Encoder Market Size, Share & Trends

Updated on : October 22, 2024

Encoder Market Size & Growth

[210 Pages Report] The encoder market size is valued at USD 2.7 billion in 2023 and is projected to reach USD 4.5 billion by 2028, growing at a CAGR of 11.0% from 2023 to 2028. The rising need for high-end automation across industries, increasing adoption of Industry 4.0, and growing expansion of automotive markets worldwide are expected to propel the encoder Industry in the next five years. However, mechanical failure in harsh environments will likely pose challenges for the industry players.

The objective of the report is to define, describe, and forecast the encoder market  share based on type, signal type, technology, application, and region.

Encoder Market Forecast to 2028

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Updated on : October 22, 2024

Encoder Market Trends

Drivers: The rising need for high-end automation across industries

The need for automation by manufacturers across industries has been the key demand driver for encoders. It is used in automation to provide precise speed and direction to ensure the motor runs safely and smoothly. As the adoption of automation is increasing worldwide, the usage of encoders is also increasing for various applications. For instance, encoders are used in web tensioning, registration mark timing, linear measurement, backstop gauging, filling, and conveying, among other applications. Similarly, in the manufacturing industry, electricity is used to power electric motors. Therefore, most of these electric motors use encoders to monitor or control the functions of motors.

Restraint: Accuracy-related errors

Encoders are at the heart of any closed-loop servo system and provide feedback to the controller, which uses this information to determine if the motor has reached the commanded position or velocity. The accuracy of encoders is affected by factors such as temperature, vibration, and wear and tear. Manufacturers are working towards developing new technologies and materials to improve the accuracy and reliability of encoders, but these improvements may add to the cost of production.

Opportunity: Rising government initiatives to boost industrial automation

Governments worldwide are supporting the adoption of various automation technologies for the structural development of manufacturing industries. As manufacturing industries are a vital segment of this development, governments worldwide focus on this segment. This is expected to boost the penetration of industrial robots and, consecutively, drive overall market growth.

Challenge: Mechanical failure in harsh environments

Encoders being used in harsh environments is one of the major challenges for the market. Environments that involve extreme temperatures like temperature variations, high humidity, dust, vibrations, and other adverse conditions may affect the accuracy and reliability of the encoder's measurements. In harsh environments, encoder failure is caused by liquid contamination or solid particulate, signal output failure, and mechanical bearing overload. As a result of any of these, the system operates erratically, or the encoder ceases to operate.

Encoder Map/Ecosystem:

Encoder Market Share

Market for incremental encoders is expected to have largest market share during the forecast period.

In 2022, incremental encoders held the largest share of the encoders market, and a similar trend is likely to be observed in the coming years. The simple design and economic nature have led to its high adoption in various applications such as factory automation, wind energy, motor feedback, and heavy-duty applications. HEIDENHAIN (Germany), Renishaw plc (UK), and Baumer (Switzerland) are a few of the key players offering incremental encoders.

Market for the magnetic encoders to have largest market size during the forecast period.

In a magnetic encoder, sensors are used to identify changes in magnetic fields from a rotating magnetized wheel, and then it converts them into electrical signals. A magnetic encoder uses three components: a rotating wheel or ring, a sensing circuit, and a series of magnetic poles around the circumference of the ring or wheel. With a magnetic encoder, a large-magnetized wheel spins over a plate of magneto-resistive sensors.A magnetic encoder is designed in a way that it is capable of providing reliable digital feedback even in harsh environments. Applications for this technology usually require robust sealing, high shock and vibration resistance, broad temperature specs, and contaminant protection while focusing on easy installation, output signal reliability, and downtime reduction.

Healthcare application segment to hold the second largest share of the encoder market during the forecast period

In 2022, the healthcare segment held the second-largest market share in applications. The healthcare segment requires high precision where there is no room for error; encoders play a vital role in accurate positioning. Medical equipment designers are utilizing advanced technologies; motion control is one such area in the healthcare sector. Applications such as robotic surgery, dialysis, artificial respiration, physical therapy, oncological radiation treatment, and laboratory analysis (DNA sequencing) are expected to grow in the coming years, owing to advances in encoder technology. In certain applications, there is a growing need for exact positioning, whereas, in other instances, smooth motion control is required. An encoder provides compact solutions for these controls in various healthcare applications.

Encoder Market Regional Analysis

Encoder market in the Asia Pacific estimated to grow at the fastest rate during the forecast period.

The encoder market in the Asia Pacific has been studied for China, Japan, South Korea, India, and the Rest of Asia Pacific. The growth of the encoder market in the Asia Pacific is attributed to the active innovation in the electric and automotive industry, rapid urbanization and industrialization, increased GDP of emerging markets such as China and South Korea, and political support to expand the manufacturing sector in developing countries in the region.

Encoder Market by Region

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Top Encoders Companies - Key Market Players:

Major vendors in the encoder companies include

• Sensata Technologies (US);
• HEIDENHAIN (Germany);
• Fortive (Dynapar) (US);
• Renishaw plc (UK);
• Mitutoyo Corporation (Japan);
• FRABA B.V. (Netherlands); ifm electronic (Germany);
• Pepperl+Fuchs (Germany);
• Maxon (Switzerland).  

Encoders Market Report Scope :

Encoder Market Highlights

This research report categorizes the encoder market based on type, signal type, technology, application, and region

Recent Developments in Encoder Industry

• For instance, in July  2022, Sensata Technologies (US) acquired Dynapower Company LLC (South Burlington, Vermont), a leading energy storage and power conversion system provider, by Pfingsten Partners, a private equity firm. The objective is to deliver highly engineered, mission-critical power conversion solutions to fast-growing renewable energy storage, electric vehicle charging, and industrial and defense.
• In July 2022, HEIDENHAIN (Germany) launched new encoders representing the newest inductive scanning technology: ECI 1122 and EQI 1134. These new encoders have EnDat 3 interface, because of which they benefit from low signal noise, low-speed ripple, operating-data collecting, and reduced cabling. These advantages were obtained by increasing the resolution of the single turn position to 22 bits, which also enhances motor control performance dramatically.

Frequently Asked Questions (FAQ):

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