Expanding Applications and Growing Regions Boost PLC Market

The worldwide market for programmable logic controllers (PLC) is surging due to fast-growing regions and expanding applications outside of manufacturing. The market for PLCs is expected to grow at a compounded annual growth rate (CAGR) of 4.6 percent over the next five years in spite of declining prices. The market was more than $6 billion in 2003 and is forecast to reach more than $7.5 billion in 2008, according to a new ARC Advisory Group study.

“The term ‘PLC’ no longer stands only for logic control and programmability. Communications capabilities, large memories and fast CPUs have turned the PLC into a universal automation component that fits all applications. A new paradigm, the programmable automation controller [PAC], is evolving, which is set to change the face of industrial automation at the controller level,” according to senior analyst Himanshu Shah, [email protected], co-author of ARC’s “Programmable Logic Controller Worldwide Outlook” (www.arcweb.com/research/auto/plc-ww.asp ).

Nano-PLCs are finding new ways to address the relay replacement market, while micro-PLCs are riding on the recovery in the machine tool market. Small and large PLCs are moving swiftly toward conquering simple DCS and SCADA applications.

Users prefer PLC-based, application-specific solutions because the PLC is a standard almost-off-the-shelf, known-to-be-reliable automation component. Users generally have good access to skilled support personnel because a huge talent pool exists for PLC programming.

While PC-based controls, for a time, threatened the existence of the PLC, the threat has passed. PLCs today contain PC-based technologies to the extent that these technologies contribute to the PLC’s functionality.

China, Eastern Europe, Russia, India and Brazil are rapidly developed regions and now have populations that demand automobiles, processed food and beverages, infrastructure facilities and appliances. All industry sectors are growing in response to the domestic demands in these regions.

Parts of Eastern Europe are growing as rapidly as China. Many of the countries joined the European Union in April 2004; therefore, the prospects of easier trade signal a major opportunity for the PLC market.

PLCs have now become so much of a commodity that suppliers of PLCs often do not know the end use of the nano- and micro-PLCs that they sell through distributors. This market study identifies several applications where PLCs are used outside of discrete manufacturing.

The PLC market is mature and, while changes in market share are not dramatic, it is evident that larger suppliers have been gradually increasing their monopolization of this market. This market study outlines how the top seven suppliers increased their share of the market and improved their regional dominance.

— ARC Advisory Group, www.arcweb.com

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