The global automated test equipment (ATE) market size was valued at USD 9.44 billion in 2023. It is estimated to reach USD 15.12 billion by 2032, growing at a CAGR of 6.1% during the forecast period (2024–2032). The ATE industry has experienced increased demand due to consumer preferences for goods that offer enhanced flexibility, improved quality, and innovative features, all at reduced rates.
Automatic test equipment, also called automated test equipment (ATE), is any instrument that performs tests on a device, also known as the equipment under test (EUT), device under test (DUT), or unit under test (UUT), by automating measurements and evaluating test results. Automatic test equipment (ATE) can be a simple computer-controlled digital multimeter or a complex system containing dozens of complex test instruments capable of automatically testing and diagnosing faults in complex electronic packaged parts or on-wafer testing, including system on chips and integrated circuits.
Automatic test equipment is extensively utilized in the electronic manufacturing sector to test electronic components and systems after fabrication. ATE is also used to test avionics and automobile electronic modules. It is utilized in military applications such as radar and wireless communication.
There has been a drastic surge in the penetration of smartphones and connected devices globally. Almost 80% of the world's population is expected to have their own mobile devices by the end of 2025. Companies increasingly focus on customer service and satisfaction to stay competitive, which is critical for success. Therefore, companies are making efforts for end-to-end device testing before packaging and selling the finished product to the end user.
Furthermore, a company manufacturing a single device has a fragmented ecosystem with multiple OEMs involving various architecture and operational standards. This increases the testing complexity and the number of testing tools needed. Further, the technological changes in smartphones, tablets, and System-on-Chip (SoC) based products are driving the growth of the ATE market.
Automated Test Equipment (ATE) is used to identify defects in Devices Under Test (DUT) and helps ensure device quality. A significant increase in the number of consumer electronics, along with a surging focus of the companies on quality improvement, is driving the market demand. In addition, the consumer electronics industry has grown significantly in terms of revenue. The major factor for the growth of the consumer electronics industry is the rise in smartphone sales.
Additionally, technological advancements and the emergence of 5G technology will drive smartphone demand in the forthcoming years. Smartphone companies shipped approximately 394 million smartphones worldwide in the fourth quarter of 2020 and 354 million in the first quarter of 2021. This shows that global shipments grew 20% YoY, reaching 354 million units in the first quarter of 2021. Consumer demand for products that exhibit more flexibility, better quality, and new features at lower prices has also spurred the demand in the ATE market.
Over the past few years, many ATE manufacturers have undergone mergers and acquisitions. Many companies are improving their testing assembly lines to acquaint themselves with recent technology. The increased competition and entry of new ATE companies can threaten the already existing ATE companies. In addition, companies prefer buying commercially available ATEs rather than building their technology tester, which will have significant ROI. This has been adversely restraining the overall revenue of the market.
Recent innovations in Virtual Reality (VR) applications are expected to be a significant opportunity for ATE companies. There is a growing penetration of smartphones, broadband, and other wireless devices. Companies need high-speed test solutions to ensure quality and offer the best products. They must ensure that the developed products are accurate, cost-effective, and reliable. Hence, intensive testing is undertaken before commercializing the products that reach the end user.
ATE companies can offer more powerful wireless test solutions with lower test times and costs. Automated testing is crucial for wireless technologies such as 5G, 4G, Wi-Fi, and LTE. The primary advantages of 5G technology include reduced latency, enhanced network speed, and expanded capacity. Moreover, avoiding network outages, protecting the network and customers' information, ensuring quality of service, and the rapid delivery of new services are at the forefront of operators' priorities. In addition, automating the testing framework substantially reduces human errors and help operators accelerate the pace of delivering differentiated customer experience across the various technology fabric in their network. Therefore, offers more significant opportunities for ATE manufacturing companies.
Study Period | 2019-2031 | CAGR | 6.1% |
Historical Period | 2019-2021 | Forecast Period | 2023-2031 |
Base Year | 2022 | Base Year Market Size | USD 9.44 Billion |
Forecast Year | 2031 | Forecast Year Market Size | USD 9.50 Billion |
Largest Market | Asia-Pacific | Fastest Growing Market | North America |
Based on region, the global automated test equipment (ATE) market is bifurcated into North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.
Asia-Pacific is the most significant global automated test equipment (ATE) market shareholder and is anticipated to exhibit a CAGR of 3.31% during the forecast period. The Asia-Pacific region is projected to account for the dominant market's revenue due to the presence of key market players. In this region, China and Taiwan will dominate the market share. The major market participants in this region have adopted future technologies such as faster mixed-signal testers, Adaptive testing, fine-pitch probe cards, advanced Design-For-Test (DFT), design standards, and others. In addition, the governments of developing nations, such as India and China, will encourage the establishment of fabrication facilities by providing incentives and tax breaks. These fabrication facilities are anticipated to enhance the manufacturing capabilities of semiconductor equipment, encompassing assembly, packaging, and automated test equipment. These factors are expected to accelerate the expansion of the automated test equipment market in the Asia-Pacific region.
