Automated Optical Inspection Market

Market Overview

The global automated optical inspection market size was valued at USD 1.0 billion in 2023 and is projected to reach a value of USD 5.2 billion by 2032, registering a CAGR of 19.7% during the forecast period (2024-2032). Automated Optical Inspection Market growth is driven by rising demand for AOI systems to inspect IC substrates.

Automated Optical Inspection (AOI) is a production system that automatically inspects and analyzes items for faults, errors, or anomalies. It uses high-resolution cameras, lighting systems, and powerful image-processing algorithms to detect and identify flaws in produced components, assemblies, and printed circuit boards (PCBs). 

One of the primary drivers of growth in the automated optical inspection market is the high demand for consumer electronic devices. Furthermore, the automation of electronics manufacturing facilities drives the development of the automated optical inspection market. Moreover, the emergence of surface mount technology creates opportunities for market expansion. Given these considerations, the automated optical inspection market is expected to increase exponentially. 

Additionally, the emergence of SMART technology will provide attractive growth possibilities for the market over the forecast period. However, the sophisticated infrastructure necessary to manage enormous data slows industry growth. Other factors contributing to market expansion include increased demand for automated optical inspection systems in automotive electronics and printed circuit board shrinking. Manual inspection is no longer a viable alternative due to the increasing complexity of printed circuit boards, increasing automated optical inspection market share. 

Highlights

• 2D AOI generates the highest revenue share by type.
• Inline influenced the market by technology.
• IT and telecom dominate the industry market.

Market Dynamics

Global Automated Optical Inspection Market Drivers

Rising Demand for High-Quality Products

The growing customer demand for high-quality products in various industries is a significant driver of the development of Automated Optical Inspection (AOI) technologies. In the electronics manufacturing business, where miniaturization and complexity are prevalent, printed circuit board (PCB) quality is critical. AOI systems are widely used to inspect PCBs for flaws like soldering, missing components, and misalignment. For example, Delvitech is announcing and demonstrating a new generation of Automated Optical Inspection systems for electronic and mechanical manufacturing. By implementing AOI, the company could significantly reduce the number of defective products that reach the end of the production line, resulting in higher product quality and customer satisfaction.

Moreover, market expansion is driven by the increasing demand for smartphones, televisions, and household appliances and rising disposable incomes in emerging economies. Global smartphone shipments in 2023 totaled 1.14 billion units, representing a 4% decrease from 2022. However, the market increased by 8% year on year in the fourth quarter of 2023, reaching 319.2 million units. 

Furthermore, Saki Corporation, an inventor of automated optical and X-ray inspection equipment, has announced that DENSO Corporation has officially approved Saki's next-generation 3D Automated Optical Inspection System (3D-AOI). The new 3Di-LS2-CASE maintains the industry's best inspection speed and accuracy, thanks to Saki's unique, very rigid gantry structure, and now includes AI-based inspection automation features. This highlights AOI systems' increasing use and importance in assuring product quality and reliability across various industries. 

Global Automated Optical Inspection Market Restraints

High Investment Cost

One of the biggest impediments to adopting AOI systems is the significant initial investment to purchase and implement the technology. AOI systems require sophisticated hardware, software, and infrastructure, which can be expensive for small and medium-sized businesses (SMEs) or those with tight budgets. The cost of an automated optical inspection (AOI) system varies according to the hardware, software, and custom implementation services. 

For example, a mid-sized electronics manufacturer looking to implement AOI technology across its production lines may face initial investment costs ranging from tens to hundreds of thousands of dollars, depending on operation size, manufacturing complexity, and desired level of automation and functionality. These expenditures include acquiring AOI equipment, software licenses, staff training programs, and any changes to existing facilities or procedures required to suit the new technology. 

Additionally, AOI systems typically begin around USD 15,000 in VCTA but can cost up to USD 200,000 or more depending on features. Keyence and Cognex AOI systems can cost at least USD 20,000 per camera, with an extra USD 10,000 to USD 15,000 yearly for service and reprogramming. While the exact split of initial investment costs varies based on factors such as deployment scale and application needs, it is clear that the capital expenditure involved with implementing AOI systems can be a substantial barrier for many enterprises.

