The modular instrument market is expected to grow at a compound annual growth rate of 9.31 % to reach a market size worth US$3.052 billion by 2026. This market was valued at US$1.637 billion in 2019.
Modular instruments consist of various types of functional cards that are assembled to accommodate several input/output channels for different applications and to enable the user to customize their measurement capabilities. As a result, it uses a computer-based user interface instead of display and control devices built into the instrument, hence the name "faceless instruments". Additionally, it is equipped with programming interfaces known as drivers. Electronic and mechanical products can be designed, built, maintained, tested, and repaired using this equipment. Due to their cost-effectiveness, compactness, flexibility, and speed, modular instruments are utilized in photonic, submicron, and nanoscale technologies, as well as mechanical and electrical engineering. The equipment can be used to test, monitor, and perform user-defined measurements. The market growth is expected to be driven by technological advancements and advancements in communication and networking, as well as an increase in electronic device adoption.
The Growth of IoT Devices Is Generating New Opportunities for the Market
By 2026, 30 billion devices will be connected, according to a GSMA report. Aside from tracking devices, vehicles, utility meters, consumer electronics, and vending machines with wearable technology, IoT-connected devices also include smartphones and tablets. As a result, with the growing adoption of smart devices, test, inspect, and verify equipment has become essential for ensuring that the devices are functioning accurately and reliably. Additionally, the proliferation of connected devices motivates more testing of the devices' feasibility, which in turn leads to the adoption of modular instruments. Providing smart IoT solutions to the world, Dahua Technology, a leading video-centric IoT player, has launched its DSS Video Management Software (VMS) Version 8.0 in North America. As part of the software upgrade, a smaller installation package has been implemented, faster startup time has been achieved, as well as a secure design that is easy to deploy. In addition, the DSS is highly scalable and efficient, optimizing users' investment.
Rise of Wireless Devices
A number of factors including wireless devices and the emergence of Narrowband IoT (NB-IoT) and mobile IoT standards such as Bluetooth Low Energy (BLE) and LTE-M will drive the market growth. Thus, the growth of mobile devices and the adoption of smart devices have spurred the demand for wireless technologies. Increased adoption of smartphones and better network coverage has also contributed to the growth of mobile data. As a result of the aforementioned developments, modular test equipment is now needed to minimize issues in the initial development of wireless equipment. As an example, the US Department of Defense's base budget for FY 2021 is USD 633 billion, which is the largest defense budget for the year. This may eventually result in higher sales of modular testing equipment since modular testing equipment is used to monitor command and communication networks as well as surveillance applications.
Industry Growth in Electronics and Semiconductors
Various components and devices are tested using modular instruments at different stages of the manufacturing cycle, gauging system efficiency and efficiency of the components. Meanwhile, the development of the global 4G and 5G infrastructure has also contributed to the growth of the market. Significant increases in long-term evolution (LTE) systems, as well as the adoption of smart devices and substantial growth in mobile data traffic, have resulted in a growing need for advanced modular instruments for the development of newer technologies, such as 4G and 5G. For instance, The Japanese government has a high priority when it comes to deploying 5G. Ministry of Internal Affairs and Communications (MIC) is the agency leading the 5G initiative. The largest number of subscribers belongs to NTT DOCOMO, Japan's oldest mobile carrier. Japan's major cities will be the first to enjoy limited commercial 5G service starting on March 25, 2020. Over $7 billion will be invested in expanding the company's network by 2025 to cover 97% of the country's population. The company plans to build 8,001 base stations in the 3.7GHz and 4.5GHz spectrum bands, and 5,001 base stations in the 28GHz band.
The High Cost of Modular Instruments Can Hamper the Growth
High instrument costs combined with the requirement of highly skilled labor are limiting the growth of the market. In addition, the increasing demand for leasing and rental services for modular instruments also hampers the market. Yet, smart product companies and wireless technology companies are concerned about modular instruments' costs and use. Therefore, the steady growth of the market has been caused by a growing concern among companies. As a result, companies adopting modular instruments use rental and leasing services to take advantage of cost savings opportunities.
A Significant Market Growth Is Expected in North America
There is a surge in the number of connected devices due to LTE, technological advancements in wireless connectivity technologies including general packet radio service (GPRS), Wi-Fi, and global interoperability of microwave access (WiMax) in various fields. Thus, automated test and measurement (T&M) is increasingly being configured using modular devices in North America. As North America's interest in electric vehicles grows, so does the need for a seismic shift in how to design verification and performance testing are done. In order to reduce cycle times and increase productivity, engineers are now using emulation methods to test components. A survey by the US National Renewable Energy A good example is Tesla's acquisition of Maxell Technologies in 2019, a firm that pioneered the development of ultra-capacitors and high-power density capacitors. Maxwell's dry battery electrode technology could enable Tesla to extend electric car range beyond 400 miles and achieve its goal of cheap, long-lasting batteries.
Impact of COVID-19
The modular instruments market was negatively impacted by COVID-19. A significant reason for the decline in modular instruments is the massive downturn in the global semiconductor industry. A number of countries imposed lockdowns in response to the pandemic, causing further disruption throughout the supply chain. In the initial period, these difficulties made obtaining raw materials even more challenging.