Analysis of the Global Ultrasonic Non-Destructive Test Equipment Market

Analysis of the Global Ultrasonic Non-destructive

Test Equipment Market Phased Array Ultrasonic Test Equipment Outpacing the Market

NCA7-30

October 2013

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Research Team

Nikhil Jain Senior Research Analyst

Measurement and Instrumentation

[email protected]

Lead Analyst Research Director

Vijay Mathew Program Manager


[email protected]

Strategic Review Committee Leader

Sujan Sami Industry Manager


[email protected]

For More Information:

Jeannette Garcia Corporate Communications- North America


[email protected]

+1.210.477.8427

mailto:****@frost.com

mailto:[email protected]






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Contents

Section Slide Numbers

Executive Summary 4

Market Overview 9

• Market Definitions 10

• Key Questions This Study Will Answer 13

• Market Segmentation 14

• Market Distribution Channels 16

Drivers and Restraints—Total Market 17

• Market Drivers 18

• Market Restraints 25

Forecast and Trends—Total Market 31

• Market Engineering Measurements 32

• Forecast Assumptions 34

• Unit Shipment and Revenue Forecast 35

• Unit Shipment and Revenue Forecast Discussion 36

• Percent Revenue Forecast by Region 37

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Contents


• Revenue Forecast by Region 38

• Global Hot Spots 39

• Revenue Forecast Discussion by Region 40

• Revenue Forecast by Vertical Market 41

• Revenue Forecast Discussion by Vertical Market 42

• Revenue Forecast by Distribution Channel 44

• Revenue Forecast Discussion by Distribution Channel 45

Market Share and Competitive Analysis 47

• Market Share 48

• Market Share Analysis 49

• Competitive Environment 52

• Top Competitors 53

• Product Highlights 54

• Competitive Factors and Assessment 56

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Contents


Thickness Gauges Segment Breakdown 57

• Thickness Gauges Segment Key Findings 58




• Pricing Trends and Forecast 63

• Pricing Trends and Forecast Discussion 64




Digital Flaw Detectors Segment Breakdown 69

• Digital Flaw Detectors Segment Key Findings 70




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Contents







Phased Array Flaw Detectors Segment Breakdown 80

• Phased Array Flaw Detectors Segment Key Findings 81









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Contents


Test Machines Segment Breakdown 91

• Test Machines Segment Key Findings 92









North American Breakdown 102

• Revenue Forecast 103

• Revenue Forecast Discussion 104



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Contents


European Breakdown 107





Asia-Pacific Breakdown 112





Rest of Worl Breakdown 117





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Contents


The Last Word—Three Big Predictions 122

Appendix 125

• Market Engineering Methodology 126

• Additional Sources of Information on Nondestructive Testing 127

• List of Companies in “Others” 128

• Learn More—Next Steps 129

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Return to contents

Executive Summary

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• The highest revenue generated in the ultrasonic nondestructive test (NDT) equipment

market is from the test machines segment, whereas the highest volume sales is in the

thickness gauges segment.

• Phased array flaw detectors represent the highest growing segment in the ultrasonic

NDT equipment market, both in terms of revenue and volume.

• The average price per unit in the phased array flaw detectors segment is decreasing at a

rapid rate, with a 22% reduction in price forecasted from 2012 to 2017.

• Within the phased array flaw detector segment, existing participants are introducing

more new products than before, and new participants are entering this booming

segment.

• Oil and gas—followed by power generation and aerospace, military, and defense—is the

highest revenue contributor to the ultrasonic NDT equipment market.

• The market is growing the most in Rest of World (ROW), with growth occurring in the

Middle East, Africa, and South America.

• GE Measurement and Control Solutions and Olympus NDT are the leading market

participants. Sonatest PLC is a distant third.

• The highest number of participants exist in the test machines market segment, which is

dominated by system integrators.

