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Industry Analysis: Test & Measurement Industry

Over the years, test and measurement (T&M) equipment has grown in significance, reflecting the critical role it plays in any industry, right from R&D to production & services. Despite this, the T&M industry has somehow remained out of the spotlight in India. However, the growing emphasis on the quality of products & services delivered, as well as the need for accuracy & timely results, is driving the growth of the market in India. The increasing R&D activity across various industries is also expected to further augment the growth of the Indian T&M market, which has shown an average annual growth rate of 2% YoY. Experts estimate that this market has the potential to touch US$ 1 billion in the next 3-4 years.

Introduction

Let us start with a typical test scenario that involves measuring some characteristics of the device or material. This can range from a very simple setup, like using a benchtop digital millimeters (DMM) to measure resistance values, to the more complex systems that involve featuring, special cabling etc. When determining the required performance of the system, which is, the required measurement accuracies, tolerances, speed, etc., one must include not only the performance of the measurement instrument but also the limitations imposed by and the results of the cabling, connectors, test fixture, and even the environment under which tests will be carried. When consider a specific measurement instrument for an application, the specification or data sheet is the first place to look for info on  performance and how that will limit the results. However, data sheets are not always easy to understand because they typically use specialized terminology. Also, one cannot always determine if a piece of test equipment will meet the requirements of the application simply by looking at its specifications. Like eg, the characteristics of the material or device under test may have the significant impact on the measurement quality. The cabling, switching hardware, and the test fixture, if required, can also affect the test results. Sometime perceived as a necessary evil, the T&M industry plays a critical role in the delivery of products and service qualities to one’s customers. Virtually every industry, including aerospace and defense, telecommunications, automotive, energy, medical, consumer electronics, semiconductors and many more, uses T&M equipments for designing, manufacturing, deploying and ensuring the highest level of satisfaction of customers with products and services.

T&M industry key issues

Increasing complexity of the devices to be designed produced and deployed by manufacturing CoS demands an unprecedented level of the knowledge from the users of test equipments. Increasing industry maturity in developed regions demands a change in customer reach strategies for the market participants. The economic downturn of 2016-2017 is still impacting the test strategies of customers, forcing CoS to look beyond the selling capital equipment and consider alternative ways of acquiring test equipment. While market research analysts predict that the Global T&M markets to grow at a moderate CAGR of >5%. Rapid growth of the other sectors is one of the key factors driving the growth of the T&M markets globally. The increasing adoption of T&M solutions by end-users is expected to propel the growth prospects of this market in the upcoming years. The electronic test equipment ensures that the high standards required in the various industries such as energy, infrastructure, aerospace, automotive, healthcare, telecom etc. are efficiently met.
The market should be growing at a much faster pace but still nothing significant is happening because of the fluid economic condition, and as a result of that the industry is still reluctant to make any major capital investment. The major competition in electrical T&M instrument industry is from Chinese CoS only, as there is not much of competition in this field from within India. The main reason behind that is the Chinese govt subsidizes the export of electrical T&M instrument very heavily. Thus, it is not a level playing field for Indian manufacturers. The only way to counter this unfair practice adopted by the Chinese is that the GoI should levy higher custom duty on these equipment when imported from China, failing doing that this industry in India will never develop. The main transformation in this segment is that earlier on, largely these equipment were imported from US/Europe and now these are being imported mainly from China. Industry leaders for some reasons are willing to accept Chinese products, but not those made in India, though the quality of products coming from China is not good. They are accepting the same as these are really cheap (not less expensive). It is not a good phenomenon since quality suffers. However in the power sector, customers are aware about Chinese goods and avoid purchasing them as far as possible. Having said that, some of the Chinese T&M instruments that are available are also of good quality, but one needs to be careful in buying only from genuine suppliers. 

