EFYREPORT

62 • Septem b er 2010 • electronics for you w w w . e f y m a g . c o m

Uma Bansal

With increase in indigenous production of telecom, automotive electronics, consumer electronics and lED products, the demand for smT machines—new and used—is expected to accelerate soon

smT EquipmentDemand Doubling Every Year

setups for automotive, lighting, LED and solar products are boosting the demand,” adds Prasad Gurjal, man-aging partner, Drive Technologies.

The demand is increas-ing two-fold every year, but it is still below the expected level. “The SMT equipment market has started moving forward, but it has not taken off as expected. The demand drivers like cellphones, STBs and other consumer electronics products are still dependant on China. There seems some revival though in the automotive sector,” says N. Chan-dramohan, country head (SMT division), Juki In-dia. “The ecosystem is the

main cause of the demand still not picking up. While there is a huge demand in consumption, com-ponents and associated industries are still lacking.”

Demand mostly from telecom and automotive sectorsAs mentioned earlier, telecom (2G and 3G telecom networks), automotive,

Demand for surface-mount technology (SMT) equip-ment is rising steadily in In-

dia. With the government’s thrust on electronics hardware manufacturing, the country is fast becom-ing a hub for original equipment manufac-turers (OEMs) and electronic manufacturing services (EMS) companies. Today, many of the global majors in EMS have foot-print in India. The growing manu-facturing of electronic products, in turn, is increasing the sales of SMT equipment.

In the manufacturing process, SMT equipment are used for such functions as placement, inspection, soldering, screen printing, glue dis-pensing and cleaning. These are clas-sified based on the required volume of manufacturing: low to medium, medium to large, and very large.

“The market is improving for us as various OEMs have taken keen interest in SMT equipment to have the in-house facility. And soon we will see big changes,” says M.K. Krishna-kumar, country manager, Essemtec India.

“The growth drivers are our own requirements in telecom, automotive, lighting and consumer electronics. As far as the growth of SMT machines is concerned, leading players like Flex-tronics, Solectron Centum, Jabil and Elcoteq have already contributed to

the SMT market in the high-volume segment. Indian EMS providers also contribute to the growth of the Indian market.”

Especially, “large-scale production

Autotronik BS683V pick-and-place machine from EMS Technologies

Large-scale production setups for automotive, lighting, LED and solar products are boosting the demand—Prasad Gurjal, managing partner, Drive Technologies

EFYREPORT

64 • Septem b er 2010 • electronics for you w w w . e f y m a g . c o m

consumer electronics (LCD TV sets and mobile phones) and lighting (CFL and LED) are some of the products for which SMT machines are widely used. Also, today, defence electronics products need high-end machines for assembly.

Telecom and automotive, the most prominent industries in India, will continue to contribute signifi-cantly to India’s GDP in the coming years. The mobile revolution and adoption of technologies such as WiMax and VoIP are necessitating indigenous manufacturing of various telecom products such as handsets, base stations, modems and VOIP phones, thus creating the demand for SMT equipment.

Automobiles are using an in-creasing percentage of electronic components and control units. And local manufacturing of automotive electronic products is further driving the demand for SMT equipment to improve production efficiency.

Technological trendsSMT equipment suppliers need to provide the most advanced equip-ment at competitive prices. They need to upgrade their products in sync with the evolution of the electronics manufacturing processes. Increasing use of miniature printed circuit boards

(PCBs) in various application segments is forcing them to develop and offer cost-effective and high-technology solutions to their OEM and EMS cus-tomers.

“SMT equipment vendors need to strike the right balance between technology and price in order to gain a competitive edge,” explains Bharath. “The best strategy in pricing lies in being cost-effective while ensuring provision of value-added services for customers.”

“Faster, more accurate and higher-density assembly with a great flex-ibility is what the market demands,”

Faster, more accurate and higher-density assembly with a great flexibility is what the market demands—N. Chandramohan, country head (SMT Division), Juki India

Complete SMT production lines from ESSEMTEC AG, Switzerland

EFYREPORT

electronics for you • September 2010 • 65w w w . e f y m a g . c o m

informs Chandramohan.“Trend is towards more and

more fine pitch and chip capac-ity. Also, the speed expectations of the customers are rising steadily,” says Gurjal.

“SMT machines are designed for low noise level, and the smoke coming out of the reflow oven is against the eco-system. But in new machines, this is controlled using filters,” adds Krishna-kumar.

“In SMT printers, in-line machines are being preferred to standalone printers. In pick-and-place, all-purpose mounters (multi-function mounters) and speeds as usual are the deciding criteria. Of course, high-end EMS companies look for very high-speed chip shooters. In conveyorised reflow ovens, demand is for seven- to ten-zone depending on the volume of manufacturing,” informs L. Sampath, CEO, 3EMST Marketing.

There are ample indicators for

strong growth in the SMT placement, screen printers, soldering and inspec-tion equipment product markets.

