The European automatic test equipment (ATE) market: a new study by Frost & Sullivan

Citation

(2000), "The European automatic test equipment (ATE) market: a new study by Frost & Sullivan", Assembly Automation, Vol. 20 No. 3. https://doi.org/10.1108/aa.2000.03320cab.002

The European automatic test equipment (ATE) market: a new study by Frost & Sullivan

The European automatic test equipment (ATE) market: a new study by Frost & Sullivan

Keywords: Electronics industry, Software development, Automation

Improved economic outlook to trigger sharp surge in automatic test equipment sales

The fundamental concern for any player in the automatic test equipment (ATE) market is the development of a well-integrated test solution providing ease-of use, cost-effectiveness and flexibility. The optimum product should be capable of testing at sufficient levels and to suitable specifications in order to satisfy the demands posed by the electronics and semiconductor manufacturing industries.

The increasing importance and power of software in test solutions are a major driver for advancements in this direction. A new study by Frost & Sullivan, the international marketing consulting company, identifies the pursuit of innovation and new strategies in ATE as paramount to the industry's survival through the current revolution in electronic products.

The healthy European economic climate is expected to continue to fuel growth in the European ATE market over the next few years, with semiconductors, IT and telecoms and the automotive industries counting amongst the main beneficiaries of robust economic growth. Sales in the overall ATE market are forecast to climb from $0.82 billion in 1999 to $1.01 billion in 2006.

Sales of ATE are soaring again after having fallen victim to a period of under-investment and cut-backs in testing facilities at electronics manufacturing and assembly plants, says Paul Alexander, Research Analyst at Frost & Sullivan. He points out:

The high levels of new technology entering the ATE market, rising demand for complete test solutions and shorter product life-cycles are major contributory factors boosting revenues in the overall ATE market.

The rapidly advancing technologies in the key end-user industries, particularly the semiconductor, PCB sub-contractor and communications industries, indicate that the long-term viability and even the fundamental need for testing are uncertain.

Teradyne, Agilent Technologies (formerly Hewlett Packard), GenRad, Advantest, Schlumberger, LTX and SPEA count amongst the key participants in the European ATE market. In order to endure the increasingly intense levels of competition in the market, sensible acquisitions and mergers may prove favourable for many of the market participants, the study recommends.

Paul Alexander continues:

The dynamic nature of the semiconductor industry at present has been the main driver for change in the component ATE market, accounting for the largest portion of overall revenues.

Increasing levels of complexity, integration and changes in circuitry have made it necessary for strategies to be revised and improved in order to test the new generation of products. It is the developments in this direction that have fuelled the emergence and prolific growth of the SOC tester market.

Meanwhile, the increased density, compactness and the higher populations of components on smaller boards are confronting the test engineers in the PCB tester market with a number of problems. However, when suitable test strategies can be developed, the scope for revenue generation can often be increased.

The interconnection and verification tester market is, by a considerable margin, the smallest, and the most stable, of the three major segments under review in Frost & Sullivan's study.

Reviewing the competitive environment, Paul Alexander comments:

Competition in the European ATE market evolves around the technological capabilities of a tester, the level of fault coverage, cost of equipment, time-to-market and the after-sales services and support offered by the supplier. The accelerating rate of technological development in the end-user market means that, generally, competition is based on who can provide the most enhanced test strategies and/or overcome any test difficulties in the shortest amount of time.

In general, it is the larger companies boasting more expensive test equipment that provide the highest levels of service and support. For the smaller companies, competition is based mainly on price because the extent of their resources is not large enough to compete directly with the services and support offered by large multinational companies.

For the developed markets like Germany (the dominant force in terms of national markets), UK and France, competition hinges on technology. The manufacturer that can meet the technological test specifications and capabilities with a minimal price increase will seize the most substantial revenue share in the ATE market, the study concludes.

Report Code: 3781, Publication Date: May 2000, Price: 3,950 Euros.

For further press information, please contact Frost & Sullivan's Public Relations Department. Tel: +44 20 7915 7824 or Fax: +44 20 7730 3343; E-mail: kristina.menzefricke@fs-europe.com or see the company's Web site (www.frost.com) for details on Frost & Sullivan's Media Service.