Encoder Market To Generate $4,888 Million Revenue by 2030

The global encoder market size is expected to advance at a CAGR of 9.10% during 2022–2030, to reach USD 4,888 million by 2030. This can be ascribed to its increasing requirement in CNC machines.

Consumer electronics sales are growing at a good pace, due to the rising adoption of smart appliances for residential applications, such as door locks, thermostats, and home monitors. In addition, linear and rotary encoders, both customized and standard, are majorly used in electro-medical and laboratory instruments such as Gamma Knife, operating and examination tables, X-ray scanners, and many more.

Moreover, the rising novel production units of electronics, will, in turn, create opportunities for various key players in order to meet the demand and increase their production of such products.

Rising Demand for High-End Automation Drives the Demand

The usage of encoders is increasing among various applications with the rising adoption of automation. Thus, the requirement for automation by manufacturers across various industries has been observed as a key driver for the market, as encoders are widely utilized in automation to offer accurate direction and speed, in order to ensure the safe and smooth running of motors. Accuracy in tracking motor speed also ensures the performance of machines and optimum operations and is designed accordingly so as to prevent machine shutdown or motor burnout.

Furthermore, encoders aid in enhancing the overall equipment effectiveness (OEE) in automation by checking the energy and working conditions of machines. 24/7 connectivity offered by encoders to production lines is also an important need across various industries such as pharmaceutical, food & beverage, automotive, and chemical. As large manufacturing and mid-sized plants are using automation solutions rapidly, encoders are being adopted on a large scale for better utilization of assets, controlling the quality of end products, and minimization of errors.

APAC Is Fastest-Growing Market

The APAC market is expected to grow at the highest CAGR, of 10.1%, during the forecast period. This can be attributed to the growing industrialization, the increasing awareness and focus on the adoption of better solutions for manufacturing processes, and regional countries are known as hubs to large industries such as China, India, and Japan. The increasing service agreements with businesses and production facilities, and the introduction of novel products in the region are also fueling the industry growth.

In APAC, the Chinese market is the leader and is growing at a considerable rate, owing to the government's programs, including the Made in China 2025 plan, which is promoting the implementation of R&D in factory automation, expanding the domestic production of automation hardware and equipment in the country, incorporating advanced technologies in industries, and surging investments in this field.

In addition, increasing demand for robots is driving the regional market. For instance, according to the International Federation of Robotics (IFR), in 2021, shipments of industrial robots in China were around 310 thousand units. Additionally, in the same year, Japan installed around 64 thousand units, which was much less than the number in China.

The most-significant encoder market players are Omron Corporation, Honeywell International, Schneider Electric, Rockwell Automation Inc., Panasonic Holding Corporation, Alps Alpine Co. Ltd., Grayhill Inc., Dr. Johannes Heidenhain GmbH, Bourns Inc., and Elco Industrial Automation GmbH.