Smart Manufacturing Market Size, Share & Trends Analysis Report By Component (Hardware, Software, Services), By Technology (Machine Execution Systems (MES), Programmable Logic Controller (PLC), Enterprise Resource Planning (ERP), SCADA, Discrete Control Systems (DCS), Machine Vision, 3D Printing, Plant Lifecycle Management, Plant Asset Management, Product Lifecycle Management, Human Machine Interface), By Deployment (Cloud, On-Premises), By Enterprise Size (Large Enterprises, Small & Medium Enterprises), By End-Use (Automotive, Aerospace & Defense, Chemicals & Materials, Healthcare, Industrial Equipment, Semiconductor and Electronics/High-Tech, Food & Agriculture, Oil & Gas, Pulp & Paper, Medical Devices, Mining & Metals, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global smart manufacturing market size was valued at USD 283.23 billion in 2023. It is expected to reach USD 812.32 billion in 2032, growing at a CAGR of 12.42% over the forecast period (2024-2032). The adoption of Industry 4.0 technologies, including IoT, AI, and robotics, is revolutionizing manufacturing processes. These advancements enable real-time data analytics, predictive maintenance, and improved operational efficiency, driving the global smart manufacturing market. 

Smart manufacturing (SM) is a strategy driven by technology that uses Internet-connected equipment to monitor the manufacturing process. SM aims to seek a solution to enhance operational efficiency via data analytics and automate operations. The Industrial Internet of Things (IIoT) has a particular smart manufacturing application. Sensors are adopted in equipment production to gather information on their functional performance and state during implementations. Previously, data was retained on personal devices in local databases and was used to identify the cause of system breakdowns once it happened.

As smart manufacturing is becoming increasingly common and more equipment will be hooked up to the IoT, it will be able to interact more effectively, perhaps enabling further automation.

Market Dynamics

Market Drivers

Government Support to Smart Manufacturing

Governments throughout the world recognize the bright future of smart manufacturing technologies. Thus, the government support and funds research and development for technologies like industrial 3D printing and IIoT. Various governments are sponsoring innovation in IIoT as they anticipate becoming prospective consumers of the technology. They are spending on new IoT implementation and research projects to operate and develop smart cities in the foreseeable future.

Governments across the globe are undertaking projects and sponsoring research and technology firms and educational institutions to analyze the possibilities of 3D printing technology further. Countries such as Canada, the United States, and the United Kingdom have established national initiatives to foster university-level 3D printing research, advance technology, and launch numerous enterprises. The emergence of novel uses for 3D printing has also piqued the interest of companies and governments worldwide. Asia-Pacific’s governments are constantly working on programs and strategies to digitize production sites.

For example, the government of India invested roughly USD 265 million in an "Economic Package" in May 2020. The investment was made to create businesses in various industries, including agriculture, manufacturing, healthcare, and others. Several MSMEs and startups are likely to implement automation software in their production units due to this investment, increasing their efficiency and business. Thus, government support through initiatives to adopt smart manufacturing is likely to drive the market over the forecast period.

Advancements in Connectivity Technologies (5G) and Investments in New Infrastructure

The development of the 5G era is likely to alter the current IoT-based smart industrial applications. 5G can potentially change the way future IoT ecosystems are built, particularly in terms of latency, security, scalability, reliability, and the level of individual control over connectivity parameters. More complex use cases needing greater network capabilities are emerging as the scope of IoT application domains expands. Support for integrated sensors, more precise device positioning and high-speed device movement are examples of such capabilities.

5G can deliver speeds in the gigabits per second range, with latency in milliseconds and the capacity to handle 1,000 times more data than current network technologies. As a result, advancements in connection technologies like 5G are a significant element driving the global market growth. In addition, the introduction of 5G access radio networks is likely to have a substantial impact on the market. 

For example, according to Huawei Technologies, the fifth-generation wireless technology has the potential to increase global manufacturing GDP by USD 740 billion, or 4%, by 2030. Given the dynamics above, manufacturing, robotics, and other industries may be able to change the conventional trajectory by collaborating with the telecommunication sector to drive smart manufacturing technology acceptance.

