Smart Factory Market Size, Share & Analysis

Smart Factory Market Size, Share & Growth

[272 Pages Report] The global Smart factory market size is expected to grow from USD 100.6 billion in 2024 to USD 164.0 billion by 2029, registering a CAGR of 10.3%. The smart factory market is thriving due to heightened workplace safety awareness, stringent regulatory compliance, and widespread integration of automation technologies across global industries, fostering substantial growth.

The 4IR Market Boom: Technology’s Role in a New Industrial Era

Smart Factory Market Forecast to 2029

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Smart Factory Market Trends & Dynamics

Driver: Rising demand for technologies such as IoT and artificial intelligence in industrial environments

Artificial intelligence (AI) in manufacturing plants constitutes technologies such as deep learning, computer vision, natural language processing (NLP), and context awareness. These technologies not only enable machines to execute activities that are currently being performed by humans but also enhance business processes and overcome challenges that manufacturers face. Big data and computer vision technologies are increasingly being used because of the growing adoption of AI-based solutions in manufacturing industries such as semiconductor & electronics, energy & power, pharmaceuticals, automotive, heavy metals and machinery manufacturing, and food & beverage.

The integration of IoT has revolutionized various industries, notably manufacturing, giving rise to the term Industrial IoT (IIoT). IIoT is reshaping manufacturing plants by connecting intelligent devices through SCADA systems, establishing fully digitalized facilities. SCADA systems, infused with IoT and AI technologies, empower industries to monitor and control applications, enhance response times, and predict machine failures more accurately. This results in reduced operational costs and heightened efficiency. Utilizing IoT- and AI-based SCADA platforms facilitates seamless data transmission and analysis, streamlining plant operations. Smart factories enable automatic data collection and analysis, empowering managers to make well-informed decisions and optimize production. Sensors and machines communicate data to the cloud via IoT connectivity solutions at the factory level.. Using such IoT devices in smart factories leads to high productivity and improved quality. Manual inspection business models are replaced by AI-powered visual insights, which reduce manufacturing errors and save money and time. Many solutions providers across the world provide IoT-based smart factory solutions; for instance, in May 2021, Zyter Inc., an IoT enablement platform, launched “Zyter Smart Factories”, an end-to-end intelligent solution that connects factory floor machinery, workers, and building systems using the latest IoT technology devices on Zyter’s digital transformation platform.

Restraint: Need for significant capital investments.

The evolution of a conventional manufacturing facility into a sophisticated smart manufacturing unit necessitates significant capital investment in advanced machinery, software, and IT infrastructure. This includes crucial elements like smart field devices, industrial robots, and advanced communication technologies for seamless industrial automation. However, this shift poses a financial challenge for industries in price-sensitive regions like Asia Pacific and South America. Industry experts cite overall costs, encompassing expenses for upgrading traditional systems, as a major impediment in transitioning to smart factories. The upfront setup cost for overhauling the entire manufacturing process is often impractical for many companies due to its high magnitude. Additionally, ongoing maintenance and upgrades required for automation software systems pose further financial burdens, particularly for small businesses.

Opportunity: Emergence of 5G technology in smart factory

Smart factories integrate Internet of Things (IoT), sensors, robots, and computerized maintenance management systems (CMMS) to collaborate, generating real-time analytics. This enables automated processes, enhancing productivity and minimizing downtime. Typically linked via Ethernet, Wi-Fi, or 4G LTE, smart factories drive large-scale industrial automation. The emergence of 5G technology, expected to be ten times faster than 4G, promises to expand the accessibility of individual factories. With 5G, factories comprise powerfully connected and continuously updated components. Smart factory owners leverage 5G for secure cellular technology use, tailored to specific use cases. Placing sensors on equipment connected to 5G networks enables seamless real-time optimization by extracting data without connecting to machines. Manufacturers increasingly adopt 5G networks for robust, uninterrupted connections. The installation of 5G in factories eliminates the need for wired connectivity, fostering a high-speed, flexible manufacturing environment with reduced downtime. A network supporting speed, coverage, and reliability becomes crucial for industries. The emergence of 5G networks is poised to offer a comprehensive solution for factories, creating significant opportunities for smart manufacturing.

Challenge: Vulnerability to cyberattacks

Developing a sensor-based network for monitoring and controlling critical infrastructures must address the significant challenge of cyberattacks. SCADA systems, comprising sensors, mainframe computers, and communication and storage systems, are susceptible to such threats. These systems, managing critical infrastructure operations, face the risk of disruption, impacting organizations, communities, and economies. Catastrophes like oil or sewage leaks and electricity grid failures can result in long-term consequences. SCADA systems, with diverse communication systems, are vulnerable to cyberattacks at various nodes, causing malfunctions and potential disasters such as oil spills, radiation leaks, and transportation delays. While using common technology standards like IPv5 and IPv6 enhances connectivity and accessibility of real-time data for effective decision-making, it also increases vulnerability to external attacks in shared networks. In the construction of SCADA systems, prioritizing real-time data availability over data confidentiality underscores the threat cyberattacks pose to the smart factory market.

