Industrial Ethernet market size to exceed US$70bn by 2025

The rapidly growing adoption of Industrial IoT (IIoT) — predominantly among the manufacturing and automotive sectors — to improve the efficiency of production processes and supply chain is driving the growth of the Industrial Ethernet market. Supportive government initiatives and hefty investments to extensively convert traditional grids into smart grids are resulting in further proliferation of the market.

For instance, according to the US Department of Energy, the country has invested US$8 billion through the Smart Grid Investment Grant Programme between 2010 and 2015. The country has received federal financial assistance for up to 50% of project costs. The investments are anticipated to reach US$110 billion over the next decade. Large-scale adoption of Industrial Ethernet products, such as switches, gateways, connectors, processors and controllers for structuring industrial networks, is expected to boost the market growth over the forecast timeline. The advent of innovative technologies, such as big data analytics, coupled with the increasing demand for cloud-based solutions in several enterprises across various sectors is escalating the demand for data centres, resulting in Industrial Ethernet market growth.

The service segment is projected to exhibit the fastest growth between 2019 and 2025, reporting a CAGR of over 20% owing to the need for effective installation, testing and maintenance of the network infrastructure to ensure long-term stability. The software solution segment is estimated to grow at a significant CAGR over the forecast timeline owing to its capability to enable network management through the monitoring of Industrial Ethernet networks with a varying number of nodes.

The automotive and transport segment is expected to witness an accelerated growth in the Industrial Ethernet market throughout the forecast timeline owing to the increasing requirement of bandwidth in automobiles. The automobiles are currently transforming from hardware-driven machines to software-driven electric devices, resulting in a significant increase in complexity and weight of wiring harnesses. Consequently, OEMs are integrating more computer-based systems, connections and applications to ensure proper connectivity between systems, contributing to an exponential increase in the size of wiring harnesses, resulting in the third-highest heaviest and costliest component in cars. The complexity and cost of wiring can be significantly reduced by providing a single network for connecting all the systems via a central switch.

Gigabit Ethernet is projected to witness an extensive adoption throughout the forecast period for facilitating connections between various devices such as robots, sensors, PLCs and other industrial machines. It predominantly employs optical fibre connections and is expected to witness a large-scale adoption between 2019 and 2025.

Asia Pacific is growing at the highest CAGR in the Industrial Ethernet market due to the rapid growth of manufacturing automation applications in the region supported by Industry 4.0. The supportive government initiatives and policies for driving the adoption of industrial automation among the manufacturing and automotive industries are also estimated to have a significant impact on market growth over the forecast timeline.

The companies operating in the Industrial Ethernet market are aggressively focusing on developing sophisticated Ethernet switches for harsh environmental applications.

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