Abstract
Manufacturers Face Increasing Competition, Excess Manufacturing Capacity,
and Sluggish Industry Growth
Manufacturers in the world surface mount technology (SMT) markets need to
find effective ways to deal with the intense competition and stagnant growth
rates. The reduced sales is largely the result of the increased electronic
assembly that is being done in the Pacific Rim that encourages more
manufacturers in this region to adopt the SMT process, thus lowering the market
share of companies outside this area. Since the feasibility of distribution
channels plays a large role in customer acceptance, local manufacturers are
better equipped to handle customer needs. Vendors that employ strategies that
proactively address the needs of the Pacific Rim are expected to successfully
overcome the regional competition and gain market share. Manufacturers are also
challenged by the effects of the economic downturn such as reductions in capital
investments and excessive inventories owned by end users.
This new research service from Frost & Sullivan examines the world SMT
soldering equipment, screen printer, and solder paste markets. It provides an
in-depth market analysis of various SMT soldering equipment and material
products and covers major market drivers and restraints. Apart from examining
the industry challenges, a set of strategic recommendations is provided for the
benefit of established manufacturers and new entrants. The research enables
manufacturers to understand the competition in each segment and to formulate a
marketing strategy that ensures consistent growth.
Vendors of Integrated Solutions Gain Greater Market Share
Focused research and development in the various SMT segments is resulting in
increasingly automated, reliable, and maintenance-free equipment that keeps
manufacturers ahead of the competition. Since most assemblers prefer to use a
single vendor as opposed to a distributed equipment-manufacturing line, vendors
that provide a complete solution are steadily gaining advantage over smaller
manufacturers.
The single vendor concept is quickly catching on also because of the superior
equipment compatibility and cost-effectiveness of this method. "It is
expected that the need for turnkey solutions will force manufacturers to either
sign strategic alliances to integrate systems or acquire a company that provides
complementary product lines," says the analyst.
Refurbished Equipment and Value-added Services Ensure Success
End users that aim to upgrade their system while ensuring maximum return from
their capital investment have set the trend of buying used SMT equipment.
"If an electronic assembly manufacturer wants to convert to the SMT process
and save on expenses, used soldering equipment provides a good
alternative," notes the analyst. Since the worldwide inventory of used
equipment is hindering the sales of new equipment, manufacturers will benefit by
focusing their marketing energies on the former segment.
Another lucrative market that has recently emerged is that of value-added
services such as consumables, spare parts, and user training. Manufacturers can
capitalize on these segments to improve profit margins and create a satisfied
clientele. Appointing service franchises at strategic locations to provide
customer support will improve sales and spur growth.
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