The global encoder market size was worth USD 2.4 billion in 2021. It is expected to reach USD 4.5 billion by 2030, growing at a CAGR of 7.83% during the forecast period (2022–2030). 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. A feedback signal from the encoder can be used to calculate position, count, speed, or direction. This data can be used by a control device to transmit a command for a specific task. As stated, an encoder is a device for sensing and providing feedback. Machines across all sectors of industry use encoders.
Encoders create signals using various technologies, including mechanical, magnetic, resistive, and optical. Applications for motion control depend heavily on encoders. To improve the precision and dependability of a drive system, they can provide position, speed, and direction data to a controller or drive. Encoders keep up with technological advancements by incorporating the most recent communications and networking innovations and giving engineers the resources they require to solve issues in various motion control applications.
Moreover, the development of intelligence within encoders has been a prominent trend in the global market, pushing the use cases of encoders, which are already utilized in cut-to-length applications, robotics, plotters, packing, conveying, automation, sorting, imaging, and filling, among others. The rising production of auto parts and the increase in cars on the road are the main factors fueling the market's expansion. Encoders are being used more frequently in the production of cars by automakers due to the rapid advancement in vehicle automation that is being made to improve the customer experience. Encoders provide real-time acceleration, speed, and rotational position information to the automated guided vehicle controller. Sales of encoders are accelerating due to the increased use of sophisticated automation technology in sectors like automotive and electronics.
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Growing Deployment in Advanced Automotive Systems
The expansion of the encoder market is primarily driven by the rising sales of cars and the production of auto parts. OICA estimated that 80.14 million motor vehicles were produced worldwide in 2021. China, the USA, and Germany were the top three countries for producing cars and commercial vehicles in 2021. With more than 26 million vehicles built in 2021, China was the world's most significant producer of passenger automobiles, making up close to one-third of the global total.
To accommodate the increased need of consumers to stay connected while on the go, automakers are increasingly integrating Bluetooth and other cellular technology into their automobiles. Since the automotive sector uses different encoders to generate digital position and motion data for shaft rotations, the sector's expansion is anticipated to directly impact the demand for encoders. The market for off-highway vehicles is growing daily, and so is the need for dependable speed and position sensing systems. This increases the demand for the encoder in the automotive market.
Particularly in the European region, the demand for electric vehicles has increased in recent years. Environmental concerns spread around the globe. As a result of the lower emissions EVs produce, they are becoming more and more popular. The efficiency and performance of EVs depend on the precise position measurement of the vehicle rotor, which is anticipated to fuel the EV industry's demand for encoders throughout the projection period. Additionally, these changes are motivating encoder manufacturers to create advanced encoders. Vehicle automation is advancing quickly every day to improve the consumer experience. Modern automobiles have speech recognition, IC, integrated LED lighting, and video and image compatibility. Encoders are a crucial component of automotive automation and are employed by automakers to build more cars. The market's growth should be boosted as a result.
Mechanical Failures in Harsh Climate
Encoders are frequently employed in challenging or hostile conditions, including those found in the production of specialist vehicles, heavy equipment, and food and beverage processing. Changes in the surrounding temperature can potentially accelerate encoder failure rates. Encoders can operate normally in temperatures between -30°C and +100°C. A few manufacturers have started testing encoders for EMC (electromagnetic compatibility) to address this problem. These tests include vibration, continuous shock, dust protection, and water jet testing. This is to ensure that using standard encoders in harsh environments won't result in the corrosive failures that occur in those encoders.
Growing Demand for Artificial Intelligence
Artificial intelligence is utilized to construct computers that accomplish jobs more efficiently than people, allowing them to work 24 hours a day in demanding circumstances. Enterprises are using artificial intelligence in mobile robotics, unmanned aerial drones, virtual assistants, digital twins, speech and image recognition, machine learning, and other applications as machines grow more proficient. Additionally, encoders use less energy to control and commutate the rotor's displacement at any time. Future mobile robotics will emphasize energy-efficient encoders since mobility pushes the demand for battery-powered operations. Rotary encoders are therefore improving mobile robots by utilizing capacitive technology. Additionally, they can assist developers of numerous applications in adhering to new efficiency standards, making their incorporation into mobile robots simple.
The global encoder market is segmented into type, technology, end-user, and region.
