Optical Encoder Market is Estimated To Witness High Growth Owing To Trends of Industrial Automation
The Optical Encoder Market is estimated to be valued at US$ 2580.9 Mn in 2023 and is expected to exhibit a CAGR of 8.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Optical encoders use optical sensing to provide digital or analog output
encoding while being robust and non-contact compared to other forms of
incremental or absolute position sensors. They find applications for measuring
linear, rotary or angular position in various industrial and automation equipment.
Optical encoders provide high resolution and accuracy to determine position in
machine tools, assembly lines, robots and industrial controls.
Market key trends:
One of the major trends driving growth of the optical encoder market is
increasing adoption of industrial automation. Automation using robotics,
programmable logic controllers and machine vision requires precise motion
control and position sensing. Optical encoders satisfy these needs with their
high accuracy, durability and ability to withstand harsh industrial
environments. Their cost effectiveness compared to other position sensors also
favors adoption in automation equipment. This is leading to increasing demand
for optical encoders from industries such as semiconductor manufacturing, automotive,
packaging and food processing.
Porter’s Analysis
Threat of new entrants: The optical encoder market requires heavy investment in
R&D for technological advancements which acts as a barrier for new
companies. In addition, established key players have strong brand reputation
and distribution networks.
Bargaining power of buyers: Customers in the optical encoder market have
moderate bargaining power given the variety of product choices from key global
and regional players. Availability of alternatives further limits the buyers
power.
Bargaining power of suppliers: The presence of a large number of suppliers for
electronic and mechanical components limits their bargaining power. The
suppliers do not hold significant influence over pricing.
Threat of new substitutes: Products like resolvers, stepping motors, and
synchro/resolver-to-digital converters are substitutes for encoders. However,
encoders have proven reliability in industrial automation which reduces threat
from substitutes.
Competitive rivalry: Intense competition exists between the key global players
to gain market share through technological innovations.
SWOT Analysis
Strength: Optical encoders offer high reliability and durability for use in
harsh industrial environments. Growing automation trends are boosting demand.
Weakness: Higher cost compared to conventional encoder variants is a hindrance,
especially in cost-sensitive markets. Dependence on electronic components
imports poses supply chain risks.
Opportunity: Rising adoption of motion control systems across industries
increases scope for encoders. IoT-based predictive maintenance solutions
present opportunities.
Threats: Economic slowdowns can negatively impact capital expenditures across
end-use industries. Trade policies and dynamics affect prices of imported raw
materials.
Key Takeaways
Global
Optical Encoder Market Demand is expected to witness high growth at a CAGR of 8.7% over the forecast period,
due to increasing demand from industrial machinery, food processing equipment,
robotics automation systems, and factory automation. North America is expected
to dominate the optical encoder market throughout the forecast period due to
the strong presence of manufacturing industries and the rapid adoption of
industrial automation in the region. Europe and Asia Pacific are also projected
to offer substantial growth opportunities during the analysis period.
Key players operating in the optical encoder market are Honeywell International
Inc., Renishaw plc, Sensata Technologies, Inc., US Digital, Rockwell
Automation, Inc., Allied Motion Technologies Inc., and Grayhill Inc. Honeywell
and Renishaw capture a major share of the encoder market owing to their diverse
product portfolio and extensive distribution networks across regions. Major
players are focusing on new product launches, collaborations, and geographic
expansion strategies to gain a competitive edge in the market.
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