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In 2012, the second phase of the State Grid's smart grid investment and construction entered a comprehensive development stage. Thanks to the national push for smart grid initiatives, China's power line communication (PLC) chip market experienced rapid growth, with sales increasing by 45.5% and revenue rising by 56.6%. Additionally, emerging applications such as IoT-based smart homes, intelligent security systems, and broadband networks contributed significantly to market expansion. The domestic PLC chip market became a key driver of growth in the industry.
The strong demand for smart meters has further fueled this market expansion. As one of the world’s leading manufacturers of electricity meters, China saw steady growth in its meter shipments over recent years. In 2012, the total output reached 110 million units, with more than half being smart meters. The State Grid accelerated procurement of smart meters, concentrators, and data collectors. In that year, the shipment of smart meter chips reached 53.339 million units, up 56.6% year-on-year, while the overall PLC chip market size hit 770 million yuan, reflecting a 45.5% increase. With the gradual adoption of IoT technologies in smart homes, security systems, and broadband networks, the demand for PLC chips is expected to continue growing rapidly.
A major technological shift in the smart meter industry is the rise of SoC (System on Chip) solutions. Earlier designs relied on multi-chip combinations, where components like microcontrollers, carrier chips, amplifiers, and memory were separately installed on the mainboard. However, with advancements in SoC technology, modern PLC chips now integrate multiple functions—such as MCU, low-noise amplifier, A/D and D/A converters, digital clock, tuner, and memory—into a single package. This not only reduces the chip’s size and power consumption but also lowers costs, making it the preferred direction for future smart meter development. Although most domestic chip solutions still rely on multi-chip configurations, companies like Neusoft have already started shipping large volumes of SoC-based chips, signaling a shift toward this more efficient design.
The domestic PLC chip market remains highly concentrated, with four major players—Qingdao Dingxin, Neusoft Carrier, Fuxing Xiaocheng, and Miia Microelectronics—holding over 92% of the market share. Globally, Broadcom (which acquired Atheros) dominates the PLC chip market. However, foreign competitors have struggled to gain traction in China due to high pricing and inadequate technical support. Domestic firms, on the other hand, have maintained their dominance through cost-effective solutions and superior customer service.
Looking ahead, the Chinese PLC chip market is projected to exceed 1 billion yuan in 2013, driven by continued smart grid development and broader IoT adoption. While the market will grow rapidly, the growth rate may slow slightly as the sector matures. In terms of application structure, power management remains the largest segment, though its share is expected to decrease from 85% to 78% in 2013 due to slower smart meter tender growth. Meanwhile, security monitoring applications are gaining traction, supported by the “Safe City†initiative. Smart home applications are gradually moving into the mid-range residential market, and their share is expected to rise slightly. Industrial applications show modest growth, while broadband network applications face challenges. Despite some efforts by China Unicom to promote electric broadband modems, voltage instability in the power grid has slowed adoption. Future improvements in grid stability may lead to modest growth, but competition from fiber-to-the-home networks will limit market expansion. Overall, the proportion of broadband applications in the PLC chip market is expected to decline slightly.