Key Findings

Source: Frost & Sullivan

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Compound

Annual Growth

Rate

5.4%

(CAGR, 2012–2017)

Market

Concentration

58.5%

(% of market share held by top

3 companies)

Market Engineering Measurements

Market Stage

Mature

Market

Units/Volume

37,518

(2012)

Average Price

Per Unit

$12,000

Market Size for

Last Year of

Study Period

$585.7 M

(2017)

Customer Price

Sensitivity

7.3

(scale:1 [low] to 10 [high])

Degree of

Technical

Change

4.3

(scale:1 [low] to 10 [high])

Market Revenue

$450.2 M

(2012)

Total Ultrasonic NDT Equipment Market: Market Engineering Measurements, Global, 2012

Market Overview

Base Year

Market Growth

Rate

5.0%

For a tabular version, click here. Stable Increasing Decreasing

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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Replacement

Rate

6.8

years

(average period of unit

replacement)

Average

Product

Development

Time

2

years

Number of

Competitors

50–75

(active market competitors in

base year)

Attachment

Rate

5

(current number of units per

user—base year)

Market Engineering Measurements (continued)

Competitor Overview

Stable Increasing Decreasing

Total Addressable Market

Industry Advancement

Marketing

Spend as a

Percent of

Market Revenue

2.5%

Average R&D

Spend as a

Percent of

Market Revenue

6.5%

Maximum

Attachment

Rate

30

(maximum potential number of

units per user—2012)


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CEO’s Perspective

2 Equipment manufacturers are moving toward

low-end phased array flaw detectors that

provide basic functionalities.

3 Because of maturing technology, customers

have placed extra emphasis on equipment

features and software capabilities.

4 High growth regions include regions in ROW,

such as the Middle East, Africa, and Latin

America (especially Brazil).

5 A lack of skilled technicians, especially in the

phased array ultrasonic testing segment,

means that equipment must be easy to use.

1 In this market, year-over-year unit sales vary

considerably, and the market is quite

dependent on general economic conditions.


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Return to contents

Market Overview

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• For the purpose of this study, the market is defined as the revenue generated by the ultrasonic NDT

equipment manufacturers and the system integrators that sell integrated test machines globally.

• The geographic scope is global and is segmented as follows:

o North America—includes the United States and Canada

o Europe: includes Belgium, France, Denmark, Scandinavia, Germany, Italy, Luxembourg, the

Netherlands, Spain, Portugal, Greece, Turkey, Russia, the United Kingdom, Serbia, Slovakia, Croatia,

Romania, Bulgaria, Estonia, Belarus, Hungary, Azerbaijan, the Czech Republic, Ireland, Switzerland,

Poland, and Ukraine

o Asia-Pacific—includes Greater China (China, Hong Kong, and Taiwan), Japan, South Korea, Pakistan,

North Korea, India, ASEAN* countries (Singapore, Malaysia, Indonesia, The Philippines, Thailand, and

Vietnam), Central Asian countries (Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan, Kyrgystan)

Australia, and New Zealand

o Rest of World—includes countries in Latin America (such as Brazil, Mexico, Argentina, and other

countries in Central and South America as well as in the Caribbean), the Middle East, and Africa.

Market Definitions


Scope

Geographic coverage Global

Study period 2009–2017

Base year 2012

Forecast period 2013–2017

Monetary unit US Dollars

Conversion rate $1.00 = €0.77

$1.00 = £0.66

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The different product segments included in this study are as follows:

Thickness gauges—These are instruments that utilize conventional ultrasonic principles and can be operated

in different modes such as pulse echo, multiple echo, or echo to echo. These modes define how the

measurement is made. The thickness gauges can be further sub divided into precision gauges and

corrosion gauges. Corrosion gauges are used to measure the remaining wall thickness in metal pipes, tanks,

structural parts, and pressure vessels that are affected by internal corrosion. Precision gauges are more

applicable in the aerospace and automotive industries, which require greater accuracy in measurements and

the ability to measure thin metals.

Digital flaw detectors—Also known as mono-channel flaw detectors, these are instruments that operate on

conventional ultrasonic principles and typically possess 1 to 4 channels for measurement. Most digital flaw

detectors are extremely portable, with the handheld variants being very popular. This segment includes high-

end benchtop variants, as well.

Phased array flaw detectors—These work on the phased array ultrasonic principles and are typically

combined with time-of-flight diffraction (TOFD) to provide a holistic ultrasonic testing instrument. Based on

features, phased array ultrasonic flaw detectors can be sub-divided into low-end, mid-end, and high-end

varieties. The low-end and mid-end detectors are portable instruments, whereas the high-end ones are

benchtop instruments. Any portable or benchtop unit that possesses phased array ultrasonic capability is

included in this segment.

