IDC's forecast report mentioned that from 2022 to 2027, the overall IT market size of China's manufacturing industry will grow from 801.29 billion to 1,718.99 billion yuan, with a five-year compound annual growth rate of 16.5%. Among them, as the proportion of standardized product delivery increases, the proportion of software will gradually increase from 20.1% to 22%.
Industrial software is the core of the digital factory, and the compound annual growth rate of core industrial software is 20%
IDC's forecast report mentioned that from 2022 to 2027, the overall IT market size of China's manufacturing industry will grow from 801.29 billion to 1,718.99 billion yuan, with a five-year compound annual growth rate of 16.5%. Among them, as the proportion of standardized product delivery increases, the proportion of software will gradually increase from 20.1% to 22%.
IDC predicts that the market size of China's core industrial software (including CAD, CAE, EDA, PLM, MES software, excluding consulting and implementation services) will grow from 27.36 billion yuan in 2023 to 57.96 billion yuan in 2027, with a compound annual growth rate of 20%.
A few years ago, the penetration rate of design and development in China's industrial software market was only 5%, and with the product update and market layout of Chinese manufacturers, the penetration rate of this market has reached between 12% and 15%. The penetration rate of the market will continue to grow in the future.
In addition to mergers and acquisitions, there are five major trends in the development of the industrial software market
Trend 1, MES product severity differentiation, market and industry resonance.
On the one hand, lightweight SaaS MES services for growing manufacturing enterprises can be delivered quickly and at low cost. On the other hand, for groups and complex manufacturing enterprises, heavyweight industry moms are also emerging; Third, the automobile, new energy, semiconductor industry is growing rapidly, and will maintain the same frequency resonance with the industry in the future.
Industrial software supports the positive research and development of "full stack self-research" and "soft and hard integration".
Due to the rational investment environment, enterprises to improve profit requirements, taking the automotive industry as an example, R & D end of industrial software in the past few years has a significant change, a car company from the release of the first car to the delivery of only three years, which was impossible to achieve in the past. Mature car companies have increased the launch process of new cars from the past 2-3 years to 18 months. There are three major trends in the whole R&D end: 1. Integration of design and simulation; 2. Integration of micro electronic design and macro physical simulation; 3, software life cycle, hardware life cycle integration.
Recently, Li Fengjun, chairman of the software branch of the China Association of Automobile Manufacturers, introduced that the current algorithm significantly shortens the research and development cycle of new cars, the development of new models in the past takes 36 months, and now almost every car company can be born in 18 to 24 months. He said that automotive software is mainly divided into embedded software and industrial software, which plays a very key role in the new four modernizations of Chinese automobiles.
Trend three, the global industrial software manufacturers mergers and acquisitions trend strengthened.
On January 16, 2024, EDA and the semiconductor IP giant Sixes Technology and the industrial software giant Ansys officially announced that the two sides have reached a definitive agreement on the acquisition of Ansys by Sixes Technology. Under the terms of the agreement, Ansys shareholders will receive $197.00 in cash and 0.3450 shares of Sunsys Common stock per share, representing a total acquisition value of approximately $35 billion based on the closing price of Sunsys common stock on December 21, 2023, and the transaction is expected to close in the first half of 2025.
IDC believes that this reflects the integration trend of micro electronics and macro simulation. Sassine Ghazi, global President and CEO of Invensys Technologies, said: "In the face of growing system complexity, mainstream trends such as artificial intelligence, surging demand for chips and software-defined systems require greater computing performance and efficiency. "The combination of our EDA solutions and Ansys simulation and analysis technologies will enable us to deliver a comprehensive, powerful and seamlessly integrated chip-to-system innovation paradigm that helps technology teams in all industries maximize their development capabilities."
Fourth, the industrial Internet market to return to rationality, profit first.
Last year, the difficulty of listing industrial Internet manufacturers increased sharply, and this year manufacturers began to rethink and adjust the business layout. IDC expects the industrial Internet platform and application solutions market to grow at a compound annual growth rate of 18.5%, as vendors shift from the pursuit of scale growth to the pursuit of profit.
Trend 5: Integration between IT/OT service providers restructures the industrial software ecosystem.
Mergers and acquisitions in the entire market are accelerating, and highly valued companies are accelerating downward annexation of the market. In the past, the big fish ate the small fish, and now the big fish ate the big fish, and even the big fish swallowed the big fish. In addition, China's IPO market has tightened, and acquisition opportunities have increased. If the leading manufacturers seize the opportunity, they can quickly increase market concentration through acquisitions.
