Encoder Market Expands at a CAGR of 7.83%

Introduction

In a motion control system, encoders convert motion into an electrical signal that can be interpreted by a control mechanism like a counter or PLC. The encoder's feedback signal can determine position, count, speed, or direction. Using this data, a control device can transmit a command for a particular task. Encoders, in their most basic form, are devices for sensing and providing feedback. Encoders are used in machines in all industrial sectors. Different technologies, such as mechanical, magnetic, resistive, and optical, are operated by encoders to produce signals. Encoders play a significant role in motion control applications. They can provide position, speed, and direction data to a controller or drive to increase the accuracy and dependability of a drive system. By incorporating the most recent communications and networking innovations, encoders keep up with technological advancements by giving engineers the resources they need to solve issues in various motion control applications.

Additionally, a significant trend in the global market is the development of intelligence within encoders, which is driving the use cases of encoders, which are already used in robotics, plotters, packing, conveying, automation, sorting, imaging, and filling, among other things. Encoders are also utilized in cut-to-length applications. The rising production of auto parts and the increase in cars on the road are the main factors fueling the market's expansion. Due to the rapid development in vehicle automation to enhance the customer experience, automakers use encoders more frequently in manufacturing cars. Encoders accomplish this by giving the automated guided vehicle controller real-time information on acceleration, speed, and rotational position. The increased use of sophisticated automation technology in industries like automotive and electronics is accelerating the sales of encoders.

Market Dynamics

Increased Deployment in Advanced Automotive Systems Drive the Demand for Encoders

The growth in auto sales and the production of auto parts are the main factors propelling the encoder market's expansion. In 2021, 80.14 million automobiles were expected to be produced globally, according to OICA. China, the USA, and Germany were the top three producers of cars and commercial vehicles in 2021. China was the world's largest producer of passenger cars in 2021, accounting for almost one-third of the total, with more than 26 million vehicles produced. Automakers are increasingly incorporating Bluetooth and other cellular technology into their vehicles to meet the growing demand from customers to stay connected while on the go. The automotive industry relies on various encoders to produce digital position and motion data for shaft rotations, so the sector's growth is anticipated to directly affect the demand for encoders. Off-highway vehicle sales and the demand for trustworthy speed and position sensing systems are expanding daily. As a result, the automotive industry has a rise in encoder demand.

Recently, there has been a sharp increase in demand for electric vehicles, particularly in the European region, as global environmental concerns grow. As a result of the lower emissions EVs produce, they are becoming more and more popular. The precise position measurement of the vehicle rotor is necessary for EV efficiency and performance, which is anticipated to drive the EV industry's demand for encoders throughout the projection period. Additionally, these modifications are inspiring manufacturers of encoders to produce advanced encoders. Automation of vehicles is developing quickly every day to enhance the user experience. Speech recognition, IC, integrated LED lighting, and video and image compatibility are features found in contemporary vehicles. Automakers use encoders, a critical part of automotive automation, to produce more vehicles. As a result, the market should grow faster.

Artificial Intelligence Creates Untapped Market Opportunities

Artificial intelligence is used to build computers that perform tasks more effectively than people, enabling them to work around the clock under challenging conditions. As machines become more adept, businesses use artificial intelligence in mobile robotics, unmanned aerial drones, virtual assistants, digital twins, speech and image recognition, machine learning, and other fields. Encoders also control and commutate the rotor's displacement at any time while using less energy. Since mobility drives the demand for battery-powered operations, future mobile robotics will place energy-efficient encoders. Thus, by utilizing capacitive technology, rotary encoders enhance mobile robots. Additionally, they can help programmers of various applications follow new efficiency standards, which will simplify their integration into mobile robots.

Regional Insights

Asia-Pacific will command the largest market share, expanding at a CAGR of 8.53% over the forecast period. The market is thriving due to rising industrialization and a demand for better manufacturing solutions. Asia-Pacific is a hub for international trade because it is home to critical industrial giants like Japan, China, and India. Increasing production capacity and business service agreements are additional factors promoting industry growth. Introducing new products has caused the encoders' market to expand due to increased competition. The Chinese government encourages the use of research and development in factory automation and technology, as well as investments in them, through programs like the Made in China 2025 plan. Because most automation equipment is imported from Germany and Japan, the "Made in China" project also aims to increase domestic production of automation hardware and equipment. Government initiatives in the automation sector will drive the market.

Europe will acquire a market share of USD 1,343 million, growing at a CAGR of 7.15% over the forecast period. Europe is a significant consumer and supporter of advanced technologies and is home to some of the most well-known tech hubs in the world. Robotics implementation by the region's numerous industries is rising, accelerating the market's growth. The government also launches several initiatives to speed up the encoders. For instance, the European Union's (EU) industrial strategy aims to promote the expansion and competitiveness of the region's manufacturing sector. Under this, the government carries out several trades, energy, and innovation initiatives. It is also anticipated that this will benefit regional encoder producers.

Key Highlights

• The global encoder market size was worth USD 2,479 million in 2021. It is expected to reach USD 4,531 million by 2030, growing at a CAGR of 7.83% during the forecast period (2022–2030).
• Type-wise, the global encoder market includes Rotary Encoder and Linear Encoder. The Rotary Encoder section is projected to advance at a CAGR of 7.8% and hold the largest market share over the forecast period.
• Technology-wise, the global encoder market includes Optical, Magnetic, Photoelectric, and Others. The Optical section is projected to advance at a CAGR of 7.71% and hold the largest market share over the forecast period.
• End-user-wise, the global encoder market includes Automotive, Electronics, Textile, Printing, Machinery, Industrial, Medical, and Others. The Industrial section is projected to advance at a CAGR of 7.21% and hold the largest market share over the forecast period.
• Region-wise, the global encoder market includes North America, Europe, Asia-Pacific, and the Rest of the World. APAC holds the leading market position.

Competitive Players

Competitive Players

• Omron Corporation
• Honeywell International
• Schneider Electric
• Rockwell Automation, Inc.
• Panasonic Corporation
• Baumer Group
• Renishaw PLC
• Dynapar Corporation (Fortive Corporation)
• FAULHABER Drive Systems

Recent Developments

Market News

• In 2022, Omron Corporation launched a new "G9KB" high voltage DC relay for large-capacity home electricity storage systems. Increasingly large household storage systems are protected from the direct current by G9KB. Additionally, G9KB contributes to promoting renewable energy by shrinking its goods.

Segmentation

Global Encoder Market: Segmentation

By type

• Rotary Encoder
• Linear Encoder

By Technology

• Optical
• Magnetic
• Photoelectric
• Others

By End-user

• Automotive
• Electronics
• Textile
• Printing Machinery
• Industrial
• Medical
• Others

By Regions

• North America
• Europe
• Asia-Pacific
• Rest of the World