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Industrial Ethernet set to increase strongly in China’s booming sectors says IMS

04 May 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 new report from IMS Research, nearly $120 million worth of industrial Ethernet infrastructure components were sold in China in 2009, growing with an estimated 20% more in 2010. IMS analyst Alex Hong says the demand for Ethernet components will continue to grow "explosively".

The vertical industry sector is important when projecting growth prospects. More than 30% of the revenues in China are coming from the power & 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.
Without doubt, the success of vendors of these components will 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 & gas could also be an 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.

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