Global PXI Test & Measurement market to reach $1.88 Billion in 2025

The PXI test and measurement market is valued at USD 937.59 million as of 2019 and expected to reach USD 1.88 billion in 2025, recording a CAGR of 12.3%.

Asia Pacific is the fasted growing PXI market representing for 43.22% of global PXI test and measurement market.

Electrical vehicles, communication and defence are the three biggest growth segment for the test and measurement market.

Definition / Scope
Market Overview
Key Metrics
Market Risks
Top Market Opportunities
Market Trends
Industry Challenges
Technology Trends
Regulatory Trends
Market Size and Forecast
Market Outlook
Competitive Landscape
Key Market Players
Strategic Conclusion
References

Definition / Scope

The Test & Measurement solution offers essential test, calibration and metrology equipment, instruments, software and services used to create actionable intelligence by measuring and monitoring a wide range of parameters in the biotech, food & beverage, energy, industrial, technology, pharmaceutical and specialty chemical industries.

Currently, the Test & Measurement market is seeing exceptional growth because of increased modular instrumentation penetration, increased networking and communication advancement, and increased electronic device adoption.

PXI Test and Measurement

In a PXI system, a chassis provides power, cooling, and a communication bus for modular instruments or I/O modules. These modules could be controlled from either an embedded controller or an external PC, using one or several specialized engineering software tools to customize the system.

PXI combines PCI electrical-bus features with the modular, and then adds specialized synchronization buses and key software features. PXI is both a high-performance and low-cost deployment platform for applications such as manufacturing test, military and aerospace, machine monitoring, automotive, and industrial test.

PXI Components

PXI Chassis

The PXI chassis provides the means by which the whole PXI test system is able to be held together. The chassis contains the high-performance PXI backplane, which includes the PCI bus and timing and triggering buses.

PXI Controller

PXI Controllers are either embedded or remote. Embedded controllers contain everything that is needed to run the PXI system without an external PC, while remote controllers let control the PXI system from desktops, laptops, or server computers.

PXI Modules

PXI modules interface to bus standards, acquire data, synchronize devices, generate and route signals, and make measurements.

Software

Software supports the most common programming environments such as Visual Studio®, C, C++, Visual Basic, MATLAB® and LabVIEW to run the PXI products and system.

Market Overview

Peripheral component interconnect (PCI) extensions for Instrumentation (PXI) is an open modular standard in the automated test and measurement. It serves high measurement speed, small footprint, and low power consumption compare to legacy test and measurement technique.

The PXI technology is highly applied in various sectors including, wireless technology, aerospace, defense and consumer electronics industries. Accurate testing and measurement is critical in electronic systems design and manufacturing to ensure product quality.

Test and measurement (T&M) systems play an essential role in ratifying the performance of a wide range of electronic products.

Wireless communication segment holds the majority of market share and still showing promising growth aspects in coming years. PXI module is very popular in wireless communications technology particularly in PXI-based platforms to assist complex and challenging test requirements for radio frequency (RF) in wireless communication.

The massive growth in the field of wireless communication particularly in Asia Pacific region has kept the growth rate of PXI market high over the years.

Asia Pacific is the fasted growing PXI market attributed the growing wireless communication industry and increased defense and aerospace research budget by the government in this region. The APAC market accounts for 43.22% of global PXI test and measurement market.

The North American market contributes more than 30% towards global PXI earnings. EMEA is the third largest market nearly representing one-fourth of the worldwide market.

On the basis of the product and system types, the global PXI market can be segmented in ten different classes namely, Chassis, Instrument Controllers, Digital I/O, Oscilloscopes, Signal Generators, Signal Analyzers, Network Analyzers, Digital Multi-meters, Switches, and SMUs & PMUs.

Key Metrics

Metrics	Base Year 2019
Global T & M market size, growth rate CAGR	USD 26.70, 3.9%
PXI T & M Market Size, CAGR	USD 937.59 million, 12.3%

Market Risks

Trade regulation

The trade tariffs and export controls on shipping products may have an impact on export business. Since many of the business operations and supply chain have worldwide blanket, the implementation of tariffs and export controls could create risk for the exporters and importers.

In 2018, for instance, the United States Trade Representative imposed a 25% tariff on many products, including PXI test and measurement products that are made in China and imported into the United States.

Also in 2018, the United States Department of Commerce announced that it has commenced a review of new export controls focusing on emerging and foundational technologies. Such tariffs could have adverse effect on business and financial result.

