According to the latest data from MIR DATABANK, the trajectory of the Chinese automation market size in Q3 2026 remained virtually flat. However, a breakdown by segment reveals distinct trends: the OEM market grew by 6.7% year-on-year, while the project-based market declined by 3.4% year-on-year. This growth rate gap of approximately 10 percentage points is the most significant signal of this quarter. This article reviews the development of the Chinese automation market in Q3 2026 and forecasts full-year market trends to provide insights for industry participants.
01、Overall Automation Market Growth Rate Nearly Flat in Q3 2026
The latest data from MIR DATABANK indicates that the Chinese automation market size in Q3 2026 was approximately CNY 86 billion, representing a 0.1% increase compared to Q3 2025, with the year-on-year growth rate slowing down relative to the first two quarters.
China Industrial Automation Market Size and Growth Trend (Q1 2025–Q3 2026)
Data Source: MIR DATABANK
In terms of market structure, the incremental growth in the overall automation market was primarily concentrated in the OEM discrete manufacturing sector. In Q3, the OEM market continued its growth momentum from the previous two quarters, driven mainly by industries such as electronics, semiconductors, lithium batteries, industrial robots, and logistics.
The project-based market continued to decline. Industries such as petrochemicals, metallurgy, and chemical engineering still face overcapacity pressures, leading to slowed fixed asset investment growth and insufficient new project starts, which consequently reduced automation orders.
Looking back at the broader manufacturing sector, macroeconomic data and industry structural characteristics corroborate each other: The average production index of the Manufacturing PMI in Q3 was 50.7%, while the average new order index was 49.9%. In September, the PMI rebounded to 50.1%, returning above the boom-bust line. Production has returned to the expansion zone, but demand order recovery has lagged, and enterprises remain cautious about capacity expansion and new investments.
02、OEM Market Growth Significantly Outpaces Project-Based Market
The latest data from MIR DATABANK shows that the Chinese OEM automation market size in Q3 2026 was approximately CNY 32 billion, a year-on-year increase of 6.7% compared to Q3 2025.
Data Source: MIR DATABANK
By industry, the semiconductor, battery, industrial robot, and electronics sectors led in growth rates.
The semiconductor industry saw a year-on-year growth of approximately 30%, ranking first in growth speed. From July to September, domestic integrated circuit production increased by an average of around 20% year-on-year. AI demand drove capacity expansion for memory and logic chips, resulting in a noticeable increase in new equipment orders year-on-year. The third phase of the Big Fund totaled CNY 344 billion, with 70% allocated to front-end equipment and materials; funds have been gradually deployed.
The year-on-year growth rate of the lithium battery industry slowed compared to the first two quarters but remained above 20%. Industry investment from January to September grew by more than 20% year-on-year, and energy storage sales in September surged by over 100% year-on-year. However, since the second half of this year, approvals for new projects have become significantly stricter. National-level policies have been introduced to regulate the industry ecosystem, assess capacity utilization rates, and curb unhealthy competition. Regarding taxes and fees, starting in September, a 2% consumption tax was levied on lithium batteries, rising to 4% in 2027, and export tax rebates will be phased out to zero in 2027.
Growth in the electronics industry was primarily driven by capacity expansion in the AI supply chain: Construction of production lines for high-speed PCBs and optical module packaging boosted demand for process equipment such as drilling and mounting machines, thereby driving the automation product market. In contrast, demand in the traditional consumer electronics (3C) sector softened.
On the other hand, traditional OEM industries contracted. Packaging, food and beverage, printing, and pharmaceutical industries generally declined in Q3, reflecting weak domestic demand, insufficient new projects, and a concurrent drop in industry fixed asset investment.
03、Project-Based Market Under Pressure
The latest data from MIR DATABANK shows that the Chinese project-based automation market size in Q3 2026 was approximately CNY 54 billion, a year-on-year decline of 3.4% compared to Q3 2025.
