An overview of the Indian electronics manufacturing equipment industry

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The electronics manufacturing landscape of the country is changing, with the local electronics output exceeding imports for the first time in 2016-17. It’s no surprise, therefore, that the demand for electronics manufacturing equipment is also on the rise.

By the ComConnect Consulting research team

Manufacturing equipment is crucial for ensuring the quality of any electronic device or component. In the course of the entire production cycle, an electronic device is handled by a range of manufacturing equipment. The ever increasing complexity of electronic assemblies and the miniaturisation of components have enhanced the demand for advanced and reliable manufacturing equipment.

As the PCBs and electronic components shrink in size, manufacturers face the challenge of accurately placing small components on miniaturised boards. Technological advancements, which are a necessity to meet the high performance expectations in the electronics field, combined with today’s high speed production, complete process automation and stringent quality control standards, are all driving up the demand for manufacturing equipment.
This study presents the growth opportunities and current trends in the Indian electronics manufacturing equipment industry with a special focus on surface mount technology (SMT) equipment.

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Opportunities galore
According to a research report published by Markets and Markets, the global surface mount technology (SMT) 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 electronics manufacturing equipment market is bound to grow along with the electronics manufacturing sector in the country. India’s domestic electronics output was for the first time higher than its imports in 2016-17. According to government sources, the domestic production of electronic goods for 2016–17 stood at US$ 49.5 billion, higher than the US$ 43 billion spent on imports. This seems to be an early signal indicating that the ‘Make in India’ initiative is improving the state of domestic manufacturing. This, in turn, will drive the demand for manufacturing equipment. According to industry experts, the manufacturing equipment industry in India is worth approximately US$ 500 million, including imported and local machinery.

For India, industry experts believe that the Make in India campaign, key policy initiatives by the government, the country’s deep-rooted entrepreneurship spirit; and domestic demand for consumer electronics as well as for telecom equipment, automotive, aeronautics, defence and medical electronics verticals will fuel growth. Moreover, high efficiency manufacturing, based on Industry 4.0 and the concept of the Smart Factory, which is being adopted by electronics manufacturers to upgrade product lines, will also accelerate the pace of growth. Surface mount technology (SMT) will drive the advanced manufacturing equipment market too.

Table 1: Types of SMT manufacturing equipment (Source: Frost & Sullivan)

Growth drivers
Electronics manufacturing services (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 set up manufacturing plants, and are not just designing equipment, in order to compete with EMS providers. This is driving the growth of the SMT equipment market.

The demand for SMT assembly lines will be bolstered further by the increase in demand for highly integrated and smaller devices in the consumer electronics, automotive, industrial automation, process control, telecom, Internet of Things (IoT), computing, storage, aerospace and defence markets.

According to industry experts, the major demand-generating sectors are:

  • Automotive
  • Consumer electronics
  • Telecom equipment (including mobile handsets)

Industrial electronics (including power and energy products)
The demand for SMT devices in the automotive segment has increased due to their ability to meet the standards of critical systems with zero defects. The number of electronic components used in an electric vehicle (EV) is higher than in 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 EVs, surface mount devices are used as they are lighter, occupy less space, are safe and last longer.

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 constraint on the size of the PCBs used. This could give the 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 how tech advancements have led to product innovations. A majority of the industry experts indicated that the set-top box product segment is generating the most demand for SMT manufacturing equipment.

Demand for SMT equipment is also high in the telecom (including mobile handset manufacturing) and energy sectors.

The demand for SMT equipment
Placement equipment is the most in demand in the SMT equipment market, primarily due to the growth in SMT assembly lines. For the same reason, the soldering and printing equipment segments are also expected to experience decent demand. Equipment like selective soldering machines, PCB cleaning machines and assembly lines are also in demand.

The necessity to enhance production speed (and the 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 with intuitive programming. AOI equipment is expected to become popular because of the use of machine vision-based algorithms that enable easy programming, flexibility and the ability to detect faults quickly while minimising false call rates.

Emerging trends in SMT
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 their use in smart factories. Here is a collation of their views.

Focus on precision: The tech advancements in manufacturing will largely focus on bringing precision to the manufacturing process to reduce defects, while optimising assembly operations to improve productivity.

Demand for ‘one stop’ solutions: There is an increased demand for integrated solutions to enable complete automation. Manufacturers are shifting from using individual SMT machines to integrated one-stop SMT assembly lines to get a competitive advantage.

Shift to 0201 geometry: A key trend is that India has moved straight to the 0201 geometry, leapfrogging the phase of making larger SMT products.

Affordable equipment for small products: Low cost SMT equipment lines for small products are becoming affordable. This trend is already driving the market.

Demand for small ‘things’: The rapid increase in the use of smaller IoT devices (known as ‘things’) is also driving the SMT market. Moreover, almost all the component vendors have migrated their processes to SMT to increase manufacturing speed, and use advanced CMOS (complementary metal oxide semiconductor) technology. All this has driven the components industry to adopt smaller packages.

Machines for smart factories
In the era of Industry 4.0, everything in a factory will be connected through the Internet and the cloud, enabling it to function as one smart system rather than as individual parts. As an integral part of a smart system, manufacturing equipment also needs to enable automation, data collection and connectivity. Hence, it should have all the capabilities listed below.
Predictive maintenance: One of the main tenets of Industry 4.0 is data collection.

Manufacturing equipment with the appropriate sensors collects different kinds of data, including data on how much the machine has operated, the conditions it has operated in and the condition of the components of the tool.

By collecting this data, machines can estimate when a component needs replacement. For example, the system will alert operators to replace a bearing that has experienced a heavier load and more frequent use sooner than a less used bearing. This predictive maintenance will keep machines running more efficiently and prevent downtime.

Improved utilisation: Manufacturers do not always use equipment as efficiently as they could, and idle time is a frequent occurrence. It is difficult to determine the reason for this idle time. However, data collection on things like line change, program stops and feed holds will improve the utilisation of manufacturing equipment.

Energy savings: Smart manufacturing equipment can collect data on energy usage patterns and help cut energy costs. Smart meters and other innovations help energy to flow more efficiently. A smart factory can use data on energy demand to ramp up production accordingly. Smart equipment can also shut down or reduce their power usage when not required.

Preventing improper usage: Smart manufacturing equipment can even identify improper use cases. For example, if a machine knows the amount of force or temperature it can withstand as well as how the operator plans to use it, it can send out an alert if it detects conditions outside of that norm. This can help prevent misuse caused by human error or malfunctions, which could avoid downtime as well as worker injury.

Enhanced quality control: Manufacturers spend a lot of time and resources on quality control, taking care not to let any faulty products slip through. Smart manufacturing equipment can collate the massive pool of data that smart machine tools collect, to spot potential quality issues. If a machine does not operate in the expected way, this will be shown up in the collated data. This helps traceability in manufacturing, and improves product quality by reducing the natural variation that comes with human actions.

Minimising the role of humans: In smart factory systems, a drastic change is expected with regard to the role of people. There will be a shift from humans physically operating a machine to it being operated by a computer, which also monitors it and analyses data.

The way forward
Across the world, the electronics manufacturing equipment market and electronics manufacturing services (EMS) industry grow hand in hand. However, the Indian EMS industry is not as mature as that of 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 electronics manufacturing equipment but also help EMS players to get a competitive edge in the market.
Moreover, the electronics manufacturing equipment market in India is dominated by imported products, with negligible local manufacturing of such equipment. This needs to change, and soon.

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