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The global conformal coatings market size was valued at USD 899.1 million in 2021 and is projected to grow from USD 940.8 million in 2022 to USD 1,392.8 million by 2029, exhibiting a CAGR of 5.8% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with conformal coatings experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of 6.0% in 2020 as compared to 2019.
Conformal coatings are polymer-based materials that are applied as a thin layer on a Printed Circuit Board (PCB). A few of the polymers include acrylic, epoxy, silicone, and urethane, among others. In general, these coatings adhere to the irregular surface of the PCB and form an insulating layer between different electronic components. The high dielectric strength enables devices with compact PCB designs and thus supports the rising trend for the miniaturization of electronic circuitry. Other than enabling the design of high voltage compact electronic circuits, conformal coatings also protect the exposed metal parts in a PCB from external factors such as humidity, temperature fluctuations, dust, and other airborne contaminants. Protection against these external agents is critical in limiting the corrosion of electronic components and can significantly enhance the service life of electronic devices.
Supply Chain Disruptions Due to Lockdown Restrictions Hampered the Conformal Coatings Market Growth
The global electronic manufacturing sector, which is majorly concentrated in the Asia Pacific region, has faced several challenges during the pandemic. Several governments across the globe imposed lockdown restrictions to curb the spread of the virus. This factor leads to supply chain disruptions, resulting in consequences such as raw material shortage, logistic interruptions, workforce shortage, and other uncertainties, slowing manufacturing activities. China is a major producer and consumer of crucial raw materials used in the coating production. The country alone accounts for a significant share of total global consumption owing to its robust electronic manufacturing sector. However, the restrictions enforced during the pandemic, along with trade disputes between the U.S. and China, resulted in severe market instabilities, with manufacturing companies facing challenges such as fluctuating demand, longer production downtime, and logistical delays. Raw materials such as resins, fillers, and other chemical compounds witnessed dramatic price fluctuations due to supply shortages, and the issue persists in several regions.
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Increasing Demand from Electric Automotive Segments to Drive Market Growth
The global automotive industry has been reinventing itself by moving toward the electrification of automobiles over the past few years. The amount of electronic systems used in these new types of electric vehicles are several folds higher than ever before. Essentially, every other function in the automobile is controlled by a bunch of microcontrollers and processors. A few major electronic systems that are becoming new standards in the automotive industry include chassis electronics, driver assistance, engine electronics, entertainment systems, integrated cockpit systems, passenger comfort, passive safety, transmission electronics, and other things.
PCB is at the core of all these electronic systems and devices, which provides a base structure to assemble all electronic components. Conformal coatings can enhance the service life of automotive electronics and improve the overall reliability of the vehicles, which is of paramount importance in the automotive industry. The product plays a critical role in developing robust automotive electronic systems to sustain harsh external conditions witnessed during the complete service life of the vehicle. The use of PCBs in automotive is anticipated to rise significantly during the forecast period owing to its wider adoption in autonomous and electric vehicles. Thus, rising demand from the electric automotive sector is anticipated to drive market growth.
Rising Demand from Consumer Electronics Industry to Drive Market Growth
Conformal coatings usage was historically limited to circuit board coating protection in the aviation industry. Due to advancements in material and processing technologies, these coatings are now being widely adopted in the consumer electronics industry, including consumer electronic products such as white goods and mobile electronic devices such as mobile phones, tablets, and wearable electronics. Smart household electronics are getting smarter by implementing new technologies such as artificial intelligence and machine learning. These electronic devices are not just capable of connecting with each other but can effectively communicate internally, enabling a unique and highly personalized user experience.
Large tech companies are investing significantly in developing new smart home technologies. They are also collaborating to create a conducive ecosystem for growth. For example, since 2019, big tech companies, which include Apple, Google, and Amazon, have formed an alliance to develop a standardized operating ecosystem for smart home devices that work across multiple platforms. The growing affordability of electronic devices and the development of supporting technology, such as 5G and IoT, are likely to ramp up the product demand to manufacture consumer electronics. The product is crucial in extending the life span of these electronic devices. Thus, rising demand for consumer electronics is anticipated to benefit and drive market growth.
