China’s PLC Market

While PLC products were first developed and applied in Europe as early as the 1930s, the PLC technology was first applied commercially in the power distribution sector in China in the 2000s. Notably, State Grid launched its pilot PLC-based AMR projects in 2008, setting off a rapid development of China’s PLC industry.

As of today, the PLC technology has been widely adopted as the dominant communications technology for the deployment of AMR systems, which are a key part of the smart grid infrastructure in China. AMR systems accounted for more than 90% of the use of PLC products in 2016 and have become, and are expected to continue to be, the main PLC application in China. The PLC industry in China has also seen an increasing penetration rate for other applications as the development of the PLC technology continues to mature. Among these are selected smart energy management applications involving the remote control and monitoring of various kinds of energy consumption or generation systems, including streetlight control, building energy management and photovoltaic power management applications.

China’s PLC market had grown rapidly during the period from 2010 to 2016. The total sales volume of PLC products in China grew at a CAGR of 20.6% from 32.1 million units in 2010 to 98.7 million units in 2016. The significant increase in sales of PLC products during this period was mainly driven by the massive procurement of AMR devices, in particular smart meters, by State Grid in connection with its continual deployment of AMR systems.

China’s PLC market will continue its growth at a CAGR of 9.2% during the period from 2017 to 2021, with total sales volume of PLC products increasing from 93.2 million units in 2017 to 132.6 million units in 2021.

China’s PLC market is expected to slow down its growth from 2017 to 2021 as compared to the period from 2010 to 2016, mainly affected by (i) the penetration rate of smart meters under State Grid’s first-round commercial deployment, which commenced back in 2010, has already reached approximately 80% as of the end of 2016 and is reaching saturation, and (ii) other non-AMR PLC applications in China are relatively at a development stage to reach a stage of stable growth.

The future growth of China’s PLC market is expected to continue to be driven by governmental support for the IC industry, increasing deployment of smart grids in China and continual advancement in the PLC technology. Key raw materials for PLC ICs are IC chipsets. The production volume of IC chipsets in China grew at a CAGR of 12.6% from 2010 to 2016, reaching 132.9 billion units in 2016, and the import volume of IC chipsets in China grew at a CAGR of 9.3% from 2010 to 2016, reaching 342.5 billion units in 2016.

As the demand for PLC ICs only accounts for a limited portion of the entire IC chipsets market in China, the supply of IC chipsets is expected to be sufficient for the growing production needs from PLC technology companies in China.