“Equipment that are in demand include component placement systems, auto insertion machines, printers, ovens, wave-soldering machines and AOI. Barring entry-level ovens and wave-soldering machines, all equip-ment are imported,” says Suresh Nair, director-sales & marketing, Leaptech

Corporation.Specifically, pick-and-place

machines are in large de-mand today. “These equipment are imported from Switzerland, Japan

and USA as we do not have indigenous technology

today to manufacture them,” says Krishnakumar.

“The same is the case for high-end Stecil printers. However, reflow ma-chines made in India are sold in good quantities,” adds Gurjal.

Why do we depend on imports?“There is no major equipment manu-facturing happening in India. The equipment are high-technology, and except for some peripheral equip-ment, all the machines continue to be imported,” informs Chandramohan.

“We manufacture SMT machines for low to mid volume only, but when it comes to precision and ac-curacy we are dependent on imports. We, the SMT equipment manufactur-ers, give the patented technology or cross-licence the high-tech manufac-turing equipment. As a buyer, we could have good price advantages clubbed with best services,” says Krishnakumar.

RF300 three-zone conveyorised reflow oven from Juki

In SMT printers, in-line machines are being preferred to standalone printers—L. Sampath, CEO, 3EMST Marketing

EFYREPORT

66 • Septem b er 2010 • electronics for you w w w . e f y m a g . c o m

“SMT equipment are not manu-factured locally because the domestic volume does not justify it. Once the volume of equipment for domestic consumption comes to a reasonable level, surely the local manufacturing would start. Until then, we need to de-pend on imports only,” reasons Nair.

some suggestionsChandramohan suggests the govern-ment to impose anti-dumping duties on finished products like mobile phones, set-top boxes and LCD TVs in order to ensure their local manu-facture, which would boost the sale of SMT equipment.

“There are various challenges that suppliers face today. For instance, components are becoming smaller and smaller, making the design compli-cated. The products turn obsolete in a short time. Low margins on contract sales make people go for second-hand machines,” says Krishnakumar.

“Quick changes in technology and therefore a fear of return on heavy investments, and longer lead time of components are affecting everything including machine and product de-livery,” says Rajendra Singh, general manager, American Tec.

SMT machines, which could cost $50,000 to $300,000, are too big an investment for a company in its initial stages while the ROI is uncertain. That’s the reason why many EMS companies are starting to buy second-hand (used) SMT equipment. Used

equipment account for 30 to 40 per cent of the overall SMT equipment sales. Generally, used equipment are available for half the cost of new equipment.

Where to lookJuki claims to be one of the top manu-facturers of pick-and-place equipment in the world with over 23,000 machines installed worldwide.

Essemtec is a worldwide leader in manufacturing of highly flexible SMT production equipment.

American Tec offers Fuji pick-n-place, KIC profiler, Nutek PCB han-dling, Minami paste printer, Getech PCB router and VIT AOI equipment.

Leaptech offers such equipment as chip shooters, multi mounters, glue dispensers, hybrid inspection systems, automatic screen printers and solar cell printing and drying lines, assembly au-tomation systems and wave-soldering equipment.

3EMST caters to different volumes, from entry-level to high-end lines. For printing, it has both fully automatic in-line and off-line equipment. In pick-and-place, its machines range from 3600 cph to 25,000 cph.

Drive Technologies’ three- and

five-zone SMT reflow ovens are indig-enously manufactured in India. The company claims to have the longest duration of seven years in the Indian market with more than 300 installed machines.

PROSEM Technology India is the exclusive representative of As-sembleon (formerly Philips EMT) range of SMT equipment in India. As-sembleon, still a fully owned Philips company, is one of the market lead-ers in the SMT placement equipment industry.

market forecastsA report by Frost & Sullivan, titled Indian Surface Mount Technologies Market, says that the SMT equipment market earned revenues of $54.1 mil-lion in 2008 and estimates this to reach

$88.8 million in 2012, growing at a CAGR of 13.2 per cent.

“Our electronics manufacturing is 7-10 per cent of Chinese manufactur-ing and we can expect it to double next year,” says Rajendra.

“Availability of cost-effective and skilled labour is positioning India as a preferred destination for EMS and OEM companies,” explains Frost & Sullivan research analyst Bharath K. “With an increase in the perks awarded to foreign direct invest-ments (FDI) by the government of India, many of the global companies are anticipated to set up their manu-facturing facilities in the country, thereby augmenting the demand for SMT equipment.”

“From a few number of SMT lines sold a few years ago, now the num-bers are in a few dozens. Soon we can expect a few hundreds of setups being sold in India,” adds Gurjal.

The author is a deputy editor at EFY

The smoke coming out of the reflow oven is against the ecosystem. But in new machines, this is controlled using filters—M.K. Krishnakumar, country manager, Essemtec India

Quick changes in technology and therefore a fear of return on heavy investments, and longer lead time of components are affecting everything including machine and product delivery—Rajendra Singh, general manager, American Tec.

Barring entry-level ovens and wave-soldering machines, all equipment are imported—Suresh Nair, director-sales & marketing, Leaptech Corporation