How SMT Equipment Pricing Could Affect Market Growth

9 May 2000

Research by Frost & Sullivan Shows How SMT Equipment Pricing Could Affect Market Growth

    MOUNTAIN VIEW, Calif.--May 9, 2000--As demand for world surface mount technology (SMT) soldering equipment increases, manufacturers need to address concerns about pricing that could limit the markets' growth potential.
    According to new strategic research from Frost & Sullivan ( www.frost.com ), the "World SMT Soldering Equipment Markets" generated $398.7 million in revenues in 1999. This market is projected to reach revenues of $886.8 million by 2006.
    This market is currently experiencing strong growth from contract electronic manufacturers (CEMs) who are seeing their business increase as original equipment manufacturers (OEMs) outsource more assemblies. As the Pacific Rim economy continues to recover, the demand for electronics will increase, leading to more production.
    "CEMs represent the largest portion of the market share in the SMT soldering equipment market," says Frost & Sullivan analyst Keith Robinson. "In order to increase revenues, some SMT soldering equipment manufacturers are targeting CEMs that participate heavily in the telecommunications industry, since the telecommunication industry is expected to experience robust growth throughout the forecast period of this study."
    The reflow segment of the soldering equipment markets is by far the leading process in the market. This segment accounted for $305.6 million in revenues in 1999 and is projected to reach $753.5 million by the end of the forecast period. As the electronics industry continues its trend of miniaturization, surface mount devices (SMDs) are being used more and more.
    "The reflow process is considered the best method to attaching SMD components to an assembly," Robinson says.
    If this is the best method of assembly, why are some electronic manufacturers reluctant to change?
    "Some electronic assembly manufacturers believe converting to the SMT process is too costly," says Robinson. "This limits sales for reflow soldering equipment. It is expected that the conversion prices will continue to be high and certain end user industries, such as the automotive market, will continue to be slow in their conversion to the SMT process, which will limit revenue growth for reflow soldering equipment manufacturers."
    Frost & Sullivan presents 2000 Marketing Engineering Awards to companies that have worked hard to make a positive contribution to the world SMT soldering equipment industry. The Brand Awareness Development Award is given to Electrovert while the Product Quality Leadership Award goes to Technical Devices.
    Companies participating within this industry include: Advanced Techniques; Aic Technologies Incorporated; Automated Production Systems Incorporated; Automation Unlimited; Btu International; Conceptronic Incorporated; Electrovert Incorporated; Ersa Soldering Systems; Exselect Engineering Ltd.; Heller Industries; Manix Manufacturing; Manncorp; Novastar Technologies; Panasonic Factory Automation; Plasma Etch Inc.; Quad Systems Corporation; Radiant Technology; Rehm U.S.A.; Research International; Samsung Technology; Seho U.S.A. Inc.; Sensbey Incorporated; Sierra Research and Technology; Sikama International; Technical Devices; Tomken Industries Incorporated; Vitronics Soltec and Wenesco Incorporated.
    "World SMT Soldering Equipment Markets"