APAC Industrial Communication Market Outlook to 2028

APAC Industrial Communication Market Overview

• In 2023, the APAC Industrial Communication Market was valued at USD 10.30 billion, driven by increasing automation in manufacturing, the rise of Industry 4.0, and the need for efficient communication networks in industrial environments. Industrial communication systems are crucial for connecting various devices and systems, enabling seamless data exchange and operational efficiency.
• Key players in the APAC industrial communication market include Siemens AG, Rockwell Automation, ABB Ltd., Schneider Electric, and Honeywell International. These companies are recognized for their robust technological capabilities and comprehensive product offerings.
• Tokyo, Shanghai, and Seoul are prominent cities in the APAC industrial communication market. Tokyo's dominance is attributed to Japan's advanced manufacturing sector and technological infrastructure. Shanghai's position is due to China's important investment in industrial automation and smart manufacturing.
• Siemens AG announced the launch of its new SCALANCE M industrial routers in 2023, designed to enhance connectivity and security in industrial communication networks. This move aligns with Siemens' strategy to offer advanced solutions for industrial automation and digitalization.

APAC Industrial Communication Market Segmentation

The APAC Industrial Communication Market can be segmented based on technology, industry and region:

• By Technology: The APAC industrial communication market is segmented by technology into Fieldbus, Industrial Ethernet, and Wireless Communication. In 2023, Fieldbus held the largest market share due to its extensive use in industrial control systems and automation. Fieldbus networks offer reliable and real-time communication, making them a preferred choice for various industrial applications.
• By Industry: The APAC industrial communication market is segmented by industry into Automotive, Energy & Power, and Oil & Gas.In 2023, the automotive industry dominated the market, driven by the need for efficient communication networks to support automation and smart manufacturing processes in automotive production. The industry's focus on precision, efficiency, and connectivity underpins its reliance on advanced industrial communication systems.
• By Region: The APAC industrial communication market is segmented by region into China, India, Japan, South Korea, and Others. China dominated the market in 2023 with substantial investments in industrial automation and smart manufacturing initiatives. The country's focus on enhancing its industrial capabilities through advanced communication technologies contributes to its leading position.

APAC Industrial Communication Market Competitive Landscape

• Schneider Electric: Schneider Electric introduced EcoStruxure Plant Lean Management, a solution that integrates industrial communication systems with IoT capabilities. This platform aims to enhance operational efficiency and facilitate real-time data analysis across industrial operations. The EcoStruxure platform is designed to collect and aggregate data from various sources, enabling users to develop key performance indicators (KPIs) and improve decision-making processes on the shop floor.
• Rockwell Automation: In early 2024, Rockwell Automation strategically acquired ASEM, a leading provider of digital automation technologies, to aggressively expand its industrial communication and automation solutions portfolio. This acquisition aligns with Rockwell Automation's vision to lead the digital transformation in industrial automation by integrating ASEM's cutting-edge technologies with its own robust suite of solutions.

APAC Industrial Communication Industry Analysis

Growth Drivers:

• Increasing Automation in Manufacturing: In 2024, the manufacturing sector in APAC continued its rapid adoption of automation technologies to enhance productivity and reduce operational costs. Countries like China, Japan, and South Korea are leading this trend, an IDC report predicts that 60% of APAC manufacturers will utilize automation to improve operational roles, leading to a 50% increase in worker efficiency. This surge in automation is driving the demand for robust industrial communication networks in the market.
• Adoption of Industry 4.0 Technologies: The integration of Industry 4.0 technologies is an important growth driver for the APAC industrial communication market. APAC countries, including China, Japan, and South Korea, have earmarked more than USD 1 trillion for their Industry 4.0 programs. These technologies, including IoT, AI, and machine learning, require advanced communication systems to facilitate seamless data flow and integration across various industrial processes, boosting the market's growth.
• Expansion of Industrial IoT (IIoT): The expansion of Industrial IoT (IIoT) is propelling the demand for reliable and secure industrial communication systems. By the end of 2024, the IIoT market in APAC is projected to grow remarkably with contributions from China, India, and Japan. The need for real-time monitoring, predictive maintenance, and efficient management of industrial operations is driving the adoption of IIoT, thereby increasing the demand for robust communication networks.

Challenges

• Regulatory and Security Concerns: Regulatory and security concerns pose challenges to the industrial communication market in APAC. Governments across the region are tightening regulations on data security and privacy, especially with the increasing prevalence of cyber threats. In 2024, the South Korean government reported an increase in cyber-attacks targeting industrial sectors, prompting stricter cybersecurity regulations. Compliance with these regulations can be complex and costly, impacting market growth.
• Technical and Operational Complexities: The technical and operational complexities of integrating new communication systems with existing industrial infrastructure present an important challenge. The majority of manufacturing firms experienced difficulties in integrating new communication technologies with their legacy systems. These complexities can lead to operational inefficiencies and increased downtime, hindering the market's expansion.

Government Initiatives:

• China's "Made in China 2025" Plan: The Chinese government's "Made in China 2025" plan continues to drive the growth of the industrial communication market. In 2024, the plan included an additional investment to support the development and deployment of advanced manufacturing technologies, including industrial communication systems. This initiative aims to enhance China's manufacturing capabilities and technological self-sufficiency, boosting the market.

• Japan's Society 5.0 Initiative: Japan's Society 5.0 initiative, which promotes the integration of cyberspace and physical space, is a key driver for the industrial communication market. In 2024, the Japanese government allocated substantial amount to support smart manufacturing and industrial automation projects under this initiative. The focus on creating super-smart societies through advanced communication technologies is propelling market growth.

APAC Industrial Communication Future Market Outlook

The APAC industrial communication market is predicted to grow remarkably in the forecasted period of 2023-2028, driven by the adoption of AI and machine learning in industrial communication systems, increased collaboration between industrial and tech firms, and the expansion of IIoT networks.

Future Market Trends:

• Increased Adoption of AI and Machine Learning: The market is driven by the increased adoption of AI and machine learning technologies. Over the next five years, substantial investments in these technologies are expected, enhancing predictive maintenance, real-time data analysis, and decision-making processes. China, in particular, is focusing on integrating AI into industrial communication systems to improve operational efficiency and innovation.

• Growth in IIoT Networks: The expansion of Industrial IoT (IIoT) networks will be a significant trend in the APAC industrial communication market. By 2028, advancements in sensor technology, cloud computing, and data analytics are expected to drive the growth of IIoT networks. Countries like India and Japan are anticipated to lead this growth, with substantial investments in IIoT infrastructure to support smart manufacturing and industrial automation.