China’s Industrial Ethernet Sector Set for Growth

May 6, 2011
Growth in Key Sectors, Particularly Power and Energy, Will Help China See About 20% Growth in 2010 for Ethernet Infrastructure Components

As the power and energy industries build in China, the market for Ethernet infrastructure components to serve those industries is booming as well. Nearly $120 million of industrial Ethernet infrastructure components were sold in China in 2009, and that number is expected to grow at an estimated 20% for 2010, according to a new report from IMS Research.

"The Chinese market is still far from saturation compared with the industrialized world as a whole," said analyst Alex Hong. "With many new plants and projects started recently, the demand for Ethernet components will continue to grow explosively."

More than 30% of the Ethernet component revenues in China are coming from the power and energy industries, whose growth has been boosted by Chinese government policy, such as the Strong and Smart Grid Plan and strong support for renewable energy development. 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.

Although the oil and gas industry still has a relatively small user base for industrial Ethernet components, IMS Research considers the potential market growth in this sector very promising. However, certification is important in these applications, analysts say, which could be an obstacle for Ethernet vendors.