DUBLIN – The global automated test equipment market was valued at $3.84 billion in 2018 and is expected to reach a value of $4.72 billion by 2024, a CAGR of 3.53% from 2019 through 2024, according to ResearchandMarkets.
The ATE market is primarily dependent on semiconductor chip volume, the firm says. The industry is positively impacted by the success of consumer electronic devices, such as computers, smartphones, tablets, etc. Subsequently, the roll out of devices with new features and innovation is expected to fuel growth.
Significant investments in the hardware market provide engineers and scientists flexibility, miniaturization, and portability to adapt to changing needs, while offering a smaller form factor that occupies less space on the manufacturing floor and consumes less energy than traditional instrumentation equipment. As a result, product offerings in the market are moving toward integrated solutions, while offering flexible options for a scripting language.
The semiconductor market is highly competitive due to upgraded technologies and constant R&D. The price of a chip may fall to 50% in the coming years, which implies the cost of production keeps changing due to emerging technologies, leading to decline in demand for products that have become technologically obsolete.
The aerospace and defense industry witnessed a rise in the adoption of intricate devices in the last three decades, owing to increased government defense spending. This has led to the development of technology at a rapid pace, with innovation leading to improvement in the efficiency of existing tools and further covering the new scope of operations useful for a wide range of functions. With larger revenues, the aerospace industry is expected to spend a significant amount in automated test equipment, says ResearchandMarkets.
Engineers are facing the hurdle of developing test plans for new technologies, while also supporting legacy systems and preventing obsolescence.
The other major driver in the market is the regulatory environment. For instance, military radios are increasingly being tested to the new specifications of civil airborne software and hardware standards, such as RTCA/DO-178B, Software Considerations in Airborne Systems and Equipment Certification, and RTCA/DO-254 Level C, Design Assurance Guidance for Airborne Electronic Hardware.
With the implementation of new technology, the need for upgrading test equipment arises. For instance, US Naval Air Systems Command (NAVAIR) refreshed the technology as they transitioned from the older system to the newer system for testing aircraft and weapons on carriers. The organization maintained backward compatibility as a requirement, enabling the eCASS stations to leverage the test program set from the older CASS program.
Obsolescence mitigation is driving increased investment in test equipment. Most military and aerospace programs run for years, and companies must keep the technology fresh, so they can add new capabilities, plus address obsolescence issues.
With the increasing revenues of aerospace manufacturers, the investment in test equipment is expected to increase because of the practice of controlling the input costs to increase the profit margins.
The growing demand for low-cost consumer products, coupled with a steady rise in the adoption in the semiconductor industry, has been identified as the major driver for growth of the ATE market in the North American region. ATE represents a cost-effective solution in the long-term, as the equipment can be used to test large volumes of samples with minimal human intervention, says the research firm.
The market in Canada is driven by the resurging mining industry and the increase in defense spending. Key upcoming identified accounts for the providers are higher education institutes.
The US aerospace industry exports more than 60% of all aerospace production. Many foreign firms are attracted to the country's aerospace market, as it is the world’s largest, characterized by a skilled and hospitable workforce, diverse offerings and extensive distribution systems. Automated test equipment further finds its application in the defense sector. The US defense industry has a budget allocation more than the entire economy of more than half of the existing countries in the world.
The application of ATE in consumer electronics such as mobile devices is prospering to make the release schedules shorter. With growing cybersecurity threats and rising complexity of applications, organizations are also enhancing test coverage for their enterprise application suite with the help of ATE throughout the region.