Where is the Indian SMT market headed?

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Technological advancements, which are a necessity to meet the high performance expectations in the electronics field, combined with today’s high speed production and quality assurance standards, will drive forward the adoption of SMT manufacturing equipment.

By Sudeshna Das

This study analyses the growth opportunities and current trends in the Indian surface mount technology (SMT) equipment market, including placement, inspection and soldering equipment, screen printers, as well as rework and repair equipment.

Market size and opportunities
As PCBs and electronic components become more miniaturised, the challenge that manufacturers face is in accurately placing tiny components on smaller, yet more complex boards. This has fuelled the demand for advanced SMT equipment with a high degree of reliability and accuracy.
According to a research report published by Markets and Markets, the surface mount technology market is expected to reach a turnover of US$ 5.42 billion by 2022, growing at a CAGR of 8.9 per cent between 2017 and 2022. The market’s growth will be primarily driven by higher demand for miniaturised consumer electronics products and the enhanced adoption of electric vehicles with advanced features for connectivity, entertainment and safety.
The Indian SMT manufacturing equipment market in India is also bound to grow along with the electronics manufacturing sector in the country. The Indian electronics market is one of the fastest growing in the world and is anticipated to reach US$ 400 billion in 2022, with domestic manufacturing climbing to over US$ 100 billion. This burgeoning market presents an attractive opportunity to suppliers of SMT manufacturing equipment.
According to industry experts, since India still doesn’t have a mature electronics manufacturing service (EMS) industry, the best estimate of the size of the domestic SMT equipment industry would be about 75 – 80 per cent of the EMS industry. The total market is segmented according to the type of SMT equipment and further sub-segmented based on the technology used (Figure 1).

Figure 1: SMT equipment market segmentation
Figure 2: Expected growth rate of the SMT manufacturing equipment market in India

Eighty per cent of the survey participants forecast that the Indian market for SMT equipment used in the electronics manufacturing industry will grow at a rate of up to 20 per cent per year (Figure 2). However, most of them also mentioned the sudden dip in the market over the last six months due to demonetisation and GST related issues.


Methodology
The methodology adopted to collate quantitative and qualitative information about the surface mount technology equipment market began with secondary research. The findings were then analysed and verified through primary research by conducting extensive interviews with key industry experts. These senior professionals shared their insights on the following topics:
1. Market size
2. Market opportunities
3. Approximate growth rate
4. Market drivers
5. Market trends
6. Types of equipment in demand
7. Market challenges
A trend analysis was done on the basis of their inputs


Market drivers
The electronics manufacturing service (EMS) providers need an increasing number of SMT equipment product lines in order to meet the demand from customers across different industry verticals. In addition, many original design manufacturers (ODM) have also started manufacturing plants, rather than just designing equipment, in order to overcome the increasing competition from EMS providers. This will further drive the growth of the SMT equipment market.
The trend for adopting SMT assembly lines will be bolstered further by increasing demand for higher frequency, highly integrated and smaller devices in consumer electronics, automotive, industrial automation, process control, telecom, Internet of Things (IoT), computing, storage, aerospace and defence markets.
According to survey participants, the major demand-generating sectors are:

  • Consumer electronics (including mobile phones)
  • Automotive

The consumer electronics segment is transitioning from manual, analogue systems to digitised and automated control systems. With the increased use of smart portable devices and wearables, there is a heavy size constraint on the PCBs used. This could give a first-mover advantage to a manufacturer who can invest in new SMT equipment that supports miniature sized PCBs or components. Feeder technology, flexible gantries, and high-accuracy optical encoder systems are examples of product innovations as a result of technological advancements. A majority of the industry experts indicated that set-top boxes were the most demand-generating product segment.
The demand for SMT devices in the automotive segment has increased due to their ability to meet the needs of the critical systems with zero defects. The number of electronic components used in an electric vehicle (EV) is more compared to any conventional vehicle, as the former has an electric motor, battery and other complex connections to ensure optimum utilisation of power. Owing to the critical role of electronic components in these EVs, surface mount devices are used as they are lighter, occupy less space, are safe and last over a longer period of time.
Demand for SMT equipment is also high in the telecom sector (including mobile handset manufacturing) and energy segments. Moreover, with the burgeoning LED industry, low cost, lighting-specific SMT equipment have started making inroads into the market.

SMT equipment in demand
Placement equipment represents the largest product segment within the SMT equipment market. Experts unanimously predict a steady demand in this segment. Soldering and printing equipment are also expected to experience decent demand (Figure 3).
However, 50 per cent of the experts also emphasise the importance of online quality assurance during manufacturing. They indicate that the improved speed and flexibility of quality assurance procedures has generated demand for advanced SMT inspection systems including automatic X-ray inspection (AXI) systems and automatic optical inspection (AOI) systems. AXI equipment is expected to gain from the integration of computer tomography and intuitive programming. AOI equipment is expected to become more popular because of the use of machine vision-based algorithms that enable easy programming, flexibility, and the enhanced ability to detect faults quickly while minimising false call rates.

Figure 3: Survey participants’ rankings of the major demand generating product segments

Market pulse
Industry experts also shared some insights about emerging trends that will shape the SMT manufacturing equipment market in India. They believe that there are many advantages of using this equipment, such as lower manufacturing costs, higher component density, as well as simpler and faster automation leading to smart factories. Here is a collation of their views.
Focus on precision: The technological advancements in SMT will largely focus on bringing precision into the manufacturing process to reduce defects, while optimising the use of assembly operations to improve productivity.
Demand for ‘one stop’ solutions: There is an increased demand for integrated solutions to enable fully automated control solutions. Therefore, customers are also shifting from using individual SMT machines to integrated one-stop SMT assembly lines to get a competitive advantage.
Shift to 0201 geometry: One of the key trends is that India has moved straight to the 0201 geometry, leapfrogging the phase of making larger SMT products.
Demand for small ‘things’: With the rapid increase in the use of smaller IoT devices (known as ‘things’), the high volumes needed will drive the SMT market.
Moreover, almost all the component vendors have migrated their processes to SMT to increase manufacturing speed, use advanced CMOS (complementary metal oxide semiconductor) technology, and due to the decreased interconnect widths in ICs. This has essentially driven the components industry to adopt smaller packages.


Major contributors to this report

  • Suresh Nair, director, Leaptech Corporation
  • Praveen Madaan, country head, Juki India
  • Sankar Narayanan, MD at Anvin Electronics Pvt Ltd, as well as GM, Accurex Solutions Pvt Ltd
  • A. Srinivasa Moorthy, director, design engineering, D4X Technologies Private Limited
  • L. Sampath, MD, EMST Marketing Pvt Ltd

Moving forward
Worldwide, the SMT equipment market is primarily driven by the electronics manufacturing services (EMS) industry. However, this has not matured enough in India compared to other Asian countries. Most of the Tier 2 and Tier 3 EMS vendors still act as assemblers (they just do the job work of PCB assemblies) rather than making the entire ‘box build’ unit or taking on the complete production of an electronic device. The transformation of EMS players from assemblers to ‘box build’ service providers will not only enhance the demand for SMT manufacturing equipment but also help EMS players to get a competitive edge in the market.
However, for this, EMS players need to develop three major capabilities—in-house supply chains (covering component engineering), DFx (Design for X where x stands for cost, assembly, manufacturing, testing and the environment) and finally, test and repair capabilities.

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