The global automated test equipment market was valued at USD 7,125 million in 2021. It is expected to expand at a CAGR of 3% to reach USD 9,297 million during the forecast period (2022–2030). Automatic test equipment (ATE) is computerized machinery that carries out and analyzes the results of features, effectiveness, reliability, and stress tests performed on electronic systems and devices. ATE automates traditionally manual electronic test equipment and processes with minimal human intervention. It tests various electronic devices to ensure their performance, functionality, and the safety of those who will use them or directly and indirectly benefit from their use.
A significant factor driving market expansion is the rising need of businesses to reduce expenses to eliminate consequential damages and improve customer satisfaction. ATE is employed to determine flaws in Devices Under Test (DUT) and aids in ensuring device quality. The market demand is also driven by a significant increase in the number of consumer electronics and an increasing emphasis on quality improvement by companies.
Further, the effective use of test equipment in the semiconductor and automotive industries is the primary driver of the ATE market's growth. Implementation of ATE with multiple features, such as enhanced performance capability and speed, can reduce the cost of the semiconductor device. In addition, technological advancements, design complexity, and the need for effective testing are also driving the growth of the ATE market.
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Taking revenue into consideration, the consumer electronics industry increased sharply. The rise in smartphone sales is the driving force behind the expansion of the consumer electronics sector. In the coming years, technological advances and the introduction of 5G technology are anticipated to fuel the demand for smartphones. In the fourth quarter of 2020, smartphone manufacturers shipped approximately 394 million units worldwide, while in the first quarter of 2021, they shipped 354 million units. In the first quarter of 2021, global shipments increased by 20% year-over-year to 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 demand in the ATE market. Almost every two years, the average mobile phone user upgrades their device to take advantage of new features. However, as device capabilities have increased and their size has shrunk, issues like shorter battery life have become more common. Hence, it is envisioned that the consumer electronics industry's implementation of test solutions and testing methods will continue to evolve.
There has been a prominent increment in the global prevalence of smartphones and connected devices. By the end of 2025, it is anticipated that nearly 80 % will own mobile devices. To stay competitive in the market, companies are placing a greater emphasis on customer service and satisfaction, which are crucial factors for success. Before packaging and selling the final product to the end-user, companies put forth efforts for end-to-end device testing. In addition, a company that manufactures a single device has a fragmented ecosystem comprised of multiple OEMs with varying architecture and operational standards. This increases the complexity of testing and the number of crucial testing tools required.
The proliferation of smartphones has also contributed to the increased demand for semiconductors, which has increased the demand for ATE. In the initial performance evaluation phase, smartphones undergo battery testing to address heating and stability concerns. Importance has been placed on testing battery life during the design phase so that any issues related to battery life can be resolved before production. In addition, testing challenges continue to increase due to technological advancements and the development of techniques such as carrier aggregation for LTE, Bluetooth, GNSS receivers, and wireless LAN. These factors are significant growth drivers for the ATE market.
Many ATE manufacturers have been involved in mergers and acquisitions over the past few years. Advantest Corporation and Teradyne Inc. account for the majority of the current market. Numerous smaller businesses have established themselves in the marketplace. Intel Corporation and National Instruments' entry into the testing market (restricted to semiconductor testing) changed the market ecosystem.
Numerous businesses are concentrating on modernizing their testing assembly lines to keep up with technological advancements. Increased competition and the entry of new ATE companies can pose a threat to the already existing ATE companies. As the return on investment for commercially available ATEs is substantial, businesses prefer to purchase them rather than build their own.
In recent years, autonomous vehicles have grown in popularity. Recent innovations in autonomous vehicles, such as Deep Reinforcement Learning (DRL) and Simultaneous localization and mapping (SLAM), have substantially influenced the ATE market. Autonomous vehicles are a recent innovation, and rapid advancements in this field have resulted in frequent testing of such vehicles by established manufacturers.
Before commercialization, autonomous vehicles must undergo extensive testing due to the many electronic sensors and circuitry they contain. In autonomous cars, the failure rate must be kept to a minimum, as failure can result in fatal consequences for both the end-user and the company's reputation. Testing becomes an integral part of the launch, which is anticipated to create lucrative opportunities for the ATE market.
