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The industrial encoder market size is forecast to increase by USD 1.28 billion at a CAGR of 9.62% between 2023 and 2028. Market growth hinges on several factors, including the increasing demand for material handling systems driven by the need for efficient logistics operations. Additionally, the rising demand for encoders is fueled by their easy mountability, enhancing their usability across various applications. Furthermore, industries' increased adoption of advanced technology equipment contributes to market expansion as businesses seek to improve productivity and efficiency through automation and digitalization. These factors collectively drive the growth of the market, catering to the evolving needs of diverse industrial sectors. Our market report examines historic data from 2018-2022, besides analyzing the current and forecasted market scenario.
Furthermore, APAC is driven by attractive, high-quality, low-cost products. To cater to the widespread small and medium enterprises in the region, the regional market players are also expanding their research and development units to provide cost-effective yet best-in-class technology encoders to the region. This increases the threat of competition for international players. Additionally, FAULHABER GROUP company offers industrial encoders such as HEIDENHAIN angle encoders and rotary encoders. Fortive Corp. company offers industrial encoders such as incremental encoders with optical or magnetic measurement.
Market Forecast 2024-2028
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The market plays a crucial role in motion control and automation systems, providing precise position sensing for various machinery. Encoders are essential devices that convert mechanical motion into analog or digital signals, often employing coded output signals for accurate feedback on linear or rotary movement. They find applications across multiple mechanical systems such as web tensioning, linear measurement, and filling processes. Integrated with electric motors and closed-loop servo systems, encoders ensure efficient operation and precise control, aiding in troubleshooting and enhancing overall controller performance. Our researchers studied the market research and growth data for years, with 2023 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.
Industries across the world have become extremely competitive. Several market players, internationally well-established vendors, and new start-ups have made this competition stronger. Further innovation in technology resulted in the development of industrial encoders, which enabled end-users like aerospace and automotive industries to get real-time and accurate information about the exact positioning of any object. These encoders can be attached to any equipment in the end-user facilities and can calculate every movement of the device.
Besides, troubleshoot involves diagnosing and resolving issues with devices, such as coded output signal discrepancies, ensuring precise linear movement and accurate backstop gauging in closed-loop servo system, commonly used in aerospace, automation systems, machinery, robotics, and packaging industries to optimize motion control. Further, the introduction of IoT, machine learning (ML), cognitive automation, and artificial intelligence (AI) have further led to the development of technologically advanced equipment. Thus, such factors will propel market growth during the forecast period.
The IIoT in industries has enhanced communication among industries. They are connected with IIoT, which networks all pieces of industrial equipment with each other through cloud technology. These encoders help industries perform several activities precisely without keeping an eye on the different pieces of equipment. With the help of IIoT, the condition of the several encoders inside any facility can be easily known to the end-users.
Further, rotary encoders are vital sensors that are responsible for motion-control feedback in aerospace, industrial, robotic, energy, and automation applications. These have played a vital role in the evolution of wireless data transmission and communication in IIoT. They are responsible for the networking of products and for the collection or transmission of additional information. Thus, the growing adoption of IIoT in communicating industries is expected to increase the adoption, which in turn is anticipated to propel market growth during the forecast period.
Encoders are ideal for use in all types of environments, whether the environment is normal or harsh. However, the materials used make them extremely prone to corrosion as they are deployed in different humid and dust-related operations. For example, in the automotive industry, automobiles are washed with water, painting is done on the automobiles, and services are provided to the already manufactured automobiles. In such facilities, humidity and dust particles prevail on the shop floor and get attached to different equipment/objects. In this condition, the encoders can be affected due to corrosion.
Due to this, the optimality and precision in the processes cannot be achieved, the control over speed and position is lost, and the encoder requires frequent changes or servicing. As a result, the end-users end up wasting much money on the entire encoder replacement or on frequent services. The time taken to complete an operation is also greater, and operational excellence is achieved in such cases. Moreover, despite the introduction of the new industrial encoder, the contamination of encoders has been one of the major challenges for industry players.
