Asia fueling growth in electromechanical, solid-state relays

Natick, MA— The worldwide market for electromechanical and solid-state relays is expected to reach $4.2 billion by 2007, according to a recent study by Venture Development Corp. (VDC). While implementation of relays contracted during the 2000-02 fiscal years, demand rebounded in the second half of 2003-04, posting 10-15% growth rates. Increases during the next three to five years are projected to slow to approximately 3-4% with the most growth expected in the Asia-Pacific region.

• In the Americas, relay consumption is expected to increase from $1.15 billion in 2003 to $1.39 billion in 2007;

• In the Europe, Middle East, Africa (EMEA) region, relay implementation is projected to increase from $1.14 billion in 2003 to $1.37 billion in 2007;

• In the Asia-Pacific region, relay use is expected to grow from $1.12 billion in 2003 to $1.48 billion in 2007; and

• Consequently, the worldwide consumption of relays is expected to increase from $3.42 billion in 2003 to $4.24 billion in 2007.

VDC reports that it surveyed more than 300 OEMs and end-users in the Americas, EMEA, and Asia-Pacific regions. It also identified several trends that it says will shape relay consumption in Asia during

• Increasing use of electromechanical relay in telecommunications, ATE, and automotive markets;

• Price pressures in commodity-type relay categories, driven in part by increasing numbers of low-cost Chinese relay manufacturers;

• Conversions to solid-state technologies in select industrial and commercial markets; and

• Shift in consumption to Asian markets, with the highest growth expected in the People’s Republic of China.

‘Relay suppliers are facing significant challenges in competing with traditional competitors and low-cost manufacturers,” says Rick Barnard, VDC’s practice director. “Suppliers are adopting a number of strategies to establish their presence in Asia. This has enabled those relay suppliers to better compete in the highly commoditized relay markets. However, additional pressures on margins are expected to continue. These trends will dramatically impact the competitive landscape over the next three to five years.’

Control Engineering Daily News Desk
Jim Montague, news editor
jmontague@reedbusiness.com

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