Moreover, the retaliatory tariffs like those impositions on products made in the United States and imported in China have slowed the sales growth in the affected trading partner countries.

Top Market Opportunities

Tests and measurements are executed in many industries by using various test equipment, and the healthcare sector uses medical equipment. This demand for test and measurement is also stroking the electronic original equipment market.

Test and measurement equipment find applications in automotive, aerospace & defense, electronics & semiconductors, industrial, education, IT & telecommunication, and healthcare.

Owing to the growth prospects and production escalation in the automotive sector, the application CAGR of test and measurement market in health care will be 10.8% and over 9% in transportation automation.

Overall, the market is worth over USD 30 billion to capture during 2019-2025.

Market Trends

5G semiconductor test

The leading global telecom players like AT & T, Verizon, China Mobile, and NTT cannot accelerate the 5G adoption without the PXI Test and Measurement manufacturers to test and measure 5G.

Companies such as Verizon, AT&T, and others, are rapidly switching to 5G networks, which continue to raise demand for 5G testers. The 5G penetration is likely to reach nearly 10% by 2025. Nearly 75 thousand 5G testers were sold in 2018.

As the market for 5G protocol is growing worldwide, the PXI test and measurement like testing 5G New Radio (NR), sub-6GHz emulator, Radio Frequency (RF) parts, testing on Smartphone devices and other electronic devices will also rise significantly.

Increasing investment and partnership

During 2019 alone, there were 325 deals that took place worth USD 12 billion worldwide.

Increment in Data Centers

Data centers are generating increasing demand for transmission speeds and new standards. The demand for greater bandwidth continues to increase, resulting in the need for higher transmission rates in data centers.

100G and 400G applications are, in turn, driving growth in the electronic test and measurement market by creating demand for higher speed instruments

Defense & Aerospace

The D&A industry is an important end-user segment in the T&M market that is typically a solid performer for vendors. D & A revenue exceeded USD 800 billion in 2019 worldwide.

The applications in D & A that will require PXI testing include ATE system, radar, Embedded Software test, and communication and electromechanical system test.

Defense spending in the U.S. is growing again, after multiple years of decline. Defense budgets and future growth are driven by the Trump government’s increased focus on strengthening the U.S. military.

In India, the government had allocated USD 63 billion for the development of the Indian armed forces for 2018-2019.

Aerospace electronics and avionics continue to advance, driving demand for advanced test solutions.

Also, Smart Weapons market size exceeded USD 13 billion in 2019 and is poised to grow at a CAGR of over 6% between 2020 and 2026. Smart weapons will draw more need for testing and measurement system in the days to come.

Moreover, Unmanned Ground Vehicles (UGV) Market size exceeded USD 2.5 billion in 2019 and is poised to grow at a CAGR of over 13% between 2020 and 2026. UAV is another segment that will drive testing and measurement market.

Likewise, Air Defense System Market size estimated at USD 27 billion in 2018 and is poised to grow at over 3% CAGR between 2019 and 2026.

IOT

Narrowband IoT (NB-IOT) and mobile IoT standards such as Bluetooth^® Low Energy (BLE) and LTE-M are creating a new part of the market that did not exist earlier. Spending hundreds of thousands of dollars on a tester is no longer feasible. Demand for parallel testing and low-cost instrumentation based on USB is thus increasing.

USB instrumentation is now available from a range of vendors. Initially strong in power meters, they have expanded beyond this product segment into core instruments. New USB instruments have also improved in quality, which is helping them make inroads into the T&M market.

With the proliferation of RF and new product introductions in different form factors, the use of vector network analyzers (VNAs), in particular, is increasing. Technology convergence in chips and devices is also driving convergence between network analyzers and RF signal generators.

IoT is also generating a growing need for inspecting, testing, and verifying smart products and other equipment to ensure that they work correctly once deployed. This is driving the need for more field DAQ systems.

Industry Challenges

Innovating the product

T & M equipment manufacturers face the challenge of delivering test and measurement devices that are thinner, smaller, lighter, and with higher performance.

With the increasing reduction in size well below optical wavelengths, rapidly increasing failure detection throughput times and decreasing quality assurance rate, test enabled diagnosis and yield learning has critically become challenging.

The past tools for failure learning are not becoming sustainable and hence such tools need to be augmented, impacting on both cost factor and design layout for the manufacturers.

Technology Trends

First Beam forming/5G Production Test Solution

The new TS-960e-5G production test system for mmWave devices used in 5G applications and networks is first introduced by Marvin Test Solutions in late 2019.