Market Restraints

High Investments Involved

The demand for huge investments to install smart manufacturing solutions acts as a global curb on the market's growth. Innovative manufacturing technologies, including Enterprise Manufacturing Intelligence (EMI), Automated Guided Vehicles (AGVs), and Warehouse Management System (WMS), take a huge amount of capital to set up and deploy. This may put manufacturers off from implementing smart manufacturing. For example, EMI is deployed in businesses to enable real-time planning, control, and execution of processes to boost production and efficiency; however, this costs money.

The need for consulting, purchasing, and implementing these systems and services accounts for the high cost of installing data and enabling technology systems. The adoption of modern smart manufacturing equipment, like industrial robots and smart field devices, follows the introduction of smart manufacturing. Voice recognition, gesture recognition, and multitouch screens are examples of advanced functional technologies that can interface with these machines. This raises the system's cost even further. These technologies are still relatively costly, and enterprises operating in price-sensitive markets may face an additional financial strain.

What Are Future Growth Opportunities in the Market for Smart Manufacturing?

Rapid Industrialization in Developing Economies

Owing to lower real estate prices and labor costs, companies from industrialized economies are eager to expand their operations in emerging economies. Likewise, growing industrialization in rising economies such as Africa, Mexico, Brazil, India, China, and Indonesia have resulted in significant infrastructure costs, luring global firms to set up manufacturing operations in these regions. Due to these advancements, innovative and complex warehouse facilities are needed to connect and manage supply chains. 

Thus, the rapid industrialization in the emerging economies across the globe is likely to offer lucrative growth opportunities to the key players during the forecast period.

Which Trends May Impede Smart Manufacturing Market Growth?

The Proliferation of the Internet of Things and Big Data

Big data is the most important application, and it is regarded as one of the market's developing trends. Big data applications are in high demand due to the growing number of organized and unstructured data and information. Similarly, the Internet of Things is the most crucial commercial trend (IoT). Smart gadgets, automobiles, sensors, and other linked components are all part of the Internet of Things powered by artificial intelligence.

These devices generate enormous amounts of information, which artificial intelligence systems process. Self-driving/autonomous automobiles, smart houses, intelligent thermostats, pacemakers, smart city solutions, and other applications are among the possibilities.

Sensor technology advancements have resulted in a wide range of measurement equipment employed as components in automatic feedback control systems. Electromechanical probes are particularly vulnerable, as are laser beam scanning, electrical field approaches, and machine vision. The characteristics listed above are likely to be the key trends in the global market.

Regional Analysis

The global smart manufacturing market share has been segregated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

Supremacy of Asia-Pacific Over Others

With a market value of USD 304 billion by 2030, registering a CAGR of 14%, Asia-Pacific is expected to be the largest smart manufacturing market. SMEs are set to propel the application of smart manufacturing solutions due to the robust ecosystem in countries like Japan, India, and Australia. Large businesses in discrete sectors, on the other hand, are expected to produce the most income in the market. 

Disruptive technologies such as Industry 4.0, AI, augmented reality, the Internet of Things (IoT), and others push the region's cloud usage. As a result, cloud-based smart manufacturing solutions are likely to become more prevalent. As a result, cloud-based smart manufacturing solutions are becoming more common, driving regional growth.

North America is expected to be the second-largest smart manufacturing market with a market value of USD 180 billion by 2030, registering a CAGR of 11%. Canada and the United States are investing more in modern industrial technologies. The introduction of the smart manufacturing concept has been accelerated by technological advancements, the availability of substitute printing materials, and lower equipment prices. 

The North American aerospace & defense, health, industrial, and automotive industries are all seeing significant investment efforts expected to grow significantly in the future. Various government bodies, such as NASA, have identified significant 3D Printing R&D investments that can contribute substantially to space applications and produce new technologies to fuel economic expansion.

During the forecast period, Latin America is anticipated to develop at a considerable CAGR. Smart manufacturing is becoming more commonplace due to the aggressive penetration of the Latin American market for innovation and automation. Opportunities in smart manufacturing are growing due to Latin America's recent start in the modern technological revolution. Additionally, the region is close to and easily accessible to a variety of raw resources, which promotes smart production and market expansion.

Segmental Analysis

The global smart manufacturing market share has been classified based on components, technology, end-use, and regions.

The market has been segmented into hardware, software, and services based on components. The software component segment is expected to dominate the global market, and it is projected to reach USD 388 billion by 2030, registering a CAGR of 13% during the forecast period. Many solutions, such as product lifecycle management, enterprise resource planning, and manufacturing execution systems, have been in use for many years, representing that the market is mature. Also, the introduction of analytics and AI-driven systems is expected to be a key driver of segment growth.

