Electrical and Electronic Test Equipment Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Electrical and Electronic Test Equipment Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Electrical and Electronic Test Equipment Market is expected to grow at a CAGR of 9.5% during the forecast period. One major factor driving demand for electronic test and measurement equipment is the increasing need for accuracy and speed in designing, manufacturing, or repairing electronic products. The expansion of new electronic devices and emerging disruptive technologies, such as electric vehicles, self-driving cars, and 5G, is also driving demand in the market.

Key Highlights

• Circuit boards are integrated with electronic components in electronic devices. Because such circuit boards are used in critical devices with critical functionality, such as motor drive circuitry for industrial robots and electronic control units for electric vehicles (EVs), they must deliver a high level of quality and reliability, which drives the demand for robust electrical and electronic test equipment.
• The digital electronic test equipment market is seeing increased investment from many of the top manufacturers of test solutions for smart devices. Numerous government regulations also require the testing of electronic devices used in the industry. For instance, the Interference-Causing Equipment Standard (ICES-003), which mandates technical requirements related to radio noise produced by Information Technology Equipment, was granted by the Canadian Department of Innovation, Sciences, and Economic Development in January 2019. These elements also encourage market players to broaden their product lines' scope to accommodate current and future market applications.
• The recent COVID-19 pandemic impacted semiconductor testing, one of the essential applications of electrical and electronic test equipment. SEMI published a quarterly report outlining two market scenarios for semiconductor manufacturing in the second half of 2020. First, due to the uncertainty surrounding the impact of COVID-19 on the semiconductor industry, semiconductor sales may continue to fall. Second, the semiconductor industry could benefit from rising chip sales. This is expected to have a negative impact on the growth of the semiconductor manufacturing industry, resulting in a decrease in demand for semiconductor testing.
• However, due to the international economic downturn, a slowdown in investment from the data processor and smartphone segments, and volatility in demand from semiconductor companies, the semiconductor automated test equipment market has fluctuated over the last few years.

Key Market TrendsElectric Vehicles Segment is Expected to Witness Significant Growth

• The electric car market has rapidly evolved with ongoing developments in the automotive industry, favorable government policies, and support in subsidies, grants, and tax rebates. Electrical and electronic test equipment such as ground resistance testers, Micro ohm meters, multimeters, voltmeters, and others are widely used in the production and maintenance of electric cars for testing various parts and systems such as motors, power systems, batteries, charging systems, wiring, connectors and many other.
• For instance, According to International Energy Agency (IEA), the global electric car sales in 2021 were 6.6 million, which is doubled from 3.0 million in 2020. The increasing sales of electric vehicles will drive the electrical and electronic test equipment market.
• Automakers have been vigorously working to enhance electric vehicle (EV) testing performance as the automotive industry advances battery technologies and power conversion. In the current market, semiconductor manufacturers are racing to develop ICs for safety-related and autonomous driving features. ISO 26262, which includes guidelines for semiconductors in the upcoming version, imposes stringent new requirements on ICs for safety-critical car systems. As the computational load for situation-analysis functions increases, there are also new processing demands, necessitating electronic test equipment such as semiconductor test equipment and driving market growth.
• It is also expected that various governmental initiatives will drive the market. For instance, in May 2020, the UK government announced that it would invest GBP 500 million to support the rollout of new rapid charging hubs to ensure that drivers are never more than 30 miles away from a charging station to achieve the UK's net-zero goal by numerous investments to decrease vehicle emissions across all modes of transportation. A rapid charging fund will be a part of this investment to assist businesses with the cost of tying fast charge points to the power grid. It is anticipated that such initiatives will expand the electrical and electronic test instruments market.
• As a result, rising investments in these sectors will drive the growth of the electrical test equipment market significantly. Major automakers such as General Motors, Toyota, and BMW intend to release 400 models by 2025, with global sales of 25 million expected. In 2021 Ford Motor committed to increasing its investments in electric vehicles to USD 30 billion by 2025, up from USD 22 billion in 2023.
• Similarly, in 2020, Volkswagen and Chinese ventures will invest USD 17.5 billion in electric vehicles by 2025. As a result, the increasing global demand for electric vehicles propels the electrical and electronic test equipment market.

Asia-Pacific is Expected to Witness Fastest Growth

• The Asia-Pacific region significantly dominates the semiconductor and electronics industry, primarily driven by the extensive manufacturing base in China, Japan, South Korea, and Taiwan. India has also been rapidly maturing in the electronics industry final assembly.
• Large contractors like Foxconn Technology Group and Megatron Asia Pacific Ltd. are establishing plants in India. According to the Union Budget 2021-22, the government of India (GOI) has set a target of INR 180 billion in investments in electronics manufacturing by 2021-22.
• Furthermore, emerging markets such as China have become appealing due to developing indigenous industries and subsequent export acceleration, stringent standards implementation, and rapid urbanization.
• The region's increasing testing and inspection activities are expected to create a significant demand for electrical test equipment. Previously, most regional companies performed testing, inspection, and certification in-house. However, due to China's Compulsory Certification (CCC) regulations, there is now a greater emphasis on the need for stringent regulatory standards. As a result, there has been a rising in the outsourcing of testing services, which has increased the demand for test equipment among testing service companies.
• Aside from the consumer electronics industry, the region is dominated by low-cost carriers. As a result, the majority of inspection and service activities are outsourced. As a result, Singapore has established itself as a regional hub for maintenance and inspection services. For over two decades, allied players in Singapore have maintained regional dominance. However, countries such as Indonesia, Vietnam, and Thailand are challenging the country's dominance.
• Furthermore, key players such as Yokogawa (Japan), Anritsu Corporation (Japan), Rigol Technologies (China), and ScienceTech Technologies have established themselves in the region. These businesses are constantly involved in product innovation, providing solutions for various industry applications.

Competitive Landscape

With the existence of numerous regional and global players, the global market for electrical and electronic test equipment is expected to be fragmented. The established players in the market are forming acquisitions, strategic partnerships, and new product development to increase their geographical presence and market share.

• January 2022 - Anritsu Corporation launched its new modular RF hardware upgrade for the Radio Communication Test Station MT8000A, the 0.4-7.125GHz Enhanced RF Module MT8000A-033, leveraging the modular architecture to enable extended all-in-one 5G NR test coverage. This new RF module can be used to improve the functionality of existing MT8000A units.
• March 2021 - Anritsu introduced the TRX Test module, MU887002A, to enhance the efficiency of 5G wireless communication device production-line inspections and its space-saving universal wireless test set.

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