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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