Smart Factory Market Ecosystem

Smart Factory Market Segmentation

Industrial sensors holds the largest market share among the component of smart factory market  in the year 2023.

The industrial sensor market has seen significant worldwide expansion, propelled by a surge in demand for automation and data-driven decision-making. Various industries, including manufacturing, healthcare, and energy, are increasingly embracing sensor technologies to boost efficiency. Technological progress, particularly the incorporation of IoT and AI, is accelerating the adoption of sensors. The growing recognition of the advantages associated with real-time data monitoring and analytics is a key factor driving the widespread growth of the global industrial sensor market.

Manufacturing Execution Systems (MES) segment to hold largest market share among the solution of smart factory market in 2023.

The global expansion of Manufacturing Execution Systems (MES) is gaining momentum, propelled by widespread adoption of Industry 4.0. MES plays a pivotal role in real-time monitoring, data analysis, and process optimization, enhancing overall manufacturing efficiency. Its integration with cutting-edge technologies such as IoT and AI is amplifying its appeal, providing advanced production visibility and traceability. In response to the growing emphasis on smart manufacturing, MES implementation is on the rise across various industries, leading to streamlined operations, cost reduction, and increased competitiveness on a global scale.

Metal & Mining is expected to register highest CAGR during the forecast period

The metal and mining sector has experienced notable growth in the adoption of smart factory practices, incorporating cutting-edge technologies such as IoT, AI, and automation. These smart factories contribute to heightened operational efficiency, real-time monitoring, and predictive maintenance, resulting in streamlined production processes and optimized resource utilization. This transformation has substantially elevated safety standards, minimized downtime, and boosted overall productivity within the metal and mining industry. The ongoing integration of smart technologies remains a key driver of innovation and competitiveness, heralding a significant departure from conventional industry practices.

Medical devices is expected to register highest CAGR during the forecast period

The medical devices sector is experiencing substantial growth in smart factory adoption. Integration of advanced automation, IoT connectivity, and data analytics enhances operational efficiency and precision in manufacturing. Smart factories optimize production processes, minimize errors, and ensure stringent quality control, resulting in heightened production speed and cost reduction. Real-time monitoring capabilities further revolutionize the medical device manufacturing landscape, fostering innovation and boosting competitiveness within the industry.

Asia Pacific to hold largest market share in the year 2023

The smart factory industry in the Asia-Pacific region is experiencing robust growth, driven by increasing industrial automation and adoption of advanced technologies. Factors such as the demand for improved efficiency, rising investments in Industry 4.0, and government initiatives promoting smart manufacturing contribute to the sector's expansion. The integration of technologies like IoT, AI, and robotics further accelerates the smart factory market's evolution, positioning the Asia-Pacific region as a key player in the global smart manufacturing landscape.

Smart Factory Market by Region

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Top Companies Smart Factory Market - Key Market Players

The Smart factory companies players have implemented various organic and inorganic growth strategies, such as product launches, collaborations, partnerships, and acquisitions, to strengthen their offerings in the market. The major players in the market are

• ABB (Switzerland), Emerson Electric Co. (US),
• Siemens (Germany),
• Schneider Electric (France),
• Mitsubishi Electric Corporation (Japan),
• General Electric (US),
• Rockwell Automation, Inc. (US),
• Honeywell International Inc. (US),
• Yokogawa Electric Corporation (Japan),
• OMRON Corporation (Japan),
• Endress+Hauser (Switzerland),
• FANUC Corporation (Japan),
• WIKA (Germany),
• Dwyer Instruments, LLC. (US),
• Stratasys (US),
• 3D Systems Corporation (US)

The study includes an in-depth competitive analysis of these key players in the Smart factory market with their company profiles, recent developments, and key market strategies.

Scope of the Smart Factory Market Report

Smart Factory Market Highlights

This report has segmented the Smart factory market based on Component, Solution and Process Industry, Discrete Industry and Region.

Recent Developments:

• In December 2023, Mitsubishi Electric India has unveiled a cutting-edge smart manufacturing facility for advanced Factory Automation Systems in Talegaon Industrial area, Maharashtra, India. This facility adheres to top industry standards, ensuring the production of high-quality and reliable products.
• In November 2022, ABB Measurement & Analytics inaugurated its first smart instrumentation facility in Bangalore, India, supporting the region's goal of becoming a global manufacturing hub. Equipped with advanced technology, it aligns with the "Make in India" program, fostering efficient and sustainable customer operations.
• In May 2022 Stratasys Ltd., a frontrunner in polymer 3D printing solutions, has unveiled an array of new manufacturing materials spanning three distinct 3D printing technologies. Notably, this release includes third-party materials specifically tailored for FDM® 3D printers, marking a significant milestone. With the introduction of 16 new materials, Stratasys significantly broadens its capabilities, enabling diverse applications in a wide range of manufacturing environments.

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