Trends in Test & Measurement

Increased Use of Multicore/Parallel Test Systems: To continue realizing performance gains without increased clock rates, processor manufacturers are developing processors with multiple cores on a single chip. With multicore processors, test engineers can develop automated test applications capable of achieving the highest possible throughput through parallel processing. The inherent parallelism of graphical dataflow software like NI LabVIEW helps engineers immediately benefit from multicore processors and overcome the complexity associated with traditional text-based languages. 
Growth of Software-Defined Instrumentation: Increasingly, the functionality of complex devices is being defined by the software embedded in them. This is challenging for many test engineers because most stand-alone instruments cannot change their functionality as fast as changes in the DUT due to the fixed user interface & firmware that must be developed & embedded in the instrument. Thus, test engineers are turning to a software-defined approach to instrumentation, so they can quickly customize their equipment to meet specific application needs and integrate testing directly into the design process.
Growing Popularity of FPGA-Enabled Instrumentation: With the increase in system-level tools for FPGAs that is field-programmable gate arrays, more manufacturers are including FPGAs on modular instruments and giving engineers the access in software to reprogram them according to their requirements. For eg, test engineers can embed a custom algorithm into the device to perform in-line processing inside the FPGA or emulate part of the system that requires a real-time response. New system-level tools are emerging so engineers can rapidly configure FPGAs without writing low-level VHDL code.
The Explosion of Wireless Standards: Test engineers are facing new challenges as use of RF & wireless applications is expanding. RF & wireless traditionally have been very specialized fields, but the industry is seeing wireless capabilities integrated into more & more products. Soon, RF instrumentation could become as ubiquitous as general purpose instruments such as DMMs. This growth in adoption requires test engineers to learn wireless protocols & keep pace with the rapid introduction of new standards.
Emulation-Based ATE for System-on-a-Chip (SoC), System-in-a-Package (SiP) Testing: Complex SoCs and SiPs require a system-level functional test more closely related to testing components placed on a PCB than a typical vector-based chip test, but they still require the high speeds demanded in production test for the semiconductor industry. The strategy of testing a device by emulating actual real-world signals provides a better method of functional test for these types of high-speed systems. This emulation-based ATE combines FPGA-based hardware to offer real-time responses and real-world interfacing with the standard pin electronics found in traditional ATE.
By taking advantage of these trends, it is believed that CoS can gain a market advantage in reducing their costs, improving product quality, and decreasing time to market. The development of new instrumentation technologies is driven by the needs of the users (the measurements and analyses required to support new technologies and applications). Among today’s needs are measurement speed, broadband signal measurements, modulation and demodulation capabilities within instruments, and greater integration with computer simulation & analysis. There are also increasing needs for high performance portable instruments, flexible & fast production test systems and a continuing push for the highest performance in lab instruments. The single biggest recent advance in test equipment is the inclusion of digitization of signals and computer analysis capabilities. Many instruments now have internal PC platforms that operate the instrument & perform the calculations necessary to process the measurement data (FFT, modulation/ demodulation, BER analysis, etc.) and deliver detailed displays and reports to the user. Production testing is a significant challenge, with today’s complex modulation types, spectral mask-defined emissions limits, and ever-higher frequencies of operation. Current production test systems must have performance approaching that of high-end laboratory instruments. With evolving standards and deployment of new systems, the flexibility of production testing has also become an imp issue, with the goal of reducing the cost to reconfigure test systems for new products. High performance portable instruments is a growing area of interest. The construction and commissioning of new wireless, industrial, automotive and medical systems can be considered an extension of the manufacturing process, including testing. Once they are operating, maintenance of these systems must use instruments that are capable of verifying that performance is fully compliant with the operating specifications. Finally, the nature of the signals themselves drives the requirements of test instruments. Complex digital modulation (such as OFDM), and wide occupied bandwidths are just two factors that have only recently become commonplace.
Electronics measurement business in India
With huge investment outlined in the power sector will lead to a big growth in the T&M market in India. The T&M industry in India has performed very well in the last few years. As electronics technologies evolve, CoS are staying one step ahead with its mantra of Anticipate- Accelerate- Achieve: anticipating customer's T&M needs, accelerating their tests or time-to-market with reliable products, and helping them achieve their goals. India's T&M industry has seen good growth in last few years with the increasing investments in design, R&D and manufacturing for all major electronics markets including telecom, aerospace, defense, automotive, consumer electronics, contract-manufacturing, semiconductors, etc. Markets in last few years have been cautious due to the prevailing economic climate but it is being seen as a temporary phase especially with large nascent markets like India. Fundamentals around investments by private players in the country are still very strong, and some of the govt policies like the National Policy for Electronics & National Manufacturing Policy would be a further shot in the arm for the electronics and test equipment market growth in the country for the next many years to come.