Type-wise, the global encoder market type 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. These types of encoders are frequently employed in situations where mechanical systems need to be monitored or controlled. Encoders are commonly used in various industries, including the lift industry, robotics, filling, conveying, cut-to-length applications, and motor feedback. The market for rotary encoders is expanding due to the rising demand for robotics and automated industrial machinery. In various applications, such as industrial controls, robotics, photographic lenses, computer input devices, and rotating radar platforms, mechanical systems must be monitored, controlled, or both.
The Linear Encoder section will hold the second-largest share. Linear encoders are mechanical motion sensors that can detect and digitize linear position and movement. They are specialized sensors connected to a scale that can see and translate the location into digital or analog signals, providing a readout in digital form. The kind of encoders delivers electrical pulse impulses to the controller via a transducer or "cut-outs" on a scale. The PLC could interpret and transform these pulse impulses into instructions that the machinery might use.
Technology-wise, the global encoder market technology 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. The optical encoder comprises a light-emitting diode (LED), photosensors, and a disc with holes (slits) in the radial direction known as a code wheel. It detects rotational position data as an optical pulse signal. The demand is fueled by the optical encoder's several benefits over competing technologies. Since optical encoders have a mechanism that involves the identification of the passage of light through the slit, it is simple to increase the accuracy and resolution of optical encoders by inventing the form of the slit.
The Magnetic section will hold the second-largest share. When the magnetic field changes, the magnetic encoder detects rotational position data and translates it into electrical impulses to provide an output. General magnetic encoder components include a permanent magnet and a magnetic sensor. Applications that value environmental resistance, portability, lightweight, and excellent dependability use magnetic encoders. Due to its increased precision and resolution and the ability to accommodate hollow through shafts, magnetic encoders are starting to be used even in the industry now dominated by optical encoders.
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. Encoders are used in various industrial applications, including conveying, filling, backstop gauging, web tensioning, linear measurement, registration mark timing, and more. Nevertheless, giving feedback on the motion control of electric motors is the most common application. Electric power motors consume a sizable portion of the electricity used in the industrial sector. Encoders are built into the majority of these motors. A growing variety of industrial applications are being made for robots, particularly welding, material handling, assembly, and grinding. These robots need accurate encoders to help direct their motion because there is often little human oversight or monitoring.
The Automotive section will hold the second-largest share. Encoders are mechanical motion sensors that can control speed in the automotive sector. To measure the angle or angular position, encoders are employed. For instance, the car's steering wheel is necessary to accurately determine in real-time which direction the vehicle is being driven. Therefore, the 360° rotation is divided into thousands of distinct steps by an encoder inside the steering wheel. The breadth of the encoder market has been expanded due to numerous governmental organizations and regional authorities enacting strict laws and encouraging the use of autonomous technology in automobiles.
Region-wise, the global encoder market includes North America, Europe, Asia-Pacific, and the Rest of the World.
The Dominance of Asia-Pacific over Others
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Asia-Pacific will command the largest market share, expanding at a CAGR of 8.53% over the forecast period. Increasing industrialization and demand for improved manufacturing process solutions drive market expansion. Since Asia-Pacific is home to major industrial centers such as Japan, China, and India, it is a hub for global trade. Increased production capacity and enterprise service contracts are other factors driving industry expansion. The market for encoders has also grown due to rising competition, which has introduced new products. Programs of the Chinese government, such as the Made in China 2025 plan, encourage the use of research and development in factory automation and technology, as well as investments in them. The "Made in China" project also intends to increase the domestic manufacturing of automation hardware and equipment because most automation equipment is imported from Germany and Japan. Government initiatives in the automation sector will further propel the market.
Europe will acquire a market share of USD 1,343 million, growing at a CAGR of 7.15% over the forecast period. Some of the world's most prominent tech centers are located in Europe, which is a significant supporter and user of contemporary technology. The European industries are increasingly implementing modern technologies, including robotics, propelling the market expansion. Governmental entities also launch several measures to speed up the encoders. For instance, the industrial strategy of the European Union (EU) aims to encourage the competitiveness and expansion of the region's manufacturing sector. The government implements several trades, energy, and innovation projects under this. It is also believed that this will assist local encoders' manufacturers.
The encoder market may also be influenced by national research projects on the application and advancement of robots in various industries. In mobile robotics, rotary encoders are used to measure the motion (direction and speed) of each wheel on the robot. For instance, a new national robotics research laboratory was being set up in 2021 to assist the UK in promoting smart manufacturing by removing obstacles and accelerating smart, collaborative robotics technology. The Made Smarter Innovation Research Centre for Smart, and Collaborative Industrial Robotics sought to improve the effectiveness, consistency, and adaptability of UK manufacturing.