Increasing applications, expanding regional use fueling PLC market

Dedham, MA - The worldwide market for programmable logic controllers (PLC) is surging due to accelerating regional use and increasing applications beyond manufacturing, according to new research by ARC Advisory Group. Despite declining prices, the market for PLCs is expected to grow at a 4.6% compounded annual growth rate (CAGR) during the next five years from more than $6 billion in 2003 to more than $7.5 billion in 2008, states ARC’s “Programmable Logic Controller Worldwide Outlook.”

“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,” says Himanshu Shah, ARC’s senior analyst and co-author of the study.

Growth varies by PLC type
ARC reports that 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 towards conquering simple DCS and SCADA applications.
The survey’s respondents add that users prefer PLC-based, application-specific solutions because the PLC is a standard, almost-off-the-shelf, known-to-be-reliable automation component. Users also generally have a good access to skilled support personnel because a huge talent pool exists for PLC programming.

PC-based threat ebbs
While PC-based controls had threatened the existence of the PLC, they study found that this threat apparently has passed. PLCs presently include many PC-based technologies, which contribute to the PLC’s functionality.

High-growth regions
China, Eastern Europe and Russia, India and Brazil are rapidly developed regions with populations that are demanding automobiles, processed food and beverages, infrastructure facilities, and appliances. All industrial sectors are growing in response to the domestic demands in these regions.
In fact, parts of Eastern Europe are growing as rapidly as China. With many of the countries having joined the European Union in April 2004, the prospects of easier trade signal a major opportunity for the PLC market.

Beyond discrete manufacturing
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. ARC adds that its study also outlines how the top seven suppliers increased their share of the market and improved their regional dominance.

Control Engineering Daily News Desk
Jim Montague, news editor
jmontague@reedbusiness.com

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