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Palo Alto, CA, United States, 2006/10/03 - New analysis from Frost & Sullivan finds that the Chinese Surface Mount Technology (SMT) Equipment Markets earned revenues of $1,848.8 million in 2004 and estimates this to reach $3,530.9 million in 2011..
The Chinese surface mount technology (SMT) equipment market is a rapidly developing market and will continue to grow strongly mainly driven by demand from end-user sectors like telecom and computers. However, factors like declining prices of the SMT equipment are limiting the growth of the market. As a result, SMT equipment vendors are finding it hard to maintain a balance between reducing costs for customers, new product development, effective customer support and providing efficient after-sales service and continue growing.
New analysis from Frost & Sullivan finds that the Chinese Surface Mount Technology (SMT) Equipment Markets earned revenues of $1,848.8 million in 2004 and estimates this to reach $3,530.9 million in 2011.
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“The Chinese surface mount technology (SMT) equipment market has been developing rapidly since 2001 primarily from the growth of the EMS industry in China,” says Frost & Sullivan Research Analyst Fan Zhu. “An increasing number of OEMs are outsourcing their manufacturing operations to EMS providers in order to focus on key core competencies such as marketing and R&D. Sales to the EMS providers have been significantly replacing sales to OEMs in the total SMT equipment market since 2003.”
Leading EMS providers such as Flextronics, Solectron, FoxConn and First Computer have become the biggest buyers of SMT equipment in China and the Asia Pacific Rim since 2003.
The Chinese SMT equipment market is significantly affected by key factors such as price erosion, industry restructuring and the under-utilization of existing equipment. Declining cost of the equipment has been a major concern in the industry, which has led to declining market revenues.
“Since 2001, SMT equipment manufacturers have seen prices decline drastically, which has pushed their profit margin towards the breakeven point and reduced the overall size of the market,” says Zhu. “The price of SMT machines has experienced a steady decline during the historical period because of heavy competition and the imbalance between demand and supply. As a result, there is periodic flooding of the market with equipment leading to major price discounting.”
In an effort to gain market penetration, SMT equipment vendors offer attractive prices and financial support packages and lease out SMT equipment with return/upgrade options. SMT equipment vendors have had to maintain a balance between reducing costs for customers, new product development, effective customer support and providing efficient after-sales service midst severe competition.
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Chinese Surface Mount Technology (SMT) Equipment Markets