The optical encoder segment will account for a major share of the market's growth during the forecast period.? The encoder is one of the important and widely used components in the automation industry, as it provides accurate position and speed measurement as well as feedback on a real-time basis to the end-users. It reduces the chances of recording a false reading and minimizes the machine error to a large extent. Optical encoders are being widely used across industries such as consumer electronics and automobiles due to the need for high-precision feedback for various functions such as conveying, motor feedback, registration mark timing, and X-Y positioning.
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The optical encoder segment was valued at USD 1.10 billion in 2018. Moreover, factors like the growing implementation of automation technologies across industries and the emergence of industry 4.0 and industrial Internet of Things (IIoT), increasing implementation of robotics, and advances in semiconductor packaging and assembly technologies are expected to increase the demand for the optical encoder in such application during the forecast period. Hence, the growing demand among industrial applications will drive the growth of the optical encoder segment of the market in focus during the forecast period.
Based on end-user, the market has been segmented into automotive, electronics, machine tools, and others. The automotive?segment will account for the largest share of this segment.? The automotive industry dominates the market share due to its extensive use in assembling automobiles. They ensure the precise positioning of vehicle parts during manufacturing processes, such as lifting, assembly, welding, and painting. They play a crucial role in minimizing wastage and ensuring quality control throughout the production cycle. As automotive facilities strive for efficiency and precision, the demand is expected to rise, driving market growth through the automotive segment during the forecast period.
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APAC is estimated to contribute 42% to the growth by 2028. Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. APAC countries like Japan, South Korea, and China are renowned for their innovative automotive manufacturing. They ensure precision and safety in material handling within automotive facilities. Additionally, the region's booming electronics sector, particularly in Singapore's semiconductor industry, drives demand for smart devices and equipment. With increasing investments in space exploration and IoT adoption across industries, APAC's industrial encoder market is poised for significant growth, surpassing other regions during the forecast period.
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Hans Turck GmbH and Co. KG, DR. JOHANNES HEIDENHAIN GmbH, ifm electronic gmbh, maxon motor AG, OMRON Corp., Pepperl and Fuchs SE, Pilz GmbH and Co. KG, Renishaw Plc, Rockwell Automation Inc., Sensata Technologies Inc., and SIKO GmbH
Technavio market forecast the an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.
The market analysis and report forecasts market growth analysis by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market encompasses a vast array of technologies vital for precision control in industrial settings. These include motion control systems, controllers, and sensor systems. Encoders like linear encoders and absolute encoders ensure accurate positioning, while high-precision encoders cater to specialized needs. They find applications in automotive testing equipment, medical equipment, and industrial automation, optimizing processes in large machinery. With advancements like smart encoders and wireless encoders, industries witness improved overall equipment effectiveness (OEE). These solutions, coupled with artificial intelligence-based systems, enhance operations across sectors like food & beverage, pharmaceutical, and chemical industries.
Further, the market is a crucial component in various sectors, including healthcare, electric vehicles, and the electric industry. Encoders ensure precision in display test equipment for technologies like LCD, OLED, and LED screens, monitoring brightness, pixel defects, and color temperature. They integrate with diagnostic tools and connectivity solutions, enabling efficient monitoring of temperature, vibration, and wear and tear in machines and industrial robots. Encoders also play pivotal roles in robotic surgery, dialysis, and physical therapy, contributing to oncological radiation treatment and laboratory analysis in the healthcare sector.
Market Scope |
|
Report Coverage |
Details |
Page number |
167 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 9.62% |
Market Growth 2024-2028 |
USD 1.28 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
9.12 |
Regional analysis |
APAC, North America, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 42% |
Key countries |
US, China, Japan, South Korea, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Baumer Holding AG, FAULHABER GROUP, Fortive Corp., Hans Turck GmbH and Co. KG, DR. JOHANNES HEIDENHAIN GmbH, ifm electronic gmbh, maxon motor AG, OMRON Corp., Pepperl and Fuchs SE, Pilz GmbH and Co. KG, Renishaw Plc, Rockwell Automation Inc., Sensata Technologies Inc., and SIKO GmbH |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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