Dynamic Verticals to Trigger Market Revivals

May 18, 2003 12:00 PM, Edited by PETech Staff

Sluggish demand, increased competition, and mounting price pressure in the dc power supplies and electronic loads market is posing a strong challenge to vendors.

This market witnessed a sharp drop in production in 2001 and 2002, following the slowdown in the semiconductor and telecommunications industries that affected important applications such as component and wireless testing.

New analysis from Frost & Sullivan World DC Power Supplies and Electronic Loads Market reveals that revenues in this industry totaled $289.5 million in 2002 and are projected to reach $377.2 million by 2009.

"The market is not expected to regain momentum before 2004. Future drivers include adoption of new wireless applications and recovery of capital spending," said Frost & Sullivan Industry Analyst Farah Saeed.

Price is a major competitive factor, particularly in the low-end market comprising power supplies and electronic loads below 300W targeted at bench top applications. Limited product differentiation and innovation compels end users to make purchasing decisions based on price alone, creating significant price pressure.

New market entrants from East Asia have compounded this problem because low manufacturing and labor costs enable them to sell products below market price. Companies depending on the low-end market for sales must offer competitive prices to survive.

However, growing competition in the electronics world and the adoption of more electronics into applications are likely to underline the need for increased product quality assurance.

Dynamic vertical markets are expected to impact demand for dc test equipment in the long run. For instance, the semiconductor market holds much potential, since computer chips constantly require more memory and faster processing for next-generation electronics.

Promising applications such as wireless fidelity (Wi-Fi) and third-generation (3G) technology, as well as the development and introduction of 42V and hybrid vehicles, are also expected to trigger new purchases and rapid replacements of existing equipment.

"Companies that remain abreast of the latest developments in application markets will achieve a head start once the economy recovers," said Saeed.

For more information, visit www.PowerSupplies.frost.com.