Asia to Become Largest PLC Market Worldwide

Summary

August 7, 2013 - While stagnation, debt crisis, an aging society, and engineering shortages in Europe are creating structural problems, emerging Asia will recover more quickly to become the largest PLC market from 2016 onwards. The current problems are mostly of a cyclical nature, and long-term indicators point nowhere but up. Still, the times of prolonged double-digit growth will not return. This development is being driven by demand in China and the emerging Asian market, which will continue to grow at above average rates. In addition to Japan; China, Korea, and Taiwan have now established themselves as part of the global machinery market. These markets will also shift towards more high-end automation in the forecast period, developing more sophisticated machinery for export. “Manufacturing Renaissance, Industry 4.0, and re-shoring are trends that describe the future return of manufacturing in developed markets. However, future development will prove whether this is wishful thinking or if manufacturing and automation will re-emerge in developed nations,” according to Analyst Florian Güldner, the principal author of ARC’s “PLC and PLC-based PAC Global Market Research Study.” Re-Shoring: Long-Term Potential for the PLC Market? Re-shoring describes the process by which manufacturing returns to developed nations, which had previously outsourced and off-shored manufacturing to countries with lower wages, such as Eastern Europe and emerging Asia. In some areas, ARC sees this trend bearing large potential, especially when it comes to industries that need to react quickly to changing consumer preferences. The re-shored industries will automate larger parts of production to counteract the wage-structure in developed countries. In the long run, we expect this to have a slight positive impact on market development. A Manufacturing Renaissance – Technical Requirements The increased degree of automation in re-shored markets will demand PLCs that support information-driven manufacturing, linking the plant floor to MES and ERP layers and – in some cases – directly to the consumer. In addition, PLCs need to handle large amounts of data, feeding them back to higher-level systems. The results are self-optimizing cyber-physical systems and modular plants and factories. PLCs are now integrating safety and cyber security, but in future will also need to integrated energy management, analytics, and other functions. Why a Manufacturing Renaissance? A manufacturing renaissance is driven by the need to react to consumer demand. The largest volume of consumers is still in Europe, Japan, and North America. However, the increasing wealth in emerging economies and the rising urban middle class lowers the incentives to shift manufacturing back as long as transportation costs and time are manageable. In ARC’s view, this development will further push the PLC to emerging Asia. About ARC Advisory Group: ARC Advisory Group is the leading market research and advisory firm for industry and infrastructure. Business and IT executives around the world depend on ARC for coverage of technology from automation and business systems to product and asset lifecycle management, supply chain management, logistics, operations management, controls and control elements. ARC is the “go-to” market research and technology analysis firm for their companies. ARC analysts have the industry knowledge and first-hand experience to help clients find the best answers.