5G, IoT and Other Innovative Technologies Stimulate Growth for Electronic Test Equipment

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Pricey electronic test and measurement (T&M) equipment used in research and development (R&D) applications hold nearly 50 percent of the total market revenues, deriving from instruments priced at more than $50,000. The rapid evolution towards higher frequencies and wider modulation bandwidth, coupled with the advent of technologies such as 5G, is creating growth opportunities for advanced test equipment. However, providing electronic engineers with superior equipment at competitive prices will challenge T&M vendors from a technical as well as a business standpoint.

“Technologies such as 5G and higher frequencies required in aerospace and defense and automotive radars will translate into a drastic shift in the signal generators, signal analyzers, network analyzers and power meters segments of the electronic test equipment market,” said Frost & Sullivan Test and Measurement Industry Director Jessy Cavazos. “Currently, the majority of the revenues for these segments come from frequencies below 6 gigahertz (GHz). In future, a much higher percentage of revenues will come from frequencies over 26.5 GHz.”

Principal opportunities will emerge from the radio frequency (RF), microwave (MW) and high-speed digital test segments. More signal generators will be needed than function generators and signal analyzers will see higher demand than spectrum analyzers due to their vector capability. In power meters, complex signals will drive peak power meter adoption over average power meters.

Further, the greater than 60 megahertz bandwidth segment will account for significant revenues as new technologies require over 1 GHz of modulation bandwidth. The lack of disruptive technology in the largest segment of oscilloscopes will, however, prove a restraint by making the segment vulnerable to macro-economic trends and customer business cycles over the next 3-5 years.

Despite budget constraints, end users have no choice but to upgrade their test equipment in the face of such rapid technological evolution. Test vendor success will be determined by the ability to provide high performance at competitive prices while addressing the demand for greater ease-of-use with such complex instruments.

“Growth in the market will also be tempered by customer preference for software upgrades, renting and leasing of equipment, and the emergence of new business models,” added Cavazos. “Design engineers also strive to perform as much as possible in the virtual domain before moving onto prototyping and testing. While this increases the need for better integration between simulation tools and T&M instruments, it affects overall demand.”

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