Additionally, the market growth is propelled by the region's substantial market presence and the quick advancement of technology. Due to the increasing adoption of smart electronic devices and the popularity of loT ecosystems in households and businesses, countries such as China, Japan, South Korea, and Taiwan offer lucrative opportunities for manufacturers. In addition, the expansion and growth of the consumer electronics, automotive, and IT and telecommunications industries are expected to fuel the demand for automated test equipment (ATE), propelling the global automated test equipment (ATE) market in Asia-Pacific. The Asia-Pacific market is expected to be dominated by China due to the significant number of automated test equipment (ATE) manufacturers in the region.
North America is expected to show a moderate CAGR during the forecast period. Due to the expanding use of automated test equipment in the aerospace and defense industry, North America is anticipated to experience substantial revenue share growth over the forecast period. In addition, the use of ATE in consumer electronics, such as mobile devices, is flourishing and shortening release schedules. Across the region, organizations are augmenting their enterprise application suite's test coverage with the assistance of ATE in response to increasing cybersecurity threats and application complexity. The rising demand for low-priced consumer goods, coupled with a steady increase in the semiconductor industry's adoption, has been identified as the primary growth catalyst for the ATE market in North America, particularly the United States. Although ATEs are extremely expensive, they are a cost-effective long-term solution because they can test large samples with minimal human intervention.
Additionally, the presence of key actors and an increase in product launches contribute to the revenue expansion of the market in this region. The 5G NR Test UE operates as a 3GPP Release 15 compliant UE, such as a modem or mobile phone. Infrastructure providers, including macro cells, small cells, pico cells, femtocells, and semiconductor and service providers, can use the offering to test, validate, and evaluate performance in real-world environments.
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The global automated test equipment (ATE) market is segmented by type and vertical.
Based on type, the global market is segmented into logic testing, printed circuit board (PCB) testing, and interconnection and verification testing.
The logic testing segment owns the highest market share and is anticipated to grow significantly during the forecast period. The large share of the logic testing segment is attributed to the associated benefits of components used in linear or mixed signal equipment tests, including digital-to-analog converters (DACs), comparators, analog-to-digital converters (ADCs), and track-and-hold amplifiers. These components incorporate features such as high-speed transceivers, audio interfaces, and signal processing functions, helping to ensure the high quality of the device.
PCB testing, or testing of printed circuit boards, begins with the realization that the PCB is the foundation of any printed circuit assembly (PCA). The circuit board is of superior quality and should not cause your final product to incur expenses due to failures or recalls. NTS is an internationally accredited testing facility authorized to conduct PCB testing on the bare PCB, the basic materials from which the PCB is fabricated, and the finished PCA. IPC-6012, IPC-6013, MIL-PRF-55110, MIL-P-50884, IPC-6016, IPC-6018, and MIL-PRF-31032 are the most widely used PCB testing performance specifications for qualification, acceptability, and conformance.
Based on vertical, the global market is bifurcated into automotive, consumer, aerospace and defense, IT and telecommunications, and others.
The IT and telecommunications segment dominates the global market and is predicted to exhibit a CAGR of 3.4% over the forecast period. The IT and Telecommunications segment held the largest market share due to the benefits associated, such as rapid feedback on the mainframe and innovation acceleration without the risk of bottlenecks that disrupt operations, impede customer experiences, or influence the enterprise's revenues. ATE also helps enterprises overcome the shortage of skilled developers, improving mainframe quality, pace, and efficiency. In addition, the increasing use of semiconductors in the production of IT system components and telecommunications equipment will substantially contribute to the expansion of the automated test equipment market. The increase in complexity and performance level of the semiconductor devices used in electronic products and the improvement in semiconductor device technology are expected to fuel market growth.
In the last three decades, the aerospace and defense industry has seen a rise in the adoption of complex devices due to rising government expenditure in various regions. This has resulted in the rapid development of technology, with innovation enhancing the efficacy of existing tools and expanding their usefulness across a broad spectrum of functions. With increased revenue, the aerospace industry will invest heavily in automated test equipment. As per the U.S. Census Bureau, the manufacturing of aerospace products and materials generates a gradual increase in revenue from year to year. During a pandemic, there is a modest decrease in revenue, which is followed by a gradual increase. Potential malfunctions in electronic gadgets utilized within the aerospace and military domains possess the capacity to yield disastrous consequences of a catastrophic nature. As a result, electronics equipment production for the aviation and defense industries must undergo extensive testing with automation test equipment, which is expected to propel market growth over the forecast period.
The noble coronavirus drastically affected the automated test equipment market. The government declared lockdowns to curb the rapid spread of the virus, which resulted in the cessation of production, the closure of all work environments, the restriction of public interactions, and the temporary suspension of manufacturing and trading activities worldwide. The market's operations were disrupted due to the lockdown's implementation and public interaction.
During the initial two quarters of 2020, the entire supply chain experienced disruptions due to the closure of several manufacturing facilities and labor shortages within production units. During the early stages of the pandemic (the first and second quarters of 2020), supply/demand imbalance and movement restrictions negatively affected the market growth.
After recovering from the coronavirus outbreak, ATE firms increased their investments in cognitive capabilities, artificial intelligence, and robotic process automation. In addition, the companies developed effective crisis-management strategies, such as a focus on next-generation products and solutions and a strengthening of long-term contracts.