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The Smart Factory Market size is forecast to increase by USD 97.1 billion at a CAGR of 10.87% between 2023 and 2028. The market is witnessing significant growth driven by several key factors. There is a pressing need for simplification and optimization of complex manufacturing processes, prompting industries to adopt smart factory solutions. Moreover, shifts in the global labor force dynamics and the increasing trend toward automation are accelerating the adoption of smart manufacturing technologies. Additionally, the miniaturization of sensors is enabling more efficient and precise monitoring and control within smart factory environments, further fueling market expansion. This market research and growth report also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2018 to 2022.
Market Forecast 2024-2028
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The market is experiencing robust growth, driven by various key factors. Cloud technology plays a pivotal role in facilitating seamless connectivity and data management across factory operations, enhancing efficiency and productivity. Capital investments in advanced machinery and IT infrastructure are enabling manufacturers to modernize their production processes and adopt smart manufacturing practices. Integration of smart field devices, industrial robots, and communication technologies optimizes manufacturing workflows and enhances overall operational performance. Smart factory systems rely heavily on industrial sensors to optimize production processes, enhance efficiency, and ensure real-time monitoring and control. Additionally, the emergence of 5G technology promises to revolutionize factory connectivity and enable real-time data exchange for enhanced decision-making. However, with the increasing adoption of digital technologies comes the risk of cyberattacks, highlighting the importance of robust cybersecurity measures in smart factory implementations. Industries such as metal & mining, information technology, and automobiles are at the forefront of embracing smart factory solutions to drive innovation and competitiveness.
The market is witnessing exponential growth driven by innovations in deep learning, computer vision, and natural language processing (NLP). Context awareness and big data analytics enable seamless integration of SCADA systems and Industrial IoT (IIoT) in diverse industries like semiconductor & electronics, energy & power, pharmaceuticals, automotive, and heavy metals manufacturing. Capital investments in advanced machinery and IT infrastructure optimize operations, supported by smart field devices and industrial robots. Communication technologies, including 5G, enhance connectivity, while cyberattack mitigation is ensured through industrial sensors and Computerized Maintenance Management Systems (CMMS). Augmented reality and virtual reality further augment efficiency in manufacturing, mining, and IT sectors. Our researchers studied the data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market.
The global market is driven by the necessity to simplify intricate manufacturing processes. Industrial evolution has shifted focus towards maintaining plant assets, causing complexity in production due to customized product demands. The intricate relationship between production equipment, inventory, and support systems adds to the complexity.
Industrial automation, including SCADA, DCSs, and PLCs, effectively monitors processes, while SCADA systems gather data from PLCs, DCSs, and sensors. Industries strive for operational efficiency and asset maintenance to avert disruptions and revenue loss. These challenges are projected to propel the global market's growth in the foreseeable future. Hence, such factors are driving the market during the forecast period.
The global market is dominated by the Industrial Internet of Things (IIoT) trend. IIoT's growth enables the integration of smart machines in industries and services. This is fueled by the demand for smart devices, wireless tech, and cloud solutions, expanding smart machines' versatility. Major companies offer remote control options, using smart devices and Wi-Fi for flexible operation, allowing one operator to manage multiple machines.
IIoT aligns businesses with goals and KPIs through diverse smart machines. Its rise drives factories to interconnected systems. Companies transform facilities into smart factories, adapting equipment and flexible autonomous robots. User-friendly interfaces enhance offerings, as IIoT boosts demand for intelligent systems. Hence, such factors are driving the market during the forecast period.
The prominent hurdle for the global market is the apprehension over data privacy and security. Smart factory solutions enhance efficiency in industrial processes, yet their automation makes them susceptible to cyber threats. Cybersecurity remains a critical concern, particularly in sectors like oil and gas, power, and water, where data breaches and manipulation pose severe risks to critical infrastructure.
Attacks on one part of interconnected wireless systems can compromise the entire network, jeopardizing data integrity and privacy. Despite efforts by suppliers and end-users to bolster security, the evolving nature of cyber threats imperils smart solutions, potentially impeding market growth during the forecast period.
The component segment of the market is comprised of advanced technologies and systems essential for enabling intelligent and automated manufacturing processes. Deep learning, computer vision, and natural language processing (NLP) empower machines to understand and respond to complex tasks and instructions. Context awareness enhances the ability of systems to adapt and react to changing conditions in real-time. Big data analytics, facilitated by technologies like SCADA systems and Industrial IoT (IIoT), enable comprehensive data collection and analysis across various industries such as the semiconductor & electronics industry, energy & power industry, pharmaceuticals industry, automotive industry, Information technology industry, automobile industry, Heavy metals and machinery manufacturing industry, and food & beverage industry. These analytics provide valuable insights into production processes, performance metrics, and predictive maintenance, driving operational efficiency and quality improvements.