Oscilloscope market in India: Oscilloscopes are the fundamental test & debug tools in all spheres of product development & manufacturing. They have evolved from the traditional analog scopes to high performance digital oscilloscopes. Today’s oscilloscopes have extremely high speed ADCs & loads of memory. They have unprecedented analysis capabilities & more & more automated compliance software. Modern day oscilloscopes also have very high fidelity high bandwidth modular probing systems. Most of research in oscilloscope is focused on solving customers' debugging issues and enabling their forays into new technologies of the future. CoS endeavour is to provide a good user-experience, in addition to being a 'tech-enabler' for scientists and engineers around the world.
T&M is no longer an “equipment-driven” activity but nowadays involves use of computer software and Internet  based applications:  This depends on application and usage of T&M equipment. However, the use of software and computers will be done only after the data is collected in real-time. And for that, equipment is required. So it doesn’t eliminate overall requirements of measuring equipment, in applications such as ATS (automatic test setup) that is a combination of hardcore equipment, software, and Internet-based application for using data in remote control and analysis. So sometimes, certain equipments are merged in common test set-ups and no longer exist as individual equipment. Aplab’s RF test setup is one such example.

Power Sector: the booming market: Power is an essential req and a basic human need. The growth of an economy depends on the power consumption and its availability. Even the govt authorities understand this, which is the reason they are investing more in the power sector. The sector is expected to create more job opportunities in in upcoming years. The future for the Indian T&M equipment industry is certainly very bright. This optimism essentially comes from the country's power sector ambitions. India is set to add around 15,000 mw of new power generation capacity per year, over the next 5-7 years. New power generating stations and supporting evacuation infra will positively influence prospects of the T&M equipment industry. It is also pertinent to note that Indian power transmission sector is moving to the EHV and UHV AC class, which will generate demand for even more sophisticated equipment. Also when we talk about UHV levels, safety is a primary concern. Technicians/engineers working on such platforms require instruments which can not only provide reliable, repeatable and fast results but also it should be safe and easy to operate. 
The Smart Grid Culture: The smart grid is revamping the electricity delivery network from electrical generation through the end-use customer with improved costing, efficiency, reliability and security. Smart grids leverage the latest in digital & IT such as microprocessors, communications, advanced computing, and information technologies that provide advanced II-way communications between utility provider & energy consumer. These changes are resulting in a multitude of new smart grid devices with more advanced electronic designs that must seamlessly integrate into the grid. These more advanced designs require new modernized manufacturing test strategies in order to meet the cost, quality, delivery and reliability expectations of smart grid stakeholders. Smart-grid implementations include generation stations; step-down and step-up substations; and various residential, commercial and industrial customers. Smart meters must be tested before they are deployed. To this CoS are enabling manufacturers to perform comprehensive in-circuit test (ICT), functional circuit test (FCT) and combination test (ICT + FCT in a single test) at the assembled PCBA level, with the goal of assuring product quality and greatly reducing costs. While on the other hand with shortage of other energy resources and looking at costs and hazards with nuclear power generation, solar energy is becoming a challenge for Indian engineers. Besides this, India is in a tropical zone where ample sunlight is available throughout the year except for intermittent rain. The explosive growth in the solar industry has intensified the need for solar cell, solar module and MPPT/inverter T&M solutions. The challenge is to differentiate the solar product. Competitive differentiators are efficiency, yield and reliability. Today several CoS are powering the solar revolution with industry leading power supplies, electronic loads, parametric analyzer, source measure units (SMU), DMMs and data acquisition systems, a broad range of solutions for R&D and manufacturing engineers developing solar products.
Outlook on India's T&M Market: The measurement market will grow in the coming years. Industries belonging to the aerospace & defense, automotive, general electronics manufacturing, security, telecom, pharma, life sciences and services sectors have been the primary drivers of this growth. There is an increasing spend in all these sectors in India. As a result, measurement products that are suitable for these markets are being conceived, innovated and developed in India. Measurement market in the electronics and the bio-analytical areas that serve the above mentioned segments has experienced a very robust growth in India. In order to tap this growing market, CoS are continuously innovating and launching new products and solutions which can fit into R&D bench or onto manufacturing belt.
Quality of Indian T&M equipment is slow but surely improving: For the T&M equipment industry to grow, India needs to have a sharper focus on R&D activities. Some CoS in India don't give much importance to R&D as well as maintenance and re-calibration of the T&M equipment. This has resulted in lower demand. Probably if CoS give more focus on R&D and on regular maintenance of their plants, the demand will increase. We are heavily reliant on foreign CoS although there are CoS who have started making T&M equipment locally. Although they are quite successful, their quality is still couple of notches below the foreign products. But as the world is becoming globalized and the quality of Indian products is slowly but surely improving. Also it is to be noted that the new generation is more tuned to the IT sector and there is a shortage of good engineers in R&D sector. There is overall shortage of trained manpower in T&M industry be it in power or telecom, or in any associated domain. Young engineering graduates prefer to work with the software industry where salaries and perks are higher and work environment is “cushy & comfy” as compared to manufacturing industry. So far we do not see any encouraging change in this sector. The test and measurement software arena does see some engineering students interested to learn on a fast track.

