SMT & Inspection | January 30, 2007
Automation industry growth boosts<br>SMT odd form placement market
A new analysis from Frost & Sullivan—SMT Odd Form Placement Equipment Market—reveals that the market earned revenues of $50.8 million in 2006 and estimates to reach $73.5 million in 2013.
Despite the popularity of surface mount devices on the circuit board, few components such as relays, connectors, and so on are still considered through-hole devices. The continuing presence of through-hole components and mixed technology boards drive an automated and accurate means of odd form assembly. "The adoption of an automated process during final assembly and end of line process has numerous advantages, the most important factor being cost," says Frost & Sullivan Research Analyst Deepa Mathew. "Assemblers in the west are compelled to adopt machines for odd form placement due to high labor wages, whereas in the east, odd form placement machines are witnessing adoption for their precision and higher throughput." Final assembly is traditionally labor intensive and hence is subject to fluctuating labor rates across the world. Outsourcing and increased globalization of electronics assembly have resulted from lower labor charges in certain geographic regions. In addition, human errors lead to major defects in the final product, with additional efforts required to rectify them. As a result, these machines are gaining popularity owing to their accuracy. Assemblers are realizing the cost benefits of automating their end of line process due to significant cost savings achieved by avoiding rework and associated repair. Price is a main competitive factor and vendors face extreme pressures regarding balancing out costs with machine performance. End users very often look for low-cost options causing equipment manufacturers to lower machine prices. Machines with odd form handling capabilities are highly priced depending on their inherent functionality. This deters wide adoption especially in regions where manual labor is a viable option. Moreover, custom tooling is mostly required based upon the end user requirements, which may be as high as the cost of the base platform itself. "A significant factor restraining the market is the high price of these machines," explains Mathew. "Since EMS providers that form a majority of the customers operate under extremely low profit margins, they need to be aware of the cost savings before investing in new equipment." Manufacturers should focus on support services and warranty that are part of the sale of odd form placement equipment. They need to investigate the reasons behind the manual process of back end assembly and educate the assembler on the tremendous cost savings in the long term. This is likely to boost sales of SMT equipment.
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