A new sectoral research report concludes that mainland China has passed the U.S. to become the world’s largest "sub-regional" market for PLC (programmable logic controllers) purchases, with estimated market value of $1.7 billion for 2018. The latest "PLCs Report" from IHS Markit | Technology, observed that China’s emergence follows a spike in PLC demand in 2017, but that “the dynamics of downstream industries that purchase PLCs changed dramatically," resulting in the shift in market strength.
The 2019 PLCs Report examines the global market for programmable logic controllers, and identifies five-year trends that will affect the market.
For example, the report offers that both sales and production of global automakers have continued to decline on a quarter-to-quarter basis, putting pressure on the PLC manufacturing market due to automotive’s significant influence in upstream and downstream manufacturing segments.
After peaking in 2017, highly cyclical sectors (e.g., semiconductors, electronics, electronics assembly) have been in recession during 2019.
The decline in demand also is seen in the Chinese robotics industry, which began to retract in sales and production starting in Q4 2018 — the first decline following almost 20 years of +20% annual growth. This reflects the weakness of downstream industries for robotics, including automotive, electronics, electronics assembly, and food-and-beverage. This may present an opportunity for the robotics market to further improve efficiencies, enhance the state of collaborative robotics technology, and adopt transformative technologies like artificial intelligence and machine vision.
The report also points to weakening demand for machine tools, driven by weakness in the downstream sectors. The Chinese machine-tool industry may undergo a reshuffling in 2019, with some local machine tool vendors struggle with losses, according to IHS Markit.
Political and economic factors also are pressuring the industrial automation market, with the U.S.-China trade impasse significantly weakening investor confidence and Chinese market growth forecasts.