Global revenue from industrial Ethernet infrastructure components in 2017 is estimated to have hit $2.2 billion.
Following is information and insight from IHS Markit about the industrial Ethernet infrastructure components market.
Highlights
- Global revenue from industrial Ethernet infrastructure components in 2017 is estimated to have hit $2.2 billion.
- From 2016 to 2021, total industrial Ethernet infrastructure components revenue is forecast to grow at a compound annual growth rate (CAGR) of 19.3 percent.
- Improved global economic conditions and increased demand for connectivity with better data transfer rates are the primary reasons for this strong market growth.
Our analysis
The industrial communication networks shift from field buses to Ethernet, as well as industry 4.0 initiatives, have driven the surge in the market and will continue aiding growth in the future. The shift towards Ethernet has further accelerated, as Industry 4.0/industrial IoT (IIoT) solutions are maturing and becoming more widely used. Ethernet is the key technology to enable these solutions. IHS Markit has forecast the Ethernet market to have a 15.4% CAGR over the forecast period of 2016 to 2021, as Ethernet connected nodes grow from 28.8 million, and more than double, to 58.8 million by 2021. IHS Markit predicts that Ethernet technologies will outpace Fieldbus technologies on new connected nodes by 2020.
The market showed strong revenue growth in 2016, contrary to the expectations of many in the market. Year over year, Europe, Middle East and Africa (EMEA) increased by 15.3 percent in 2016, Asia-Pacific increased by 21.8 percent and the Americas grew by 19 percent. The growth in EMEA was slower than the other regions, partly due to higher oil prices that affected industrial growth in the two countries involved in oil exploration and production in the North Sea: The United Kingdom and Norway.
EMEA was the largest regional market for industrial Ethernet infrastructure components in 2016, with revenues of $782 million, which accounted for 42.4 percent of global revenue. The Americas market was the next largest, with total revenues of $595 million, which accounted for 32.2 percent of the market. The Asia Pacific market finished third, with total revenues of $469 million, which accounted for 25.4 percent of the market.
Revenue from managed switches, managed layer-2 switches and managed layer-3 switches are projected to grow roughly at a CAGR of 19 percent from 2016 to 2021, which is slightly higher than the projected 16.8 percent CAGR for unmanaged switches. The reason for this high growth rate for managed switches is the increased functionality these devices offer and the customer's inclination to adopt future-proof connectivity solutions. Among all the products within the scope of the IHS Markit study, IIoT gateways have the highest revenue CAGR of 58.6 percent, due to the growing trend of connecting the industrial network to the cloud. Growth rates for protocol converters, routers, wireless access points and connectors/cable sets for the forecasting period are 21.2 percent, 17.8 percent, 18 percent and 21 percent, respectively.
The automotive manufacturing and power transport and distribution sectors were the largest markets for industrial Ethernet infrastructure components in 2016, as they have been the early adopters of Ethernet technology. In fact, industrial Ethernet infrastructure components sales in automotive manufacturing sector make up more than 14 percent of all market revenue, with power transport and distribution comprising 7.2 percent. Among all the industries tracked in this report, industrial Ethernet infrastructure components for the robotics industry are forecast to be the fastest growing category, with a CAGR of 27.4 percent. It’s important to keep in mind the $27 million market for industrial Ethernet infrastructure components in the robotics industry is relatively small.
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Industrial Ethernet Infrastructure Components Annual Report
This report offers a detailed analysis of the world market for the main components used in the design and construction of industrial Ethernet networks. The products included in the analysis are protocol converters, IIoT gateways, unmanaged switches, layer-2 managed switches, layer-3 managed switches, routers, wireless access points and industrialized connectors/cables sets.