Industrial Ethernet is increasing strongly in China’s booming sectors

IMS Research report indicates that industrial Ethernet growth in China depends on strength of various vertical sectors. The market grew 20%, 2009 to 2010, IMS said.
May 27, 2011

The market for Ethernet infrastructure components in Chinese industry is set to grow strongly, but the opportunity will vary with the strength of the vertical sector.

According to a newly published report, “The Chinese market for industrial Networking and Ethernet” from IMS Research, nearly $120 million of industrial Ethernet infrastructure components were sold in China in 2009 and growing with estimated 20 percent more in 2010. “The Chinese market is still far from saturation compared with the industrialized world as a whole," comments analyst Alex Hong. “With many new plants and projects started recently, the demand for Ethernet components will continue to grow explosively.”

The vertical industry sector is important when projecting growth prospects. More than 30 percent of the revenues in China are coming from the power and energy industries. Chinese Government policy, such as the Strong and Smart Grid Plan and strong support for renewable energy development, helps rapid growth in this industry sector. Transport and traffic is also an important vertical sector, the stimulation plan for infrastructure construction still having an effect on sales of industrial Ethernet components.

The success of vendors of these components will reportedly depend on the sectors they best serve. Vendors with a focus in electric power generation and transmission or in transportation will win large revenues, if they keep in mind that the Chinese market, as always, is very price-conscious.

Oil and gas could also be an apparent interesting sector in the future. Although it is considered to be virgin territory for industrial Ethernet components in China, with a relatively small user base, potential market growth is very promising. However, certification is important in these applications, which may prove an obstacle for the Ethernet vendors in this market.

– Edited by Chris Vavra, Control Engineering,