement equipment market," explains Shanbhag.

There is a clear shift in the industry from equipment intensive sales to marketing the product as a manufacturing solution. This reinforces the need for customized enterprise resource planning software in handling sales and distribution efficiently in a global set-up.

Offering value-added services such as optimization and operator-friendly software and extending global reach through local sales and service networks has played a crucial role in helping many SMT placement equipment vendors differentiate from the competition and gain market share.

Additionally, with the commoditization of SMT placement equipment, vendors need to equip themselves with new service offerings such as pre-sales support in application finalization and post-sales call center assistance.

Overall, the future looks bright for SMT placement equipment vendors, provided they step up technological innovations in equipment features to meet the growing demands of the market.

For example, entertainment and safety systems in automotives, diagnostic and measuring meters in medical equipment, and handheld security gadgets demand SMT placement equipment with new and improved features.

"While there is tremendous potential to be unearthed in these emerging verticals, it also brings with it several technical challenges since SMT placement equipment vendors now need to cope with more stringent assembly requirements," concludes Shanbhag.

New Growth Opportunities for SMT Placement Equipment Vendors, part of the SMT Subscription, evaluates the key drivers and challenges in the SMT placement equipment market. It provides the regional and vertical market analysis for low, medium, and high-speed turret and gantry equipment. The study also focuses on the trends shaping the market and discusses possible ways of gaining market share. Executive summaries and interviews are available to the press.

If you are interested in an analysis overview which provides manufacturers, end-users and other industry participants an overview, summary, challenges and latest coverage of New Growth Opportunities for SMT Placement Equipment Vendors, send an email to Julia Paulson - North American Corporate Communications at jpaulson@frost.com with the following information: Full name, Company Name, Title, Contact Tel Number, Contact Fax Number, Email. Upon receipt of the above information, an overview will be emailed to you.

Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence, and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers, and support staff spans the globe with offices in every major country.

New Growth Opportunities for SMT Placement Equipment Vendors

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Keywords in this release: surface mount technology, SMT, SMT placement equipment, frequent changeovers, electronics industry, enterprise resource planning software