Global Automated Optical Inspection Market Opportunity

Integration with Industry 4.0 and Smart Manufacturing

Industry 4.0 is gaining traction, with countries including the United States, United Kingdom, Germany, and China taking it more seriously. Furthermore, as digitization becomes more widespread, manufacturers are exploring ways to make their goods more productive, accountable, and intelligent. As we anticipate this worldwide revolution, Industry 4.0 will face hurdles before realizing it. The availability of improved tools for easy deployment, political and economic incentives, and appropriate investment in skills and training will all influence the adoption rate. However, ongoing developments in IoT, big data analytics, sensor technology, and automated optical inspection (AOI solutions) are hastening Industry 4.0 change. Companies must improve their ability to source, aggregate, and evaluate production data in real-time, with precise insight into the production line.

For example, consider the V510i Advanced 3D Optical Inspection (AOI) Solution series, a cutting-edge lineup that integrates breakthrough technologies meant to transform the quality control operations in your production workflow. V510i 3D AOI solutions include Smart Measurement and Smart Math technologies, which combine fault identification and measurement capabilities in a single solution. 

Furthermore, a Deloitte analysis shows early adopters of intelligent factories experienced a 10% average boost in worker productivity, manufacturing production, and factory capacity utilization over three years. The research also anticipates that labor productivity will rise by 2% to 12% by 2022. AOI systems contribute significantly to these productivity benefits by automating the inspection process, decreasing errors, and eliminating rework and scrap.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global automated optical inspection market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global automated optical inspection market shareholder and is estimated to grow at a CAGR of 19.8% over the forecast period. This is due to the region's numerous electronics and printed circuit board manufacturers. Further, the low labor cost has been a critical factor in persuading significant electronics manufacturers to locate their manufacturing operations in this region. The rising disposable incomes have raised demand for consumer electronics and vehicles in countries such as China and India, pushing the need for high-quality electronic components and adding to the market's growth. In 2023, China was the world's biggest passenger automobile producer, producing 26.1 million units compared to Japan's 7.8 million. Passenger automobile sales also hit 26.06 million units, up 10.6% from 2022. In December 2023, passenger automobile manufacturing totaled 2.68 million units, a 26.6% increase over the prior year. 

North America is anticipated to exhibit a CAGR of 19.1% over the forecast period, owing to increased innovation and technical developments across all manufacturing sectors. This region's market is also driven by rising demand for smaller, thinner, faster electronic items and smartphones. Adopting automation and AI-powered solutions will likely drive sales growth. Furthermore, improvements in the 3D AOI technology industry and incorporating Industry 4.0 principles will open up new prospects for US makers of automated optical inspection systems.

In Europe, the AOI market is predicted to grow steadily due to the region's significant presence of vehicle manufacturers. Automakers in countries such as Germany and France focus on improving car safety systems, increasing demand for high-quality electronic components, and raising demand for AOI systems in the region.

Furthermore, several variables are predicted to drive growth in Germany over the forecast period. These include the expansion of the automotive and electronics manufacturing sectors and an increased emphasis on quality assurance and process control. Industries across Germany increasingly use AI-powered AOI technology to ensure product quality and reliability. Furthermore, focusing on Industry 4.0 and intelligent manufacturing techniques will drive the AOI system market ahead in Germany.

Segmental Analysis

The global automated optical inspection market is segmented based on type, technology, and industry.

The market is further segmented by type into 2D AOI and 3D AOI.

The 2D AOI category led the market, accounting for 65%. This is due to the low cost and convenience of programming with the 2D AOI technology. Over the years, 2D AOI systems have seen several advances in software interfaces and image processing technologies, resulting in enhanced picture capture speed and significantly reduced inspection cycle times. 