Data Source: MIR DATABANK
Among sub-industries, the power sector grew by 9.0%, providing notable positive support: Concentrated deployment of high-energy-consumption projects such as data centers and AI computing centers drove investment in the grid and power generation side. Approval and construction of hydropower and thermal power plants accelerated. From January to September, combined new installed capacity for hydro, thermal, and nuclear power reached 81.44 GW, a year-on-year increase of 24.6%. Looking ahead, the national planned installed capacity target for pumped-storage hydropower by 2030 is 160 GW. Meanwhile, major projects are entering their procurement peak, with project reserves continuing to accumulate.
On the negative growth side, municipal and public facilities, chemical engineering, petrochemicals, and metallurgy all declined, primarily due to fewer new projects and a subsequent drop in procurement value. While retrofitting projects remain common across these industries, individual investment amounts are lower than those for new complete production lines, and the density of automation product configuration per unit line is lower, reducing corresponding demand.
04、Full-Year Market Expected to Achieve Positive Growth Amid Policy and External Influences
From a full-year perspective, MIR DATABANK's latest forecast predicts that the Chinese automation market will achieve positive growth in 2026, with a growth rate of approximately 1.6%. Positive growth is also expected to continue in 2027 and 2028. This prediction results from the combined effect of policy drivers and external environment factors: On the policy side, demand is shifting from "buying equipment" to "retrofitting production lines," while externally, higher barriers are simultaneously opening a window for domestic substitution.
China Industrial Automation Market Size Growth and Forecast (2022–2028)
Data Source: MIR DATABANK
Policy support is clear. All CNY 200 billion in "Two New" equipment renewal funds for 2026 have been fully disbursed, covering 22 areas and approximately 11,000 projects across three batches. Technical transformation bidding peaked in Q3, transitioning to delivery in Q4. Supporting evaluation systems and targets have also been established. Six departments including the Ministry of Industry and Information Technology (MIIT) released the "Action Plan for Tiered Cultivation of Smart Factories." As of the first half of 2026, over 500 excellence-level smart factories, 56,000 basic-level smart factories, and nearly 13,000 advanced-level smart factories had been built and cultivated. A target to increase the adoption rate of AI applications in manufacturing has also been proposed. These plans directly point to application demand for automation products.
The external environment forms pressure from the opposite direction. US Section 301 tariffs took effect on July 24; on July 28, the FCC added foreign-made advanced robots and networked inverters to its control list; on August 1, Japan changed approval for advanced packaging equipment such as die bonding and hybrid bonding to case-by-case review; on September 11, EU Cyber Resilience Act (CRA) reporting obligations came into force... Under the dual constraints of tariffs and regulations, the cost structure for Chinese manufacturers expanding overseas will be restructured, but domestic equipment is also seeing a new window for substitution in fields like semiconductors. Constraints and opportunities coexist, presenting a new landscape that OEM equipment and automation suppliers must navigate.
Therefore, it is projected that the overall automation market will maintain positive growth momentum in 2027–2028. On one hand, as the "15th Five-Year Plan" is gradually implemented, over 100 major projects will enter the centralized equipment procurement phase, driving demand for automation products. On the other hand, carbon peaking-related actions are expected to drive large-scale industrial new builds and technical transformation projects to concentrate their release before 2028, continuously stimulating automation order demand.
In Conclusion
The clearest message from Q3 data is that the structural improvement trend in the 2026 industrial automation market is evident, with the OEM sector performing significantly better than the project-based sector. The former achieved positive growth through semiconductors, lithium batteries, electronics, and industrial robots, while the latter remains in negative growth territory due to a lack of new projects.
Market trends for 2027–2028 will depend more heavily on the speed at which tenders for new construction projects convert into orders, and whether substantive improvements occur in domestic and international demand across industries. For automation vendors, staying aligned with high-growth industries, integrating AI capabilities into products and solutions, and accelerating technological upgrades will determine their position in the next round of competition.