Adoption of Stricter Environmental Regulations to Hinder Market Growth
The Volatile Organic Compounds (VOCs) released from conformal coatings are categorized as Greenhouse Gases (GHG) and are a threat to the environment. The coating facilities that are not equipped with infrastructure to capture the solvent vapors released during the manufacturing process vent it out into the atmosphere. Once these VOCs come in contact with nitrogen oxides emitted by incomplete combustion of fuels in vehicles and other industrial activities, they react to form tropospheric ozone. This factor also results in the formation of fine particulate matter, creating a situation known as ground-level smog. The ozone layer formed at ground level has the potential to wreak havoc by forming harmful chemicals that can hinder plant growth.
Additionally, these synthetic carbon-based coatings tend to chemically degrade and release toxins when exposed to heat, sunlight, corrosive chemicals, and a host of other environmental conditions. In response to rising concerns for the environment and public health, governments across the world are adopting stricter standards to limit the emission of toxic VOCs. For example, in March 2020, China adopted four mandatory national VOC standards in coatings, adhesives, inks, and cleaning agents. These new standards are likely to affect companies using these products in the electronics and electrical industry. Thus, the adoption of stricter health and environmental regulations is expected to hinder market growth.
Acrylic Segment to Account for a Significant Share Owing to Rising Adoption in Electronic Manufacturing Sector
Based on product, the market is segmented into acrylic, epoxy, urethane, silicone, parylene, and others.
In 2021, the acrylic segment dominated the market. The acrylic segment is driven by a surge in demand from the electronics manufacturing sector. These types of coatings are widely used in various end-use industries, including automotive, consumer electronics, and other industries. The acrylic coating is easy to apply, and the processing is relatively simpler. However, it has poor resistance to petroleum-based solvents and alcohols. This factor makes it relatively easy to repair. Acrylic has a moisture resistance that is similar to polyurethane and silicone. They have excellent mechanical and electrical properties. These types of coatings have good thermal stability with an operating temperature range of approximately -59°C to 132°C. They have an excellent dielectric strength of approximately 1,500 volts/mil. Its relative affordability makes it a cost-effective option for various end-use industries.
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Consumer Electronics Segment to Hold a Substantial Share Owing to Rising Demand in Miniaturized Electronic Applications
In terms of the end-use industry, the market is segmented into automotive, aerospace & defense, medical, consumer electronics, and others.
The consumer electronics segment accounted for a major share of the market. Electronic devices have witnessed a trend of miniaturization of electronic components over the past few years. Smaller PCBs along with miniaturized electronic devices arranged in a compact design can lead to circuit damage if the dielectric strength between components is low. Conformal coatings, when applied to these miniaturized PCBs can significantly increase the dielectric strength between electronic components, thus enabling the design of much more compact electronic circuits. Demand for compact, lightweight electronic devices is anticipated to increase significantly during the forecast period owing to advancements in IoT and 5G technology. These factors are driving the overall industry growth.
Asia Pacific Conformal Coatings Market Size, 2021 (USD Million)
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Asia Pacific accounted for a major market share in 2021. The region is likely to maintain its position during the forecast period owing to rising demand from its electronics-manufacturing sector. The majority of global consumption is concentrated in Asia, with China leading as a dominant consumer. The country has a robust electronics-manufacturing sector, thereby accounting for around 40% of the total global consumption in 2021. Additionally, most of the countries in the region are in their early phase of economic development with an enormous untapped market growth potential. The living standards and purchasing power of people in these developing countries have improved significantly over the past few years. As this trend continues, it is anticipated to surge in the demand for consumer electronics.