Furthermore, the camera, illumination, and optics employed in 2D systems allow for the simultaneous inspection of small and big components on a printed circuit board. For example, Nordson TEST & INSPECTION introduces the new Quadra Pro 7 Manual X-Ray Inspection (MXI) system. The MXI Quadra 7 Pro system, with its breakthrough Onyx® detector technology, establishes a new industry standard for 3D/2D manual inspection in back-end semiconductor applications. 

The 3D AOI segment is expected to grow fastest throughout the forecast period. This is related to the 3D system's ability to offer volumetric height information for components on a printed circuit board. The 3D AOI systems include laser technology, which improves the identification of co-planarity faults that are ignored during the 2D inspection. Furthermore, 3D AOI devices produce a high-resolution, detailed image of the components on a printed circuit board, eliminating manual inspection. These characteristics, combined with ongoing advances, are projected to drive up the usage of 3D AOI systems.

Based on technology, the market is fragmented into Inline and Offline.

Inline led the market with a 70% share in 2023. This is due to these systems' ability to inspect a large volume of created printed circuit boards at a rapid pace. The inline AOI system can be used at every level of the production process, allowing for a complete examination of printed circuit board components for specification and faults. The inline device can scan both sides of printed circuit boards while requiring less human involvement to flip the boards. Inline AOI systems can quickly scan a vast volume of printed circuit boards, making them ideal for high-volume production industries such as electronics and automobiles.

As a result, most manufacturers install multiple inline AOI systems on their production lines to speed up the inspection process. For example, BuS Elektronik GmbH & Co. KG, an EMS service provider in Reisa, Germany, has installed many automated optical inspection systems to test electronic components for delivery to various electronics, medical, and automotive industries. The deployment of inline AOI systems allows an efficient inspection procedure with no interruption to production, which is predicted to enhance the adoption of these systems.

Offline AOI systems are stand-alone machines that inspect finished assemblies or batches of products in a separate inspection space. These devices are often employed for more thorough inspections that would be difficult or impractical to execute in line. Offline AOI systems provide greater flexibility in inspection parameters and can be utilized for post-production quality assurance, failure analysis, or batch testing.

The market can further bifurcate based on industry into IT and Telecom, Consumer Electronics, Automotive, Industrial Electronics, Aerospace and Defense, and Medical.

IT and Telecom dominated the market in 2023, accounting for 35%. This is due to the widespread use of printed circuit boards in computers in the information technology industry and the expansion of telecom networks worldwide. Telecom applications such as routers, servers, satellite systems, communication devices, broadcasting systems, telecom towers, and LED displays and indicators demand high-quality electronic components, which is why the AOI system is widely used in this business. Consumer electronics had the second most significant market share in 2019 due to various advanced features in home appliances and smartphones, all requiring high-end PCBs to function correctly. Asia Pacific has a high concentration of AOI systems in the consumer electronics market due to the region's large number of electronics manufacturers. 

The automobile industry is predicted to grow at the fastest CAGR over the projection period. AOI systems inspect electronic components, control units, sensors, and vehicle wiring harnesses in the automobile industry. These systems assist automobile manufacturers in maintaining the safety, dependability, and performance of vehicle electronics, assuring compliance with regulatory standards and customer expectations for quality and longevity.

Furthermore, the segment is driven by rising demand for high-performance, long-lasting electrical components that improve vehicle safety. Furthermore, with the introduction of technologies such as anti-lock braking systems (ABS) and advanced driver assistance systems (ADAS), electrified and self-driving vehicles have raised the demand for high-end electronics components in the automotive industry. With the major vehicle manufacturers in Germany, France, and Japan, these countries are among the first to embrace AOI systems in the automobile industry.

Recent Developments

• April 2024- GÖPEL Electronic demonstrated automated test and inspection equipment. GÖPEL Electronics' THT Line · 3D provides a dependable AOI solution for inspecting THT components, THT solder connections, and wave-soldered SMT components.
• January 2024- Yamaha Motor Co., Ltd. (Tokyo:7272) announced that it would add the high-end YRi-V TypeHS to the YRi-V 3D hybrid automated optical inspection (AOI) system for electronic component mounting plants.