Automatic test equipment vendors struggle in uncertain economic times

8 May 2002 News

With demand for electronics slipping in conjunction with the economic downswing, automatic test equipment (ATE) vendors are struggling to satisfy customer's questions regarding the best market investment opportunities. According to trade analysts Frost & Sullivan, this industry generated revenues nearing $464m in 2001 and it projects that this will exceed $918m by 2008.

"The ATE services market is dependent on current and anticipated demand for electronics," says Frost & Sullivan industry analyst Sunderraju Ramachandran. "The current economic downturn is the leading cause of large inventory build-up throughout the chain of consumption, resulting in a subsequent fall in demand for ATE services."

End users, distributors, and manufacturers have all experienced a surplus in stock of electronic components, modules and PCBs. However, the group expects this trend to slow as global economies rebound. In the interim, industry participants are working to develop their products in order to satisfy emerging demands.

"The measurements required of ATE are getting more complicated," says Ramachandran. "As vendors keep up with technological developments, they are also developing sophisticated testing equipment."

Consequently, customers are now looking to vendors not only for advanced technology solutions, but also for advice, education, and support.

www.testandmeasurement.frost.com

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