Test machines—These are systems sold mostly by system integrators for use in a manufacturing

environment. These systems are typically integrated with the production lines that include mechanical frames.

These can also be used offline as a fixed-test system. They are highly customized for specific applications and

end-client needs. This segment includes revenue generated from mechanical systems, as well.

Market Definitions (continued)


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The end-user industries covered in this study are as follows:

• Oil and Gas—includes refineries, on-shore and offshore oil and gas wells and rigs, on-shore and off-shore

oil and gas pipelines, and chemical and petrochemical plants

• Power generation—includes energy companies; utilities; and co-generation, renewable, and non-

renewable power plants.

• Aerospace, military, and defense—includes commercial and private aviation and military- and defense-

related research labs

• Automotive and transportation—includes the automotive and transportation industries, such as

roadways and railways

• Others—includes government and educational institutions; process industries; the mining industry; and

companies involved with inspecting civil infrastructure, which includes such structures as buildings, bridges,

and stadiums

Revenue for all end-user industry segments includes equipment sold for both testing during the manufacturing

of individual components—such as tubes, bars, pipes, plates, strips, vessels, billets, and castings—and the in-

service inspection of these components.

Market Definitions (continued)


The scope of this study does not include guided wave ultrasonic testing, laser ultrasonic testing,

corrosion monitoring that uses permanently installed ultrasonic sensors, ultrasonic transducers,

and the probes that are sold individually as consumables and not with new equipment.

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Key Questions This Study Will Answer

Is the ultrasonic NDT equipment market growing, how long will it continue to grow, and at what rate?

What are the strategic growth regions and the factors driving and restraining these markets?

How is the competition in the market structured? What is the competitive environment for individual

product segments?

Which end-user industry segments will offer growth opportunities in the next 5 years?

Are the products/services offered today meeting customer needs or is additional development

needed?

Which product segments offer the highest growth opportunities, both in terms of revenue and

volume sales?


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Market Segmentation

*A list of “Other” verticals can be found here. Source: Frost & Sullivan

Ultrasonic NDT Equipment

End-user segmentation Product segmentation Geographical segmentation

Aerospace, military,

defense

Thickness gauges

Digital flaw detectors Power generation

Oil and gas

ROW

Asia-Pacific

Europe

North America

Test machines

Phased array flaw

detectors

Automotive and

transportation

Others*

Ultrasonic NDT Equipment Market: Market Segmentation, Global, 2012

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Market Segmentation (continued)

Thickness gauges, 11.8%

Digital flaw detectors, 13.3%

Phased array flaw detectors,

18.9%

Test machines, 56.0%

Total Ultrasonic NDT Equipment Market: Percent Sales Breakdown, Global, 2012


Key Takeaway: Test machines are set to dominate through the forecast period. However, phased

array flaw detectors are expected to grow rapidly.

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Global Hot Spots

China China has been considered a closed market for global

companies with many finding it difficult to sell in the country.

However, a growing need to meet quality policies for exports,

especially in the booming aerospace industry, has driven

demand for ultrasonic NDT equipment from well-known

global brands.

Africa With many emerging markets in Asia-Pacific facing difficult

economic conditions, Africa has emerged as a growing market

for ultrasonic NDT equipment. New projects announced in

countries such as South Africa, Nigeria, Algeria, Tunisia, and

Libya are driving demand in this region.

Middle East High oil and gas prices have enabled continued

investment in upgrading and building newer

infrastructure in the oil and gas industry. There

have been a number of new projects announced in

Saudi Arabia, the United Arab Emirates (UAE),

Iraq, and Kuwait. These projects are expected to

drive the ultrasonic NDT equipment market in the

region.

Brazil Exploration and production in the pre-salt oil reserves are

driving the ultrasonic NDT equipment market in Brazil. Also,

Petrobras has announced a plan to invest $220 billion in

developing oil and gas infrastructure in Brazil. This coupled with

development in the power generation industry will drive the

need for ultrasonic NDT equipment.


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For More Information:

Jeannette Garcia

Corporate Communications


+1 (210) 477-8427

[email protected]

Business

Analysis of the Global Ultrasonic Non-Destructive Test Equipment Market