25 May 2022

How has physical & structural testing evolved since COVID-19?

More testing channels are being used today than ever before, especially within the manufacturing sector. Preston Reine, Principal Analyst at Interact Analysis, provides an insight.

What is the testing market and why is it important?

The way that automobiles, airplanes, white goods, industrial machinery, and so many other manufactured products are designed and brought to market is evolving at an increasingly rapid pace.

The manufacturing sector evolves by finding the safest, most efficient way to bring products to market, and this process has become more time-sensitive than ever before across a wide range of sectors.

To bring products to market faster, industrial testing providers have had to adapt at an accelerated rate to meet growing market expectations. For example, manufacturers continue to expedite their engineering and design process, but the amount of data gathered in these activities is also growing exponentially. This means that more testing channels are utilised today than ever before, and despite that, the expectation remains that the research and development (R&D) timeline is also simultaneously shortened.

The pandemic has shown how supply chains, and the overall economy, can be affected when products are not readily available. Without the supply of key economic staples, the growth of the manufacturing sector overall can struggle.

Interact Analysis is actively engaging with leading test technology vendors to understand the diverse regional perspectives of the market. Thus far, it has become clear that the pandemic and ensuing supply chain issues have been at the forefront of everyone’s mind affecting all vendors in terms of lead time increases and sales declines from 2019 to 2020.

In North America, there is a large push for utilising simulation technology, whilst in other regions there is still an important emphasis on running multiple physical tests on equipment and end products whatever they may be.

Tesla is a big influencer of this trend in the automotive sector due to increased reliability and accuracy in its testing procedures. In China, brand loyalty is on the rise and more local players are entering this market now that trade concerns have led the Chinese government to strongly encourage local investments and partnerships. The demand for Western technology is very much entrenched, though replicator technology is a risk to supplant the market share that these Western companies have enjoyed once manufacturers look to renovate existing testing protocols that are already in place.

Other general feedback of note thus far from the research includes:

  • Overall, the market for physical and structural testing appears to have declined by about 25-30% in 2020 and on average companies have reported sales growth of 15-20% in 2021. Sales growth is expected to be similar in 2022.
  • When polled, research participants collectively identified wireless data acquisition (DAQ), telemetry-based acquisition, and digital sensor technology as the key trends shaping the future of the physical and structural testing market. Software makes up a relatively small percentage of most supplier revenues whereas DAQ hardware is the largest source.
  • Many suppliers are unaware of the market landscape in Asia because of murky distribution partnerships, so this report is focused on identifying the leading local suppliers in countries like China and India.
  • End-users (that is, the companies that utilise testing hardware and software) have the free cash available to make investments. But increases to lead times have noticeably halted orders in the second half of 2021. In the automotive sector specifically, total capacity is only at about 50%, due to an average 93-week lead time for semiconductor chips. This likely means that testing suppliers can expect dampened, but sustained growth as the global supply chain issues ease gradually through 2022 and potentially into 2023. The other factor leading to a slowdown in market activity is a lack of personnel for conducting tests in person, which can either shift the focus to more digital approaches or can stymie investment altogether.

Supply chain issues

Testing vendors have focused less on customisability so that they can order the raw materials needed in bulk. If every sale was customised, the vendors would not be able to accurately forecast how much to buy, and possible delays could be too long therefore preventing a sale. This means that “semi-custom” could be the norm for the short-term at least.

With the aggressive targets in all major economies to phase out the internal combustion engine (ICE) in future automobile sales, tests on secondary noise are now a major focus because the loud ICE would normally drown out the secondary noises that have now surfaced and become a primary concern.

As experienced engineers age out and leave the industry, newcomers have less technical know-how with regards to the proper testing and measurement protocols for large industrial equipment. This means that data interpretation and analytics is growing exponentially in importance, consequently, testing providers that can add value with data are best poised for success in the future. Most testing procedures have increased the number of channels required by a factor of at least 10, so the transition to a more data-intensive industry is only going to increase in the future.

A major focus of this shift towards more data proficiency will be Multiphysics DAQ, because as data collection and interpretation becomes more complex, every leading vendor is identifying ways to offer complete DAQ with regards to durability and fatigue. Durability and fatigue testing is a major application considered in the scope of this research, and it appears to account for over 30% of market revenues globally.

Company info: Interact Analysis