The global market for electromechanical and solid-state relays is expected to reach $4.2 billion by 2007, according to a study published by Venture Development Corp., Natick, Mass., a technology market research and strategy consulting.

While global relay consumption contracted during the period from fiscal year 2000 to fiscal year 2002, demand rebounded in the second half of 2003 and 2004 at 10 percent to 15 percent growth rates. Long-term growth rates from three to five years are expected to slow to approximately 3 percent to 4 percent, with the highest increase expected in the Asia-Pacific region.

According to VDC, more than 300 OEMs in the Americas, Asia-Pacific, Europe, Middle East and Africa were contacted for the survey, with the results indicating that the following trends will shape relay consumption in Asia over the next three years:

  • Electromechanical relay growth within telecommunications, automated test equipment and automotive markets.

  • Price pressures in commodity-type relay categories, driven in part by the increased number of low-cost Chinese relay manufacturers.

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

  • 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.”

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