The industrial control industry is greatly affected by the macroeconomic boom and is expected to recover in 2024

Industrial control systems are the brains of equipment and have been widely used in equipment manufacturing, printing, packaging, textile, semiconductor manufacturing and industrial robots. The A3120 industrial control market can be divided into project market and OEM market, which account for about half. The project-based market is greatly affected by the capital expenditure of the government and central enterprises. In 2023, the project-based market will maintain positive growth driven by the investment demand of electric power, automobile, mining, chemical industry and public utilities. The OEM market is dominated by machine tools, consumer electronics, semiconductors, new energy and robots, and most of the above industries have poor prosperity in 2023, resulting in negative growth. Looking forward to 2024, the macroeconomic further improvement and the recovery of consumer electronics and semiconductor industries, the industrial control industry is expected to recover.

Domestic breakthrough in the control layer is the most difficult, and domestic brands in the drive layer have occupied a large market

A3120

PLC is widely used in industrial controllers, including medium and large PLC (mainly used in the project-type market) and small PLC (mainly used in the OEM market), and the market space in 2023 is 87 and 7.4 billion yuan respectively. Medium and large PLC have high requirements for industry case accumulation and brand, and domestic breakthrough is difficult. Small PLC relatively low entry threshold, Huichuan technology and Xinjie Electric 2023 market share has reached 15% and 7%. Mainstream drive layer including frequency converter and servo, 2023 domestic general servo market is 21.3 billion yuan, down 4%, the current domestic brands have occupied a high share in the general servo market, 2022 Huichuan technology, Hechuan technology, Xinjie Electric share of 24.3%, 3.7%, 2.9%.

Under the policy encouragement and the sea strategy, the growth space of domestic industrial control enterprises will be expanded

On March 6, 2024, The State Council issued a policy of encouragement for the A3120 renewal of domestic equipment. The policy proposes to promote the upgrading and technological transformation of all kinds of production equipment and service equipment. The above policies are expected to boost the industrial control industry in 2024 and stimulate the investment demand of downstream industries. Domestic industrial control products are expected to open up new markets. Through years of competition with foreign capital, domestic industrial control enterprises have formed a strong product competitiveness, and the ability to provide solutions has been continuously enhanced. In emerging markets such as Southeast Asia and South America, the market concentration of foreign brands is still low, and domestic enterprises are expected to cut in. From the perspective of enterprises with early overseas layout such as Weichuang Electric and Megmet, overseas revenue has maintained a rapid growth trend, becoming an important driving force for the company’s performance.