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2012 Modular Instrument Predictions: Results

January 09, 2013

The Danish physicist Niels Bohr is reputed to have said “Prediction is very difficult, especially about the future.”  At the end of 2011, I made 10 predictions about the industry for 2012.  It’s now 2013, so how did I do?  I grade each prediction below and add a running total.

1. Modular instruments will outgrow traditional products by 10 points.  While results are not final until National Instruments, Agilent, and Danaher report their final annual results, this isn’t even close.  Using key metrics within publicly stated earning results as proxies, modular likely outgrew traditional instrumentation by 15 to 20 points in 2012.  Bottom line: the modular adoption rate is accelerating. 1-0

2. Asia, and China in particular, will drive a big part of modular growth.
  Using NI results as a proxy, we can look at their regional results.  Sure enough, Asia is their fastest growing region with over 33% of all sales to date, their highest on record.  This matches my anecdotal observations of high adoption rates by Asian manufacturing sites.  2-0

3.  The RF PXI Juggernaut continues.  Frequent readers of this blog know the answer already.  PXI was on fire with hot new RF instrumentation in 2012.  Combine NI’s vector signal transceiver, Agilent’s fast RF vector generator, ZTEC’s 802.11ac solutions, and Aeroflex’s PXI systems, and PXI delivered new RF functionality in 2012 that simply doesn’t exist in a box format.  Expect this trend to accelerate with MIMO in 2013, as this is a naturally modular technology. 3-0

4. One “big iron” semiconductor test vendor incorporates PXI/AXIe.  All good things must end, and there goes my winning streak.  Ironically, PXI and AXIe are making strong headways into semiconductor test.  I’ve seen increasing modular adoption in characterization systems and mixed signal manufacturing test, but just not from the big semi vendors. Message to big iron vendors: Don’t let the innovator’s dilemma cause you to miss this disruption or opportunity.  3-1

5. Modular instruments accelerate transformation of semiconductor characterization market.  As I stated above, more and more characterization is being done with modular systems.  This is particularly true with mixed-signal devices, and very true with RF.  Note how Qualcomm unveiled their use of the NI vector signal transceiver for device characterization.  4-1

6. Three more companies join AXIe. Informtest, a Russian-based VXI manufacturer joined the AXIe Consortium earlier this year.  But that is one new member, not three. 4-2

7. Big Physics embraces AXIe.  This one is still pending and looks promising.  I know of a research lab that has built their own AXIe-compatible hardware for big physics.  I may write about this in a future column.  But I haven’t seen reports of widespread adoption…yet.  4-3

8. PXI software standards bring new levels of compatibility.  The PXISA technical committee continues to make good progress on the software requirements for multi-vendor solutions.  Not only that, but the AXIe consortium is adopting those same standards so that AXIe products appear as PXI when integrated together.  Great idea.  5-3

9. One large VXI to PXI/AXIe conversion.  VTI Instruments has essentially brought their dynamic signal analyzer measurement suite from VXI to PXI, while Teradyne offers a PXI-based high-speed serial tester to complement their VXI functional tester.  OK, that's two, not one. Still counts.  6-3

10. More evidence of the coming disruption of modular instruments.

Deep breath.  This was my boldest prediction.  For those who wonder what the “coming disruption” means, let me phrase it as an equation:

Nash Equilibrium + Porter’s 5 Forces = Disruptive change for T&M

If you don’t recall Nash and Porter, it may be time to dust off the old MBA and econ textbooks and refresh your memory.  These two concepts together explain how disruptive shifts occur in markets, and explain the modular adoption rate in automated test in particular.
  
My verdict?  The evidence is all around us.  Not only does the growth differential appear to be increasing, as shown in Prediction 1, but look at where modular is growing now: RF and semiconductor.  There is huge headroom for growth in each of these markets, and the number of modular solutions focused at these segments is rapidly increasing.  This will only accelerate the growth.  Like a pencil balanced on its point that starts to lean, we have reached the tipping point. We are now living in the disruption.
 
Final Score: 7-3

I’ll consider 7-3 a passing grade.  But what about 2013 you ask? That, dear readers, is a subject for a future blog.

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