India Needs A Focused Manufacturing Policy

T&M industry, which undoubtedly has an exciting future but also serious challenges en route. India can gradually move up the value chain only through a concerted attempt from stakeholders. It is true that investment in power sector is growing due to rising needs of growing population and on account of extensive developments in rural India. These remain the govt.s’ prime focus. It is felt that testing tools for these sectors will result into higher demand and one will see more investment in this type of infrastructure. And it is absolutely true that we are still dependent on imports. There are many reasons for this. The basic semiconductor industry is not wholly present in India. This is creating major weakness as this remains the basic infrastructure for the electronics industry. We have to depend fully on imports. Sometimes this becomes a major hurdle in the development of sophisticated products. “For East is east, and West is west, and never the twain shall meet” remains a call to action. India can gradually move up the value chain only if there is a concerted attempt from multiple stakeholders to create active change. We feel that India in general has lost focus on overall manufacturing sector. The govt does not have a clear focused policy to encourage manufacturing industry. They have taken careful steps to boost the software industry but remain entrenched in a time warp when it comes to the manufacturing industry. Trouble intensified when cheaper Chinese products flooded the market. This is the case around the world, in different sectors. This is one of the reasons very few players could make globally competitive products. Well, definitely competition from China is significant. The industry loses business merely based on price. However, we get the customers back after they realize the importance of buying the product from Indian manufacturers. But the process is long, intractable and you should be capable of suffering such losses. This can sometimes weaken the morale-especially of marketing personnel on the field who interact with clients and customers on a daily basis. PMA policy will lead to increased demand for T&M equipment and  “Make in India” campaign is expected to boost the nation's manufacturing industry.
Scope of T&M instruments in the electronics industry: T&M instruments generally fall into 3 categories: (1) General test and measurement equipment like signal generator analysers, multimeters, automated testers, clamp meters, etc. (2) Semiconductor related test equipment like digital testers, analogue RF testers, etc. and (3) Communication test equipment like wireless and optical testers. While growth of the T&M instruments market in India is driven by several factors, it is pertinent to mention that one of the key drivers is the increasing domestic thrust on R&D, across sectors. T&M devices find widespread usage in the research and development space.
Market size and growth opportunities in the T&M industry: The general-purpose test equipment market in India was estimated to be around US$ 200 million in 2016 and is growing at a CAGR of 12-13%, while the size of the wireless communications test devices market in India is currently US$ 40 million with a CAGR of 25%. Electronic devices form a pivotal part of most commercial and industrial establishments. Telecom, aerospace otherwise aeronautical, automotive and power are the sectors where T&M instruments have widespread applications. In the Indian context, it is in these sectors that T&M plays the most crucial role, and where growth opportunities are extremely good. The fate of the T&M industry is highly dependent on how the electronics industry fares. As per reports, by 2022, India will emerge as a US$ 400 bn market for electronics, with domestic manufacturing of electronic products worth US$ 174 billion! There is indeed a huge potential for electronics in India in the near future and, therefore, the growth opportunities for TMI are immense.
