The reflow soldering equipment market in North America is experiencing a resurgence in sales due to the use of lead-free solder paste and the move to lead-free compatible equipment, despite lower wages and price pressures from overseas competitors.
Quality has always been the mainstay of machinery manufactured in this region and continued product enhancements have helped in drastically improving operational costs as well as machine down time.
Frost & Sullivan's North American Reflow Soldering Equipment Market report shows that revenues in
the industry totaled $41.3 million in 2005 and is estimated to reach $68.1 million in 2012.
"In a mature market like reflow soldering, significant changes can mostly be attributed to the occurrence of process changes," explains Frost & Sullivan Research Analyst Deepa Mathew. "Complying with Restriction of the Use of Hazardous Substances (RoHS) guideline has created a pressing and
immediate need for compatible equipment that can withstand the new process parameters, thus boosting market growth."
The new lead-free paste has higher reflow temperatures, which the current equipment cannot handle. In order to comply with the RoHS deadline by Jul. 1, 2006, assemblers had to upgrade their equipment by investing in new reflow ovens engineered to withstand higher temperatures and have better control over the soldering process.
Increased competition from low-cost nations, particularly from the Far East such as China and Taiwan, is also affecting the market. Since the shift of high-volume surface mount technology (SMT) assembly to these areas, local manufacturers in these regions have introduced reflow equipment. This equipment with lowered pricing is a hurdle even to well-established vendors located in Europe and North America.
"With outsourcing becoming a trend to reduce manufacturing costs, China and Taiwan have emerged as the major hub of large volume SMT assembly," explains Mathew. "Equipment suppliers face severe price pressures from these overseas competitors and the average price of reflow equipment has fallen dramatically over the past years, owing to the threat from these low-cost countries."
