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The optical encoder market share is expected to increase by USD 2.20 billion from 2021 to 2026, and the market's growth momentum will accelerate at a CAGR of 19.07%.
This optical encoder market research report provides valuable insights on the post COVID-19 impact on the market, which will help companies evaluate their business approaches. Furthermore, this report extensively covers optical encoder market segmentation by type (absolute encoder and incremental encoder), end-user (machine tools manufacturers, assembly equipment manufacturers, consumer electronics and semiconductor equipment manufacturers, healthcare equipment manufacturers, and others), and geography (APAC, Europe, North America, South America, and Middle East and Africa). The optical encoder market report also offers information on several market vendors, including Allied Motion Technologies Inc., Baumer Holding AG, Bourns Inc., Broadcom Inc., CODECHAMP SA, DR JOHANNES HEIDENHAIN GmbH, Fortive Corp., FRABA BV, Grayhill Inc., Gurley Precision Instruments Inc., HONEST SENSOR CORP., Honeywell International Inc., ifm electronic GmbH, Kempston Controls, MEGATRON Elektronik GmbH and Co. KG, Novanta Inc., OMRON Corp., Renishaw Plc, Rockwell Automation Inc., SENSATA TECHNOLOGIES HOLDING PLC, US Digital Corp., and Yuheng Optics Co. Ltd. among others.
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The growing demand for SMT equipment is notably driving the optical encoder market growth, although factors such as mechanical and environmental challenges may impede market growth. Our research analysts have studied the historical data and deduced the key market drivers and the COVID-19 pandemic impact on the optical encoder industry. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.
Key Optical Encoder Market Driver
One of the key factors driving the global optical encoder industry growth is the growing demand for SMT equipment. Owing to the growing complexity of electronic products, the demand for high-quality assurance in the SMT placement processes is rising, thereby driving the demand for optical encoders integrated into SMT equipment. Another important reason for the market growth is the increasing investments by several firms in acquiring SMT equipment. For instance, in July 2017, Mycronic received an order for several SMT equipment from an unnamed customer located in the US. It included two MY300DX pick-and-place machines and 12 SMD Towers, the firm's intelligent storage solution. The total value of the order was estimated at USD 2.13 million. Several new orders are being placed for SMT equipment to meet the increasing demand for electronic components, thereby driving the growth of the market.
Key Optical Encoder Market Trend
Increasing interest in using drones across numerous applications is one of the key optical encoder market trends that is expected to impact the industry positively in the forecast period. Drones are considered to be one of the most advanced devices in the field of aeronautics and show great potential in a number of possible applications. Drones are used to deliver lightweight packages, inspect powerlines and grids, and for science and research (for documentation purposes). LiDAR systems or laser detection and ranging (LADAR) systems are used to operate drones. The optical system uses the optical encoder to measure speed, distance, and partial atmospheric parameters, such as the radar systems in large flight systems. Motors in the drones are combined with high accuracy and high precision encoders to enable excellent performance. Such factors will further support the market growth in the coming years.
Key Optical Encoder Market Challenge
One of the key factors impeding the global optical encoder industry growth is the mechanical and environmental challenges. The materials used for making encoders are extremely prone to corrosion, as they are deployed in various vibration and shock-related operations. In automotive industries, operations such as washing and painting are carried out. In such facilities, humidity and dust particles prevail on the floor and get attached to different equipment or objects, including encoders. When the pulse duty-cycle separation becomes erratic, the speed of the process of the metal with an optical encoder also becomes erratic. Shock and vibration can easily cause serious problems with the optical disks inside the encoder. With external forces, the disks can crack or shatter. Such factors could limit the market growth in the coming years.
This optical encoder market analysis report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on the market growth. The actionable insights on the trends and challenges will help companies evaluate and develop growth strategies for 2022-2026.
Technavio categorizes the global optical encoder market as a part of the global information technology (IT) spending market. Our research report has extensively covered external factors influencing the parent market growth potential in the coming years, which will determine the levels of growth of the optical encoder market during the forecast period.
The report analyzes the market's competitive landscape and offers information on several market vendors, including:
This statistical study of the optical encoder market encompasses successful business strategies deployed by the key vendors. The optical encoder market is fragmented and the vendors are deploying growth strategies such as technological innovation to compete in the market.
To make the most of the opportunities and recover from post COVID-19 impact, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
The optical encoder market forecast report offers in-depth insights into key vendor profiles. The profiles include information on the production, sustainability, and prospects of the leading companies.
Our report provides extensive information on the value chain analysis for the optical encoder market, which vendors can leverage to gain a competitive advantage during the forecast period. The end-to-end understanding of the value chain is essential in profit margin optimization and evaluation of business strategies. The data available in our value chain analysis segment can help vendors drive costs and enhance customer services during the forecast period.
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57% of the market's growth will originate from APAC during the forecast period. China, Japan, and South Korea are the key markets for optical encoders in APAC. Market growth in this region will be faster than the growth of the market in other regions.
The presence of several electronic manufacturing services (EMS) firms such as Foxconn, Flextronics, and Murata Manufacturing and an increase in disposable income will facilitate the optical encoder market growth in APAC over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
COVID Impact and Recovery Analysis
The outbreak of COVID-19 in 2020 affected several industries in the region, including the end-user industry for optical encoders. The production plants for optical encoders across China, India, and Japan were shut down during the first quarter of 2020. However, since Q3 of 2021, the increase in vaccination and the relaxation of lockdown restrictions have increased the demand for optical encoders from end-user industries, this, in turn, is expected to positively impact the regional market's growth during the forecast period.
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The optical encoder market share growth by the absolute encoder segment will be significant during the forecast period. As these encoders have built-in reference data, they do not need additional expensive components for positioning applications. These encoders can provide the current position of an object even in the conditions of power failure or the machine is being switched off. Such factors will boost the demand for absolute encoders in the coming years.
This report provides an accurate prediction of the contribution of all the segments to the growth of the optical encoder market size and actionable market insights on post COVID-19 impact on each segment.
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Optical Encoder Market Scope |
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Report Coverage |
Details |
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Page number |
120 |
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Base year |
2021 |
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Forecast period |
2022-2026 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 19.07% |
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Market growth 2022-2026 |
$ 2.20 billion |
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Market structure |
Fragmented |
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YoY growth (%) |
13.87 |
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Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
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Performing market contribution |
APAC at 57% |
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Key consumer countries |
US, China, Japan, South Korea, and Germany |
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Competitive landscape |
Leading companies, Competitive strategies, Consumer engagement scope |
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Key companies profiled |
Allied Motion Technologies Inc., Baumer Holding AG, Bourns Inc., Broadcom Inc., CODECHAMP SA, DR JOHANNES HEIDENHAIN GmbH, Fortive Corp., FRABA BV, Grayhill Inc., Gurley Precision Instruments Inc., HONEST SENSOR CORP., Honeywell International Inc., ifm electronic GmbH, Kempston Controls, MEGATRON Elektronik GmbH and Co. KG, Novanta Inc., OMRON Corp., Renishaw Plc, Rockwell Automation Inc., SENSATA TECHNOLOGIES HOLDING PLC, US Digital Corp., and Yuheng Optics Co. Ltd. |
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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, Market condition analysis for forecast period |
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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. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Five Forces Analysis
5 Market Segmentation by Type
6 Market Segmentation by End-user
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Vendor Landscape
11 Vendor Analysis
12 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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