PLC (Programmable Logic Controller) is a core component of industrial automation, and the trend of localization has become an important topic in China’s manufacturing industry in recent years. With technological advancements and industrial upgrades, China has made significant progress in the PLC field. Firstly, domestic manufacturers have gradually reduced their reliance on foreign technology in hardware design and software programming through independent research and innovation, improving the reliability and performance of their products. Secondly, domestic PLCs have a clear cost advantage, which is particularly attractive to small and medium-sized enterprises as they can achieve automation upgrades at a lower cost. Furthermore, government policy support is also driving the development of domestic PLCs, such as subsidies and R&D funding that encourage companies to adopt domestic equipment.
According to market research data from gongkong®, the market share of domestic PLC brands has shown a continuous upward trend over the five years from 2018 to 2022, reaching 17.7% in 2022. This indicates that domestic PLC brands may have made significant progress in product quality, cost-effectiveness, technological innovation, and customer service, thereby enhancing their competitiveness and attractiveness in both domestic and international markets. Additionally, this growth may also benefit from national policy support and the promotion of manufacturing automation.
Source: gongkong® Market Research Data
1. Market Performance of Domestic PLC Enterprises in 2023
In the first half of 2023, major companies in the Chinese PLC industry—Holley Technology, Autel Intelligent Technology, Inovance Technology, and Zhongkong Technology—achieved significant accomplishments in advancing the localization process. The financial performance of these companies in the first half of the year not only demonstrates the firm steps of the Chinese PLC industry towards localization but also reflects the growing demand and confidence in domestic PLC products.
• Holley Technology: Significant growth in revenue and profit, increasing by 12.21% and 58.57% respectively, showcasing competitiveness and technological innovation in the domestic market.
• Inovance Technology: With a 19.76% increase in operating revenue and a 5.17% increase in net profit, proving steady development and market expansion capability under the push for localization.
• Zhongkong Technology: With a 36.54% increase in operating revenue and a 62.88% increase in net profit, demonstrating the competitiveness and market recognition of domestic PLC products in the high-end manufacturing sector.
• Autel Intelligent Technology: Rapid growth in revenue and profit is expected, further reflecting the competitive advantage brought by the positioning of Autel Intelligent Technology in the domestic market.
Overall, these data show significant progress in independent research and innovation within the Chinese PLC industry, highlighting the increasingly competitive and influential position of domestic PLC products in both domestic and international markets. Although some enterprises face challenges, the overall outlook for the Chinese PLC industry in the first half of 2023 shows a healthy and positive growth trend, indicating potential and future development directions in the global high-end manufacturing market.
2. Policy Environment and Localization Strategies for Domestic PLC Components
The policy environment for the localization of domestic PLC components in China in 2023 has received significant government support. The Ministry of Industry and Information Technology’s “14th Five-Year Plan for the Development of Software and Information Technology Services” explicitly emphasizes support for the PLC industry, especially in joint efforts for low-latency, high-reliability, and low-energy-consumption software products for industrial control systems. Meanwhile, domestic PLC companies are leveraging localization advantages, high cost-effectiveness, and quick after-sales service response to strengthen their competitiveness in the small PLC market and gradually penetrate into the medium and large PLC markets. The enhancement of cybersecurity and industrial control security requirements is also driving the process of domestic substitution.
In the market, although the domestic PLC market is currently mainly dominated by foreign companies, domestic small PLCs have gradually improved their competitiveness in the mid-to-low-end industrial automation market due to their product cost-effectiveness and rapid customer demand response. The increasing importance of self-controllable technology and the challenges related to the supply chain, pricing, and security urgently need to address the localization of industrial computing equipment, especially in high-end industrial computing devices. Moreover, policy support for the development of industrial software brings new opportunities for the PLC industry, with expectations to significantly enhance the technological level and market competitiveness of industrial software by 2025.
3. Demand for Domestic PLCs from Key Industries: Potential Reasons Analysis
According to trend research from gongkong®, the demand for PLC localization in China encompasses several key industries. These industries include aerospace, military industry, water conservancy, and electricity, with significant applications in sectors such as batteries, metallurgy, and logistics. Additionally, small PLCs are mainly applied in industries like semiconductors, textiles, and packaging.
The main reasons for the demand for localization include ensuring the security of critical infrastructure and national defense systems, reducing reliance on foreign technology, and enhancing the independent innovation capability and competitiveness of domestic industries. Localization is particularly important in key fields such as aerospace, military industry, water conservancy, and nuclear power, as these areas are crucial for national security and development, and reliance on imported products may pose security risks and supply chain instability. In other sectors, such as batteries, metallurgy, logistics, and semiconductors, localization helps to improve the overall competitiveness and technological level of domestic manufacturing.
4. Future Outlook
Factors Favoring Domestic PLCs Amid Global Supply Chain Changes
Currently, the Chinese PLC market is facing significant development opportunities and challenges. With changes in the global supply and demand market, such as chip shortages and rising raw material prices, the global PLC market price is trending upwards. This trend not only affects the market price structure but also prompts domestic enterprises to accelerate the process of PLC localization to address the shortage of high-end product supply.
Source: gongkong® Market Research Data
For domestic PLCs, the future development prospects are promising, mainly benefiting from several factors: the gap in product quality with foreign brands is narrowing, and the current economic situation is increasing the demand for cost control among downstream enterprises, leading to replacement opportunities. According to gongkong® market research data, both domestic and foreign brands have raised prices since 2020, but the increase for domestic brands has been a maximum of 15%, while foreign brands have varied increases, floating around 20-40%.
Additionally, the complexity of the international situation may lead to restrictions on the entry of foreign brands. Moreover, the rapid response of domestic brands to customer needs and the cost and supply flexibility advantages brought by component localization will significantly enhance the competitiveness of the domestic PLC market.
5. Focus on Autel Intelligent Technology: The Rise of Leading Domestic PLC Manufacturers
As a typical representative of domestic large PLCs, Autel Intelligent Technology shows significant advantages in market positioning, product diversity, localization process, and technological innovation. The PLC products developed independently by Autel Intelligent Technology cover a full range of sizes and have complete independent intellectual property rights, breaking the monopoly of imported controllers in multiple industries and successfully achieving domestic substitution. This not only enhances control over the domestic supply chain but also aligns with national policy directions, strengthening market competitiveness.In terms of technological innovation, Autel Intelligent Technology has demonstrated strong R&D capabilities, integrating emerging technologies such as information security, trusted computing, IoT, edge computing, and industrial internet to develop a series of more competitive innovative products to maintain its leading position in the industry.
In terms of market strategy, Autel Intelligent Technology has a clear market strategic plan. Horizontally, as a PLC manufacturer, Autel Intelligent Technology actively lays out agents and intermediaries, which is more conducive to rapid market expansion, promoting stable development and multi-point development of the market. Vertically, from the customer’s perspective, Autel Intelligent Technology focuses not only on project-based markets but also on the OEM market; at the same time, it actively lays out in the industry, keeping up with hotspots, continuously developing new industries while maintaining traditional advantageous industries, such as new energy, metallurgy, lithium batteries, and subways.
In summary, Autel Intelligent Technology occupies an important position in the domestic PLC market due to its advantages in product diversity, localization, technological innovation, market responsiveness, and cost-effectiveness. Through the development of self-controllable technology, it has formed a unique competitive advantage in the domestic PLC market, which not only aligns with national strategy but also lays a solid foundation for the company’s long-term development.
