Automatic test equipment (ATE) is automated machinery that performs and analyses the results of functionality, effectiveness, dependability, and stress tests on electronic systems and devices. ATE robotizes traditionally manual electronic test equipment and processes with minimal human intervention. It tests various electronic devices currently in use to ensure their efficiency, operability, and the protection of those who will use them or who will directly or indirectly benefit from their use.
The rising need for industries to cut costs to eliminate significant damage losses and enhance customer satisfaction is a major factor driving market expansion. ATE is used to identify flaws in Devices Under Test (DUT) and contributes to ensuring device quality. The market demand is driven by a substantial increase in the number of consumer electronics and a growing emphasis on quality improvement among businesses.
The utilization of test equipment effectively in the semiconductor and automotive industries is the primary growth driver of the ATE market. Implementing ATE with multiple features, including optimal quality potential and frequency, can reduce the cost of the semiconductor device. Furthermore, technological advancements, the complexity of designs, and the need for effective testing are driving the expansion of the ATE market.
Growth in Consumer Electronics and the Surge in Connected Devices to Drive the ATE Market
The increase in smartphone sales primarily drives the expansion of the consumer electronics industry. In the coming years, technological advancements and the introduction of 5G technology will fuel the smartphone market. In the fourth quarter of 2020, smartphone manufacturers shipped approximately 394 million units worldwide, compared to 354 million units in the first quarter of 2021. Global shipments increased by 20% year-over-year during the first quarter of 2021, reaching 354 million units.
In addition, there is growing consumer demand for products with greater flexibility, higher quality, and new features at lower prices, which has increased ATE market demand. It is envisioned that by 2025, nearly 80% of the population will own mobile devices. To stay competitive in the marketplace, businesses are placing a greater emphasis on customer service and satisfaction, which is a crucial success factor. Before packaging and selling the final product to the end-user, businesses conduct end-to-end device testing.
Furthermore, the proliferation of smartphones has contributed to the increased demand for semiconductors, which has increased the demand for automatic test equipment (ATE). Smartphones undergo battery tests during the initial performance evaluation phase to address heating and stability concerns. Priority has been placed on testing battery life during the design phase to resolve any battery life-related issues before production. In addition, testing difficulties continue to increase due to technological advancements and the development of techniques like carrier aggregation for LTE, Bluetooth, GNSS receivers, and wireless LAN. These factors are major growth drivers for the ATE market.
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The noble coronavirus negatively impacted the automated test equipment market. The government declared lockdowns, resulting in the cessation of production, the closure of all work environments, the restriction of public interactions, and the temporary termination of manufacturing and trading activities worldwide. The market's operations were disrupted by implementing the lockdown and public interaction.
In the initial phase of 2020, the entire supply chain was disrupted by the temporary shutdown of multiple manufacturing facilities and labor shortages. During the first few months of the lockdown (the first and second quarters of 2020), the imbalance between supply and demand and movement restrictions negatively impacted market growth.
Gradually, as economies adopted strategies to combat the effects of covid, the market for ATE began to recover. After recovering from the coronavirus outbreak, ATE companies increased their cognitive capabilities, artificial intelligence, and robotic process automation investments. In addition, the businesses developed effective crisis management strategies, such as focusing on products and services of the next generation and strengthening long-term contracts.
Asia-Pacific and North America are anticipated to account for the most significant market shares during the forecast period. Asia-Pacific will account for USD 7,657 million at a CAGR of 4%, whereas North America will account for USD 1,639 million at a CAGR of 3%.
The significant presence of semiconductor industries in Asia-Pacific is the primary reason for the region's dominance over the forecast period. A rise in the number of government initiatives undertaken by China, Indonesia, Singapore, Thailand, Malaysia, and Taiwan to develop more advanced manufacturing processes will also contribute to economic expansion. Further, China and Taiwan are anticipated to account for the largest regional revenue share. Future technologies such as adaptive testing, advanced Design-For-Test (DFT), fine-pitch probe cards, and design standards significantly alter the market dynamics. It is envisioned that these technologies will play a significant role.
North America will experience substantial growth due to the expanding employment of automated test equipment in the aerospace and defense industries. The companies in the market prioritize forming partnerships and collaborations and expanding into new geographies.
Key players in the global automated test equipment market are Teradyne Inc., Advantest Corporation, Chroma ATE Inc., Teradyne Inc., Advantest Corporation, Chroma ATE Inc, Teradyne Inc., Advantest Corporation, VIAVI Solutions Inc., Keysight Technologies, Astronics Corporation, Teradyne Inc., Advantest Corporation, and Chroma ATE Inc.
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