Global electronic switch market to drop 9% in 2009
However, the market will grow 4% next year as switch demand increases
By James Carbone -- Purchasing, 9/17/2009 2:00:00 AM
The global market for switches will decline by about 9% to about $5.7 billion in 2009, but post modest 4% growth in 2010, according to researcher Decision in Paris.
Switch revenue fell because of weak demand during the recession and declining prices for many products. However, the switch market appears to have bottomed out and suppliers say business is better than it was earlier in the year.
"Orders are generally picking up, but not across all sectors," says David Webber, director of product management for C&K Switch in Newton, Mass. "We have seen more requests for quotes in August than we typically would have seen. Buyers are looking for low-cost solutions," he says.
Buyers are also being very cautious about how much they order, says Kiyoko Toyama, president of NKK Switch in Scottsdale, Ariz. "They are shopping around. In some cases they will buy smaller quantities even if they end up paying more per device." She says they don't want to build inventory.
"Right now it is a hand-to-mouth business," she says.
While business is down, Webber says some segments are better than others.
"The marine market has been strong and some aftermarket and replacement types of applications have been good," he says.
Toyama says the broadcast and military segments have fared better than others during the recession. She expects growing demand for sealed switches once the economy turns. Medical equipment and transportation are two segments that need sealed switches.
Sealed switches are used in applications subject to harsh environments. They are used in marine applications such as boats because they are water resistant. They are used in off-road vehicles such as farm equipment or earth-moving equipment and in medical equipment.
NKK makes sealed rockers, toggle and pushbutton switches for various applications. Margins can be higher than unsealed switches.
Webber says sealed switches may have different characteristics than unsealed switches. For instance, alcohol-based cleaners may be used in hospitals which can dry out plastics in a switch over time so different plastics may have to be used in the switch.
"Some customers may want the switch to have a clacking sound because a diesel engine may be running and it is loud and vibrating and they want to know when the switch is activated," he says.
Long life and reliability are important for sealed switches because they are used in equipment that may require switches to be actuated dozens not hundreds of times a day. So a switch may have to be designed for 500 million actuations. "By comparison a switch used in telecom equipment may be activated 30,000 times in its lifecycle which is a reach," says Webber.
See also:Switch prices will fall; leadtimes remain stable
Now Playing: 