Gordon Clements of Varta Microbattery urges a focus on the SME sector in 2005
With the manufacturing operations of nearly every tier one CEM and OEM now moved to the near or far east, suppliers to the UK electronics industry must put their focus squarely on the small and medium-sized OEM sector. Here, the key trend is towards product specialisation. OEMs designing and manufacturing specialist products with higher added value are thriving, particularly in the medical, industrial, telecom and POS markets, while companies making commodity, low value added products are either leaving the UK or dying out.
Perhaps surprisingly, given this trend, specialist design engineers are at a premium in the UK. So the successful component suppliers are those that make it easy for the designer to design their function in to a system. Suppliers of communications modules are particularly adept at this – these days, companies can, for instance, build modules for GSM, GPRS and Bluetooth into their designs without any specialist knowledge of wireless technology.
The need to make it easy to design in technology applies equally to batteries. Indeed, there is already a thriving collection of small, medium and large battery assemblers that offer the customer a turnkey solution and take away the pain of designing bespoke electronics, cell assembly and packaging. While the largest assemblers have followed their customers to the near and far east, we expect the small and medium-sized assemblers to continue to thrive.
Recently, traditional component distributors, particularly those with an electromechanical bias, have begun to seek to enter the battery business. Most take some time to adjust to the complexities of battery design and technology; few realise at the outset how long. But for those that persevere, the rewards are far more favourable than for categories of components such as connectors or switches.
Asian battery manufacturers have also cast their eyes on the UK. But the typical specialist customer requires high quality, high reliability and high repeatability, particularly in the medical and specialist industrial markets. For very high volume manufacturers, this means that there are richer pickings to be had elsewhere, and so most Asian manufacturers have remained focused only on the UK’s diminishing tier one sector.
Our view is that in 2005, more than ever before, customers need to take care to choose the right battery partner for their specific requirements. Most battery suppliers have a specialisation or niche; few are able to meet everyone’s needs.
So the successful companies in the battery market will be the specialists that are focused on providing high value for low volume applications.
Gordon Clements is general manager at Varta Microbattery (UK)