The demand for electric vehicles in North America has risen over the past few years. According to the International Energy Association, electric car sales in the U.S. surpassed the mark of half a million in 2021, doubling the share to reach 4.5% of total car sales. The amount of electronics found in a new conventional car has increased several folds over the past decade. The use of electronics in an electric or hybrid vehicle is much higher than in conventional internal combustion-based vehicles. The reliability of the electronics used in automobiles influences consumer decisions. Thus, automakers are employing innovative ways to protect fragile electronic components and pathways on a PCB without increasing the vehicle's weight. The product protects the sensitive electronic system from the harsh environment with minimal increase in weight relative to space-consuming solutions such as enclosures. Thus, growing demand from the automotive industry is anticipated to drive the market.
The European automotive sector is among the prominent contributors to its economic prosperity. The region's automotive sector employs around 13.8 million people, accounting for more than 6.0% of total EU employment. The region is home to several well-established global automakers with regionally based manufacturing facilities. According to the European Automobile Manufacturers' Association, as of April 2022, there are around 301 automobile assembly and engine production plants across Europe. The automobile industry is already pivoting to capitalize on the electrification wave. As the average electronic components per vehicle increases, the consumption of conformal coatings used in the automotive sector is anticipated to increase simultaneously.
The Latin America region is expected to develop as a manufacturing hub during the forecast period. The region's close proximity to countries, such as the U.S. and Canada, provides a logistical advantage to the local industries. As a result, various countries in the region have witnessed a rise in foreign investment during the last decade. As the manufacturing sector in the region expands, the demand for industrial electronics to support and sustain growth is also anticipated to rise. The coatings ensure the durability and long service life of industrial electronic equipment and systems. The expanding industrial sector in the region is anticipated to drive market growth.
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The market in Middle East & Africa is expected to witness substantial growth during the forecast period. Countries such as South Africa have a robust agro-processing industry, which includes food & beverages, textiles, clothing, leather & footwear, and wood & wood products. The food & beverages division is a prominent contributor to the country's manufacturing industry. As most of these industries are moving toward automation, the demand for electronic systems that include PCBs, sensors, and other electronic components is expected to rise during the forecast period. This factor will prompt an increase in demand that is critical in protecting these sensitive electronic components from various external agents, thus extending the service life.
Companies Deploy Strategic Planning to Strengthen their Market Share
A few major market players primarily dominate the market. The existing players have developed proprietary products, and they maintain a competitive edge over other players owing to their unique product offerings. Furthermore, the companies are continuously conducting R&D activities to develop better solutions to match the changing needs of the electronic industry.
The major manufacturers operating in this market are DOW, H.B. Fuller, Henkel AG & Company, and Shin-Etsu Chemical Co., among other players. Plant expansions and strategic mergers & acquisitions characterize the global market. The market's major businesses have been actively acquiring competitors to acquire better economies of scale. Simply put, scale makes it simpler for established companies to sustain their dominance, resulting in intense competition. Several other companies, such as Electrolube, Chase Corporation, Chemtronics, Dymax Corporation, Specialty Coating Systems, and M.G. Chemicals, are among other active participants in the market.
An Infographic Representation of Conformal Coatings Market
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The global conformal coatings market research report provides detailed market analysis and focuses on crucial aspects such as leading companies, products, and products. Also, it offers insights into key market trends and highlights vital industry developments. In addition to the abovementioned factors, the report encompasses various factors contributing to the market's growth in recent years. It further includes historical data & forecasts revenue growth at global, regional, and country levels, and analyzes the industry's latest market dynamics and opportunities.
Value (USD Million)
By Product, End-use Industry, and Region
Fortune Business Insights says that the global market size was USD 899.1 million in 2021 and is projected to reach USD 1,392.8 million by 2029.
In 2021, the Asia Pacific market size stood at USD 767.3 million.
Registering a CAGR of 5.8%, the market will exhibit steady growth during the forecast period (2022-2029).
The consumer electronics segment is expected to lead this market during the forecast period.
Rising demand from the consumer electronics industry is anticipated to drive market growth.
DOW, H.B. Fuller, Henkel AG & Company, and Shin-Etsu Chemical Co. are a few major players in the market.
Asia Pacific dominated the market in terms of share in 2021.
The rising adoption of the product in medical devices is expected to drive the market and create new market opportunities.
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