This testing system provides compact integrated test solution that can be configured with up to 24 independent VNA channels., up to 256 dynamic digital channels with per channel parametric measurement units (PMUs) and a wide range of digital and analog instrument options.

It is available with 5G software tools and with a digital vector conversion utility that supports ASCII, WGL, STIL, VCD, eVCD, and ATP vector formats.

Linux OS supports PXI system

With the guideline including PXI-1 to PXI-9 specifications in late 2018, the Linux OS is now supported for PXI/PXIe systems.

New PXI Controller

The recent launch in PXI Controller product line is the A 3U PXI Controller, which consumes 10w normally and 15w at most to support hybrid PXIe-based systems for multiple environment test and measurement applications. It is based on Intel Atom D2000 processors.

Regulatory Trends

PXI is an open industry standard governed by the PXI Systems Alliance (PXISA), which is a group of more than 70 companies chartered to promote the PXI standard, to ensure interoperability, and to maintain the PXI specification.

PXISA specifies guidelines for PXI hardware, specification, software specification, and system specifications.

The T & M equipment should abide by regulatory requirement for Electromagnetic Compatibility (EMC), requirement for electrical safety, requirement for environmental safety, and additional requirement for Chassis.

Market Size and Forecast

The overall test and measurement equipment market is expected to grow from USD 26.70 billion in 2019 to USD 33.56 billion by 2025, at a CAGR of 3.9%.

The PXI test and measurement market is valued at USD 937.59 million as of 2019 and expected to reach USD 1.88 billion in 2025, recording a CAGR of 12.3%.

Market Outlook

The global PXI mainframe market is estimated to reach USD 2.90 billion by 2025, CAGR 4.3% from USD 2.27 billion in 2019.

I/O link market revenue surpassed USD 3.93 billion in 2019, growing 12.2% CAGR and is forecasted to reach USD 7.84 billion by 2025.

The global digital signal processor market size is forecasted to reach USD 16.4 billion 2025, growing at CAGR 8.2% from USD 9.82 billion in 2019.

Signal generator market reached USD 1.06 billion in 2019, growing at CAGR 8%, the market will total USD 1.68 billion by 2025.

Network traffic analyzer market hit USD 1.9 billion in 2019 and will be worth USD 3.54 billion by 2025, surging at CAGR of 10.6%.

The global PXI SMU market size is projected to reach USD 311.06 million by 2025, from an estimated USD 124 million in 2019, growing at a CAGR of 16.5% during the forecast period.

Oscilloscopes market will total USD 883.9 million in 2025, from USD 546.53 million at 7.7% growth rate.

Digital multi-meter market will reach USD 1.11 billion in 2025, the market was recorded at USD 847 million in 2019, the growth rate is estimated to maintain at CAGR 4.3%.

The market for switches will reach USD 414.2 million surging at CAGR 1.3% by 2025.

The market is growing due to the increasing demand for this equipment in end-use sectors, such as automotive & transportation, aerospace & defense, IT & telecommunications, education & government, semiconductor & electronics, industrial, and healthcare.

Competitive Landscape

Threat of New Entrants: Low
Threat of Substitutes: High
Bargaining Power of Buyers: High
Bargaining Power of Suppliers: High
Competitive Rivalry: High

As evident from Porter’s Five Forces, PXI test and measurement businesses operate in a highly competitive market.

As technological trends continue to evolve and make paradigm shift in the electronics, defense, and aerospace industry, the need for new test and measurement solutions increases and only companies that can stay on top of current trends will remain successful in long-term.

Further, numerous companies make up the market, with the top competitors including ADLINK, Aeroflex, Keysight, Teradyne, and National Instruments. This means that for nearly every product that one player, for instance ADLINK, produces, there is some form of a substitute from a competitor in the market.

The PXI Test & Measurement market is displaying several favorable trends including the automation of laboratory instruments and test equipment and disruptive technologies in the T&M sector that enable real-time improvements to manufacturing operations.

The largest growth in test and measurement equipment market is due to increased automotive production and technological advancements involving 5G protocol.

Key Market Players

National Instruments

National Instruments was founded in 1970 with the designing and development of a General Purpose Interface Bus (GPIB). Later in 1986, it started LabVIEW, that provided engineers and scientists with the capability to program graphically using wires and icons as opposed to text based programming languages.

Then it first developed first plug-in DAQ boards for Macintosh and PC. Now, the company is in the business of designing and developing PCI and PXI equipments. The PXI platform provides customers with systems designed for measurement and automation systems.