Major demand-generating applications in the T&M industry: In the Indian market, as per my reckoning, the earlier-mentioned verticals provide the highest potential for growth. The communications industry accounted for the largest share of 56.90% in the T&M equipment market in India. The growth of wireless tech will lead to an increased requirement for relevant testing equipment & devices. The aerospace & defence industries are the 2nd largest end-user segments for T&M equipment domestically, accounting for a 18.93% share and this is expected to increase to more than 20%, with a CAGR of around 15%. The consumer electronics segment is another major demand-generating vertical for T&M products in the country. Apart from these specific industries, the other application space with potential is the utility sector comprising power generation, transmission and distribution.
The latest trend in T&M industry: The telecom sector is projected to witness exponential growth with 3G and 4G network expansion proceeding at an unparalleled speed across India. This will be the driving force for the expansion of T&M in the country. The automotive industry will also contribute a significant portion of growth for T&M products. Besides, the conventional manufacturing sector will witness increased growth in demand for these products, for testing and maintenance. Another undeniably crucial segment in India is aerospace. Growth in air traffic, the increasing number of passengers, and the expansion of existing infrastructure are all major factors catalysing the T&M industry’s growth. While India has not seen major capacity addition in recent times with respect to power generation, the transmission and distribution sector is undergoing aggressive expansion and refurbishment. This is another sector where T&M  products are required. India is being seen as the emerging solar hub of the world, with cumulative capacity of nearly 100GW to be installed in the next few years. Solar power is also a very important market for T&M products. The education sector is another relevant segment for T&M. India has tens of thousands of students joining colleges every year for technical education. As part of the curriculum, they learn about electronics, electrical concepts and allied products, for which, they need to be exposed to measurement devices. This underscores the opportunities for the growth of T&M instruments within this vertical. Overall, the T&M business volumes are projected to grow at an average annual rate of 25% in India as per some published reports.

Future of the T&M industry in India

Evidently, there is huge potential in India for T&M products. Customers expect the products to be more user-friendly and with the most compatible technology. Within the overall instrumentation and metering vertical, T&M is growing the fastest. The progress in the energy, telecom, automation, electronics and education sectors, along with increasing defence requirements, has influenced the boom in the T&M market. Internet penetration and wireless communication have witnessed significant growth in the country with the use of smart devices such as smartphones, smartwatches, and smart TVs. The Digital India initiative of the GoI, and its Smart City programme covering 100 cities/towns (as of now) are all expected to further lead to better connectivity and increased digitisation in India. These developments over the medium to long term will also fuel the growth of the T&M equipment market. Though the T&M market is registering a steady growth, it does have its share of challenges. Imports of low quality foreign products that are sold by traders across India are harming the country’s self-reliance. Demand for T&M equipment will continue to grow as long as there is development in the country, which is seen as a given over the medium term. Several T&M CoS are working with the Make in India initiative, and have plans to expand our manufacturing capacity over the medium term. The T&M industry in India has performed very well in the last few years, and the future also looks bright. This optimism essentially stems from the ambitions of the country’s power sector and growth in the energy, aerospace, defence, telecommunications and consumer electronics verticals. 

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