Industrial Electronic Temperature Controller Market Shift to Asia-Pacific Continues | Automation.com

Industrial Electronic Temperature Controller Market Shift to Asia-Pacific Continues

Natick, Massachusetts - June 2, 2006 - A market study by Venture Development Corporation finds that the Asia-Pacific industrial electronic temperature controller market is not only the largest of the major regions, but is also the fastest growing. Current and forecast shipments of industrial electronic temperature controllers to markets in geographic regions (dollars in millions) are:

2005
Asia-Pacific: 369.3
Europe: 237.6
North America: 192.0
Latin America*: 24.4
Rest of World: 12.5
TOTAL: 835.8

Expected in 2010
Asia-Pacific: 435.4
Europe: 214.3
North America: 172.3
Latin America*: 30.8
Rest of World: 13.1
TOTAL: 865.9

CAGR
Asia-Pacific: 3.3%
Europe: -2.0%
North America: -2.1%
Latin America*: 4.8%
Rest of World: 0.9%
TOTAL: 0.7%

*Mexico, Central & South America

Growth in the worldwide market for industrial electronic controllers has been slowing in recent years as the implementation of temperature control loops are being instead incorporated into distributed control systems (DCSs), personal computers (PCs) and programmable logic controllers (PLCs). VDC found the worldwide market of industrial electronic temperature controllers grew 3.6% in 2003, 3.5% in 2004, and 2.5% in 2005. We project the worldwide market will grow only 1.2% in 2006, and forecast the compound annual growth rate (CAGR) through 2010 will be only 0.7%.

The European and North American markets have been and are expected to be the most severely impacted by this trend. Both these large regional markets are expected to decline through 2010. However, growth is still forecast for the Asia-Pacific market, and also the much smaller markets in Latin America and Rest of the World.

The emergence of China as a major manufacturing center and market will be a driving factor behind this growth. OEMs as well as many end-user industries are beginning to relocate to mainland China to take advantage of low-cost labor and materials. The recovery of Japan's economy also is pushing the region out of a stagnant period of growth. The shifting of manufacturing operations by OEMs and companies in major end-user industries to China, along with declining prices for temperature controllers, are the primary reasons for the declining European and North American market forecasts. Both of these markets are very mature, so that there is little room for growth of new industries or firms to offset the exiting OEMs and other manufacturers.

In addition, many industrial electronic temperature controller suppliers based in Europe and North America have indicated that if they haven't already they will soon be opening their own manufacturing operations in China. By manufacturing in China, suppliers are not only able to gain the competitive advantage of cheaper labor and materials, but they are also moving closer to the major growth markets.

The small Latin American market is expected to experience the highest rate of growth through 2010 (CAGR of 4.8%) as the region continues to automate during the emergence of many economies in the region. Growth in shipments to the Rest of the World is expected to be slow at a CAGR of 0.9%, due to a slower influx of capital investment.

ABOUT VDC
Venture Development Corporation (VDC) is an independent technology market research and strategy consulting firm that specializes in a number of industrial, embedded, component, retail automation, RFID, AIDC, datacom/telecom, and defense markets. VDC has been operating since 1971, when the firm was founded by graduates of the Harvard Business School and Massachusetts Institute of Technology. Today, we employ a talented collection of analysts and consultants who offer a rare combination of expertise in the market research process; experience in technology product and program management; and formal training in engineering and marketing. VDC's clients include thousands of the largest and fastest-growing tech suppliers in the world and the most successful investors participating in the markets we cover.
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