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Study: Reflow Oven Sales on 3.8% Ramp Rate |
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Written by Mike Buetow
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Thursday, 17 August 2006 |
PALO ALTO, CA – Despite lower wages and price pressures from overseas competitors, the adoption of Pb-free solder paste has led a resurgence in reflow soldering equipment market sales in North America.
Industry revenues totaled $41.3 million in 2005 and are estimated to reach $68.1 million in 2012, a 3.8% average annual growth rate, Frost & Sullivan said today.
“In a mature market like reflow soldering, significant changes can
mostly be attributed to the occurrence of process changes,” said Frost
research analyst Deepa Mathew. “Complying with RoHS guideline has
created a pressing and immediate need for compatible equipment that can
withstand the new process parameters, thus boosting market growth.”
In order to comply, Frost said, assemblers upgraded their equipment by
investing in new ovens engineered to withstand higher temperatures and
have better control over the soldering process.
A significant factor challenging the market is increased competition
from low-cost nations particularly from China and Taiwan. Since the
shift of high volume surface mount technology (SMT) assembly to these
geographies, local manufacturers in these regions have introduced
reflow equipment. This equipment with lowered pricing is a hurdle even
to well-established vendors located in Europe and North America.
“China and Taiwan have emerged as the major hub of large volume SMT
assembly,” said Mathew. “Equipment suppliers face severe price
pressures from these overseas competitors and the average price of
reflow equipment has fallen dramatically over the past years, owing to
the threat from these low cost countries.”
Educating the customer about the cost of ownership of the equipment can
contain the threat of low pricing. Rather than considering the initial
investment price as the only criteria, customers should be aware of
other related costs as well. A nonfunctional machine can cost a
sizeable sum in operational and missed opportunity costs. Machine
maintenance along with power and nitrogen consumption are additional
costs for the assembler. |
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