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%.

XVC768115 3BHB7211R115 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.

XVC768115 3BHB7211R115

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.

XVC768115 3BHB7211R115 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.