The health of the PLC market used to an important factor in the growth of the I/O market, as PLC I/O modules are the largest part. However, in 2013, although the PLC market continued to drop, the I/O market grew. On the one hand, this growth came mostly from others type of I/Os, like DCS I/Os and PC-based I/Os, which mainly serve stable or faster growing industries. In contrast, the discrete industries that PLC I/Os mainly serve are more vulnerable to market fluctuations. On the other hand, considering that PLC market continued to drop in 2013 while that for PLC I/Os grew, although people are reluctant to build new control systems in uncertain times, the needs for expansion, upgrade, and maintenance cannot be restrained forever as they are essential to keep the existing systems functional or may even improve them.
Though discrete industry hasn’t been doing well, the automotive industry, one of the largest discrete industries for I/O modules has kept providing business opportunities to I/O suppliers. Highly automated and supported by stable vehicle demand, the automotive industry has been important for industrial automation suppliers. However, it is likely that opportunities from this industry will slow down. Investment on building new capacity in automotive industry has been strong in recent years, especially in emerging regions that are considered to have low labor costs, favorable policies, and great market potential. But investment has been so strong that the existing, in-planning, and in-construction production capacity has left less potential for further expansion and new construction. With also a stagnant economic situation, market demand for vehicles is not likely to thrive. It is expected that, in the future, the need for I/O modules from the automotive industry will mainly be to serve the installed production base.
Comparatively stable, process industries have been an important factor to offset the weaker growth of the discrete industries and to make the total I/O market grow. Of the process industries, oil and gas has been no doubt an important sector to drive growth, not only because of its stable downstream needs, but also because of exploitation of unconventional sources. The unconventional boom has led to many new construction projects in oil and gas; and has also helped growth in associated industries like refining, petrochemicals and chemicals, as now they have cheaper and handier feedstock and they may also need to improve their processes for unconventional oil and gas. All of these factors have however mainly applied to North America. The recent price slump of crude oil, which reflects a change in the supply-demand balance, puts at risk the strong investment on oil and gas. If oil supply grows faster than demand, the oil price may remain at a relatively low level, which will somewhat affect investment.
Like the oil market, while the demand is cooling down, it is even more critical for I/O suppliers to keep or even grow their market share. A stagnant market forces both suppliers and customers to pay even more attention to cost saving, which will accelerate the evolution of I/O products. In order to handle different types of signals, different applications, and different networks, there have been various versions of I/O modules, even provided by a single supplier. This certainly satisfies various needs, but meanwhile makes it more difficult to handle installation, maintenance, and spares management. Recently released I/O modules increasingly possess features of overall cost saving. For example, universal I/O modules, with I/O ports supporting various types of signals, have been released not only by PLC I/O suppliers, but recently have become a trend for DCS I/O suppliers. It helps end-users to reduce costs like wiring, simplifying design, installation, maintenance, and spares management. Some companies have also been working on integrating products from design to manufacture in unified platforms. Therefore they can offer fewer choices to satisfy more customer needs, which in turn help customers simplifying work using these modules, as well as help the supplier reduce costs from design to manufacture. However, this does not mean that every supplier is trying to offer one module for all. Many suppliers have their targeted industries; and, using their industry expertise, they are also including in their I/O modules features favored by these industries, if not widely favored by the general market, This is being done not only by the specialist suppliers, but also some system suppliers have included this into their strategies.