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.
Based on type, the automated test equipment market share is categorized as Logic Testing, Printed Circuit Board (PCB) Testing, and Interconnection and Verification Testing.
Logic testing is anticipated to be valued at USD 5,089 million at a CAGR of 3% by 2030. The substantial share of this is attributed to the associated advantages of components used in Linear or mixed-signal equipment tests, such as digital-to-analog converters (DACs), comparators, and analog-to-digital converters (ADCs), and track-and-hold amplifiers. These components, which include high-speed transceivers, audio interfaces, and signal processing capabilities, contribute to the high quality of the device.
PCB testing is expected to have a revenue of USD 3,396 million at a CAGR of 4% by 2030. The growth of printed circuit boards in the automotive industry is accelerating, with an increasing focus on electric and autonomous vehicles. PCBs hold together all the components and sophisticated sensors required for the flawless operation of an automobile. Before releasing automotive PCBs to the market, they must pass stringent thermal shock, thermal cycling, and humidity temperature tests. In addition, the dielectric of the PCBs should be resistant to Conductive Anodic Filament (CAF) faults. The CAF can result in a short circuit between the conductive traces and the Copper Clad Laminate (CCL).
Based on verticals, the segmentation is done as Automotive, Consumer, Aerospace and Defence, IT and Telecom, and Others.
The IT and Telecom segment is projected to reach USD 4,908 million at a CAGR of 4% by 2030 due to the benefits associated, such as quick feedback on the mainframe and supercharging innovation without the risk of bottlenecks disrupting operations, impeding customer experiences, or affecting enterprise revenues. In addition, ATE assists businesses in enhancing quality, velocity, and efficiency on the mainframe while alleviating the shortage of experienced developers.
The Consumer segment is anticipated to account for USD 2,704 million, with a CAGR of 4% by 2030. The increasing use of System on Chip (SoC) and high demand for consumer electronics are anticipated to be the primary growth drivers of the ATE market during the forecast period. The market is expected to be driven by the increasing use of electronic components in the automobile industry and the proliferation of smartphones. Miniaturization has expanded the application of ATE.
In addition, substantial technological advancements, design complexity, and the need for effective testing are anticipated to drive the market. Advances in semiconductor manufacturing processes and the expansion of wireless networks in developing nations will significantly propel the automatic test equipment market over the next few years. Moreover, substantial technological advancements, design complexity, and the need for effective testing are anticipated to contribute to market expansion.
The demand for automated test equipment is primarily driven by the surging production, complexity, and performance level of semiconductor devices employed in electronic products and the emergence of advances in semiconductor device technology. Increasing pricing pressure among semiconductor manufacturers has also compelled suppliers to maximize the utilization of capital equipment across multiple devices. The demand for the product is anticipated to be driven by increasing semiconductor assembly and manufacturing applications.
The region-based segmentation is done as North America, Europe, Asia-Pacific, South America, and the Middle East and Africa.
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Asia-Pacific is expected to be the largest market for automated test equipment and command a value of USD 7,657 million at a CAGR of 4% by 2030. The significant presence of semiconductor industries in the Asia-Pacific region will be the primary factor responsible for the region's dominance over the forecast period.
Further, an increase in government initiatives undertaken by China, Indonesia, Singapore, Thailand, Malaysia, and Taiwan to develop advanced manufacturing processes will also contribute to growth. It is anticipated that China and Taiwan will hold the most prominent regional revenue share. The market dynamics are significantly transformed by future technologies such as adaptive testing, advanced Design-For-Test (DFT), fine-pitch probe cards, and design standards. These technologies are expected to play a pivotal role in regional development.
North America is expected to be the second-largest market, accounting for USD 1,639 million at a CAGR of 3% by 2030. It is anticipated that North America will see significant gains due to the growing employment of automated test equipment in the field of aerospace and defense. The existing companies in this region are placing more emphasis on forming partnerships and collaborations and expanding into new geographic areas.