The industrial sensor segment will notably expand its market share in the forecast period. These sensors detect and measure physical objects and are integral to the IoT ecosystem. Smart sensors enhance wireless connectivity among devices through electronic integration. IoT (Internet of Things) gateway solutions establish flexible OS-based infrastructures, while network management software handles cloud and radio network analytics. Near-field communication (NFC) technology facilitates radio communication between smart devices.
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The industrial sensors segment was valued at ?USD 30.50 billion?in 2018 and continued to grow by 2022. Innovations in machine vision and safety sensors is seen over the years, along with powerful onboard computers, which have been used in autonomous robots to increase their efficiency by helping them to understand their operating environment better. The forecast period will see innovations in nanotechnologies owing to which will increase the further miniaturization of sensors, due to this leading to a reduction in the cost of hardware is seen. These factors will drive the demand for the segment and also the growth of the global market during the forecast period.
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North America is estimated to contribute 45% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period. Due to the emergence of the concept of Industry 4.0, the use of IoT (Internet of Things), cloud computing, and automation in the industrial sector, is the major driver of the market in North America. In North America, the demand for smart factory solutions from the oil and gas industry will increase owing to the starting of several new chemical and petrochemical projects in the region. Hence, such factors are driving the market in North America 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.
ABB Ltd.: The company offers smart-factories such as ABB Ability Smart Factory solutions for enhanced automation, control, and optimization of manufacturing processes.
Cisco Systems Inc.: The company offers smart-factories such as Cisco Connected Factory solutions for secure and scalable connectivity in industrial environments.
We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:
Technavio report provides 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 research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
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The market is experiencing exponential growth driven by advancements in technology such as deep learning, computer vision, and natural language processing (NLP). These innovations enable enhanced context awareness and efficient utilization of big data in various industries including the industrial IoT (IIoT), semiconductor & electronics industry, energy & power industry, Information technology industry, pharmaceuticals industry, metal & mining industry, automobile industry, and Heavy metals and machinery manufacturing industry. They leverage cutting-edge technologies to optimize processes in the food & beverage industry and ensure seamless data collection. With substantial capital investments in advanced machinery and IT infrastructure, these factories integrate smart field devices and utilize modern communication technologies like 5G technology. However, they must also contend with the threat of cyberattacks, necessitating robust computerized maintenance management systems (CMMS) for security.
The market is witnessing rapid evolution driven by technological innovations such as manufacturing execution systems (MES), augmented reality, and virtual reality. The market landscape depends on the Pressure sensors, Force sensors, Image sensors, Gas sensors, Industrial 3D printing components, Organizational design, Distribution activities, Strategic activities, Commercial activities, Risk mitigation, Unplanned downtime, Operational costs, Asset utilization, Investment returns, Process industry segment, Oil & gas industry, Energy efficiency, Product quality, Decision-making processes, Large-scale manufacturing, Offshore regions, IoT device, Employee safety, Digitalizing facilities, Process visibility, Lower operational costs. With the integration of machine learning and Artificial intelligence (AI), smart factories are revolutionizing the automotive industry and various sectors. Companies like Qualcomm are pioneering the implementation of the Internet of Things (IoT), while government initiatives emphasize compliance and standards adherence. Segments like discrete control systems and 3D printing are flourishing alongside industries such as aerospace & defense, leveraging networked devices and advanced production systems. Real-time data analytics enable self-optimizing equipment, enhancing overall organization and manufacturing methods for increased efficiency and competitiveness.
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Market Scope |
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Report Coverage |
Details |
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Page number |
183 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 10.87% |
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Market growth 2024-2028 |
USD 97.1 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
9.53 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 45% |
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Key countries |
US, China, UK, Japan, and Germany |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
ABB Ltd., Azbil Corp., Cisco Systems Inc., Dassault Systemes SE, Emerson Electric Co., Endress Hauser Group Services AG, FANUC Corp., FUJI Corp., General Electric Co., Honeywell International Inc., Johnson Controls International Plc., Microsoft Corp., Mitsubishi Electric Corp., Oracle Corp., Robert Bosch GmbH, Rockwell Automation Inc., SAP SE, Schneider Electric SE, Siemens AG, and Yokogawa Electric Corp. |
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Market dynamics |
Parent market analysis, market growth and trends, market report, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, 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 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Solution
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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