The company made revenue of USD 1.35 billion in 2019. The domestic market, i.e. US market contributed 39.81% revenue share in 2019. Similarly, 30.38% of total revenue is generated from shipment in APAC markets. The EMEIA market accounted for the remaining 29.81% revenue share.

Teradyne (LitePoint, ZTEC Instruments)

Teradyne Inc is a US based company and is a developer and supplier of automatic test equipment. The company’s divisions comprise Semiconductor Test and Systems Test Group.

In 2011, Teradyne acquired LitePoint. The Company designs, develops, manufactures and sells automatic test systems used to test semiconductors, wireless products, data storage and complex electronics systems in the consumer electronics, wireless, automotive, industrial, communications, and aerospace and defense industries. In 2013, Teradyne acquired PXI vendor ZTEC Instruments.

Teradyne made USD 2.29 billion in revenue in 2019. The revenue from Asia-Pacific region totaled 74% of the overall earnings in 2019. The US market contributed 15% to total revenue and the revenue from European market accounted for another 10% share. Its market cap stood USD 12.64 billion as of June 2020.

Keysight

Keysight is an American company that manufactures PXI test and measurement equipment and software. The company operates through three segments: Communications Solutions Group (CSG), Electronic Industrial Solutions Group (EISG) and Services Solutions Group (SSG).

The CSG and EISG segments provide electronic design and test software, instruments, and systems used in the simulation, design, validation, manufacturing, installation and optimization of electronic equipment. The SSG segment provides integrated service solutions, including repair and calibration services, professional services and remanufactured equipment.

It made total revenue of USD 4.3 billion in 2019. The PXI test and measurement products are operated under Electronics segment. Its market cap was USD 19.36 billion reported in June 2020.

The revenue from US market accounted for 35.91%, 18.31% revenue was generated in China, Japanese market contributed 8.82% and 36.96% came from other global market.

Cobham (Aeroflex)

Aeroflex Inc. which used to produce test equipment, RF and microwave integrated circuits, components and systems used for wireless communications was was acquired by the UK aerospace company Cobham for USD 1.46 billion in 2014.

Cobham PLC designs and manufactures a wide range of equipment, specialized systems and components for the aerospace, defense, energy, and electronics industries.

It operates through four segments: Communication and Connectivity, Mission Systems, and Advanced Electronics Solutions, and Aviation Service. Advanced Electronics Solutions, formerly called Aeroflex deals with the PXI test and measurement products.

The revenue from Advanced Electronics Solutions segment was USD 824.42 million in 2019 while the company’s overall revenue grew over USD 1 billion in 2019. Advanced Electronics Solutions segment contributed 31% revenue share in 2019.

ADLINK

Adlink Technology Inc. is a Taiwan-based company engaged in the design and manufacturing of test and measurement, embedded computing, and automation products, as well as communication and computer products.

The company’s products line includes high speed data acquisition cards, high speed data recorder systems, industrial control software solutions systems, moving control cards, real-time remote control modules, remote data acquisition modules, machine vision solutions, digital image acquisition cards, embedded control systems, communications cards, embedded computer products, compact personal computer bus (PCI) platforms, advanced telecommunications association (TCA) platforms, industrial single-board computer platforms, embedded module solutions products, and modular computer products.

The revenue generated in 2019 was USD 355.26 million. The company’s market cap stood USD 1.5 billion (NT$ 15.39 billion) as of June 2020.

Strategic Conclusion

The Test and Measurement market is growing due to the increasing demand for T & M equipment in end-use sectors, such as automotive & transportation, aerospace & defense, IT & telecommunications, education & government, semiconductor & electronics, industrial, and healthcare.

The number of cars and other vehicles manufactured worldwide-surpassed 91.79 million in 2019. Moreover, electric vehicles witnessed staggering growth in 2019. Electric vehicles grabbed 2.2% of global vehicle market.

Early adopters attracted IN 2019, the market and there is still time for EVs to come into mainstream market. The demand for T & M equipment for EVs is strong because the autonomous vehicle needs to be tested for multiple functionalities such as sight, sensor, navigation, control, etc.

Apart from the transport segment, the roll out of 5G that began in 2019 will draw stronger demand for T & M equipment for 5G’s semiconductor testing and quality approval.

References

Appendix

PCI: Peripheral component interconnect
PXI:Peripheral component interconnect (PCI) extensions for Instrumentation
SMU: Source Measure Unit
EV: Electronic Vehicle
T & M: Test & Measurement