Changing Landscape of Communication Infrastructure and Digital Transformation in Industries are Uplifting the Test and Measurement Equipment Market: IndustryARC
HYDERABAD, India, July 1, 2019 /PRNewswire/ -- The ongoing digital transformation will likely to propel the retrofitting of installed base devices with wide range of test and measurement equipment such as electrical tester, digital multimeters, digital oscilloscope, spectrum analyzer and environmental testers. Data centers, advanced telecom infrastructure, and industrial internet of things (IIoT) are some major end-use applications that require advanced measuring equipment to meet modern testing requirement. For instance, IIoT comprises of hardware/sensors, software, and services, each of these components require reliable testing equipment such as signal quality analyzer, calibration tester, condition monitoring tester to ensure right synchronization in devices. During 2017-2019, approximately 5 billion new connected devices were installed across industries that is expected to reach approximately 20 billion by 2022. Similarly, the growing number of connected devices are augmenting the need for hyper scale data center. These data centers utilize various complex electronics devices and thus large number of test and measurement equipment are deployed in these data center to monitor device condition, signal strength, and data transmission condition. In 2019, Google announced to invest approximately $13 billion to expand and create data centers across the U.S. These data centers will bring new opportunities for the market growth. The test and measurement equipment market is forecast to reach $33 billion by 2025 and is estimated to grow at a CAGR of 4.05% during the forecast period 2019-2025.
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The test and measurement equipment market is poised to grow at a rapid pace owing to wide range of applications in automotive sector. The growing adoption of electric and hybrid vehicles and emerging demand for autonomous vehicles is likely to accelerate the market growth during the forecast period. Most of the autonomous vehicle use wireless communications standards such as long term evolution (LTE) and Wi-Fi for their infotainment system and other automobile accessories. These modern electronic devices in automobiles are boosting the need of RF testing equipment (Radio Frequency testing equipment) significantly. The number of autonomous vehicle is expected to increase from approximately 8 million units to 60 million units during 2019-2028 at a CAGR of approx. 20%. Similarly, the number of installed electronics components are more in electric and hybrid vehicles that need testing and measuring equipment to check the important parameters like voltage, current, and torque. In 2018, approximately 1.8 million electric vehicles were sold, which is more than 70% as compared to 2017. Evaluation of these new energy vehicles will boost the growth of test and measurement market. In automotive application, the market is estimated to grow at a CAGR of 4.5% during 2019-2025.
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The Asia Pacific is the largest region for the test and measurement market due to presence of strong manufacturing base. Most of the demand from APAC region is experienced from China India, Taiwan, and Japan due to growth in electronics and automotive industry. China's National Bureau of Statistics estimated the sale of consumer goods in 2018 to approximately $1,436.8 billion, up by 9.8% from the previous year. The growing consumer good industry in China is likely to bring more investment scenarios in the country. Similarly, Japan is one of the largest manufacturer of electronic equipment, automobiles, machine tools and other advanced machinery. In Japan, the revenue for consumer electronics segment amounts to $11,031m in 2019. Based on the data provided by Statista, Japan consumer electronics user penetration is 23% in 2019, which is expected to hit approximately 33% by 2023. Similarly, within APAC, India has started producing wide range of electronic products under major standards with latest government initiatives such as T&M India 2020. According to the Department of Electronics and Information Technology (DeitY), approximately 2,000 chips are being designed every year in India. Under the initiative of Make in India campaign, India is likely to see an investment of $1.5 billion in electronics sector during 2018-2020. The expansion of these new plants is likely to bring rapid growth for test and measurement equipment in the country. Asia Pacific is set to grow at a CAGR of 5.2% during 2019-2025.
Test and Measurement market Growth Drivers
Development of communication infrastructure coupled with rising popularity of IoT based technology: Testing and measurement of equipment, devices, and signals are the integral part of communication network. Thus, any new development in communication network will have a positive impact on testing and measuring equipment market. Presently, communication industry is witnessing several transformation due to evolution of 5G technology and data centers. These new technologies will translate into increased device complexity and need a rigorous testing in entire life cycle of products to ensure maximum performance. According to the report published by GSMA on the mobile economy in 2018, the 5G technology is expected to penetrate into the market with 14% of total connections by 2025. Similarly, global IoT market is experiencing surge in demand due to availability of large number of affordable connected devices. The number of IoT connections (cellular and non-cellular) is expected to increase by more than threefold during 2017-2025, reaching 25 billion by 2025. The devices used in 5G and IoT connection are likely to augment the demand for signal analyzer, digital calibrator, and spectrum analyzer.
Increasing demand from power management and consumer electronics application: Power sequencing and power supplies are few of the major power management applications that are augmenting the need of electronic test equipment. Similarly, the growing design complexity of modern consumer electronics are augmenting the need for precision testing equipment. For instance, in power management and consumer electronics applications, 8-bit oscilloscope were used traditionally. However, with strict margins for design, the engineers are now looking for high resolution oscilloscope with analog-to-digital converters (ADC) and high number of bits. These new applications are creating opportunities for advanced test and measurement equipment. Moreover, the power management application are growing significantly due to increasing number of data centers worldwide. The data centers market is increasing at yearly average growth rate of 12% since 2016.
R&D, Investments and Funding
In February 2019, Electro Rent Europe and Microlease announced a merger into Electro Rent Corporation. This merger will make Electro Rent the largest independent test and measurement equipment solutions provider in Europe.
In December 2018, Anritsu Company partnered with PCTEST Engineering Laboratory, Inc. to conduct SAR (Specific Absorption Rate) testing of 5G devices by using Anritsu's Communication Test System MT8000A. This communication system will be used in laboratories to emulate a 5G New Radio (NR) radio access network to provide advanced 5G NR technology to the mobile operators and device makers.
In September 2018, Keysight Technologies, Inc. introduced Keysight S9100A 5G multi-band vector transceiver (S9100A), it is a compact and scalable 5G base station manufacturing test solution that will allow the testing of 5G New Radio (NR) network equipment and radio components at scale to aid volume manufacturing.
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The Major Players in this Market Include
The major players in the test and measurement market include Bureau Veritas, Danaher, Keysight, SGS, Thermo Fisher, Texas Instruments Incorporated, XSENSOR Technology and other.
The market is highly fragmented and vendors are facing huge challenge to maintain a steady profitability. Thus, major vendors are looking forward to consolidate this market through merger and acquisition. While expertise and economy of scale is the key strength for major vendors, small vendors will optimize the supply chain to reduce the operational cost.
Conclusion:
The growing number of data centers and changing landscape of telecommunication sector are likely to create new opportunities for advanced precision test and measurement equipment. The emergence of 5G and LTE network is likely to play a key role in augmenting the need for test and measurement equipment. Among applications, automotive sector is will augment the demand for test and measurement equipment due to growing installation of electrical and signal transmitting devices in autonomous and electric vehicle. The design complexity of devices in power management and consumer electronics application is expected to bring the requirement for special purpose test and measurement equipment. Moreover, APAC is likely to witness fast growth owing to rising investment in automotive, electronics, and other industrial sectors.
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