During the forecast period, the hardware segment is anticipated to expand at a substantial CAGR of around 13.1%. High-level and suitable hardware is necessary for the advanced software to function. Modern hardware is necessary for advanced software to function. Manufacturing facilities use nimble hardware, use less electricity, and can operate without human intervention. To aid the industry in becoming more standardized, contemporary gear must also be IoT-compatible.

The smart manufacturing market has been segmented into machine execution systems (MES), programmable logic controller (PLC), enterprise resource planning (ERP), SCADA, discrete control systems (DCS), machine vision, 3d printing, plant lifecycle management, and plant asset management based on technology. The DCS technology segment is expected to dominate the global market, and it is projected to reach USD 116 billion by 2030, registering a CAGR of 12% during the forecast period. 

For procedures like controlling, monitoring, and reporting, DCS is versatile and easy, which has helped it gain market share. DCS also includes characteristics like regulating and redundancy, which improve systems reliability. Leading key players are likely to launch DCSs for various industry verticals, driving growth.

The 3D printing market category held a sizeable market share, which is anticipated to grow at the fastest rate throughout the projection period. Smart producers may now print any small or large item by simply designing it in a 3D program. A smart manufacturing facility can quickly design and print 3D models, saving time and money. The market is a sizable investor in and buyer of software and hardware for 3D printing.

The smart manufacturing market has been segmented into automotive, aerospace & defense, chemicals & materials, healthcare, industrial equipment, electronics, food & agriculture, oil & gas, and others based on end-use. The automotive end-user segment is expected to dominate the global market, and it is projected to reach USD 200 billion by 2030, registering a CAGR of 14% during the forecast period. 

Benefits such as sustainability, quality, asset efficiency, and cost savings given by smart factory solutions are essential elements driving category growth. Furthermore, adopting and investing in the smart factory is predicted to provide automobile manufacturers with competitive benefits such as improved profitability, faster time to market, higher product quality, and a more stable labor force. Smart manufacturing solutions in the automotive sector include the automation of entire manufacturing plants, testing and simulation, and consumer connectivity.

The industry segment for aerospace and defense is anticipated to have the highest CAGR during the projection period. As product precision is crucial, this business is making significant investments in smart manufacturing. Multiple flights are required for testing in space exploration, and this can only be done by building rockets quickly and intelligently. The defence sector makes significant investments in industrial automation to develop cutting-edge defensive strategies to counter emerging threats.

Impact of covid-19

COVID-19 had a significant impact on the global economy and all businesses worldwide. To stop the pandemic from spreading, governments around the world instituted lockdowns. The complete global lockdown severely disrupted people's livelihoods and quality of life in several countries' early stages of the pandemic. As a result, supply chain disruptions occurred all around the world. The world's economies have suffered due to a significant drop in product demand.

The pandemic severely hampered production across industries, resulting in a lack of basic materials. The fall in production was primarily due to supply chain interruptions and a fall in exports. During this time, the primary goal of enterprises was to stay afloat, and intelligent manufacturing played an important role in helping businesses to operate efficiently with limited resources and manpower.

Market Recovery Timeline and its Challenges

The post-pandemic phase will be significant for the global smart manufacturing market. The recovery can be hindered by supply chain disruptions, which will affect the market dynamics and the prices of the product. Also, distribution and transportation capabilities restrictions, unfavorable financial conditions, and ascended expenses will challenge the global market. Also, limited production, support operations, labor shortages, and constraints for other end-user sectors, suppliers, and vendors may fail to meet the consumer demand. Overall, the recovery will be challenging for the global smart manufacturing market.

Recent Developments

• April 2024 - Rockwell Automation, a global leader in industrial automation and digital transformation, released the findings of its 9th annual "State of Smart Manufacturing Report." The comprehensive study conducted a survey of over 1,500 manufacturers in 17 prominent manufacturing nations, including India.
• January 2024 - With the acquisition of all assets from FabTime Inc., San Luis Obispo, California, USA, effective January 18, 2024, INFICON further solidified its position as a supplier of semiconductor Smart Manufacturing software. All financial details of the transaction will remain confidential, as agreed upon by the two parties.