Sensor Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

Sensor Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Sensors Market size is expected to grow from USD 116.72 billion in 2023 to USD 165.47 billion by 2028, at a CAGR of 7.23% during the forecast period (2023-2028).

The emergence of automation may augment the demand for sensors as they play a vital part in detecting, analyzing, measuring, and processing several transformations, like alteration in position, length, height, exterior, and dislocation in industrial manufacturing sites.

Key Highlights

• Increasing sensor compatibility with the Internet of Things (IoT) platform is gradually becoming a prerequisite for facilitating remote monitoring and control. The IoT-connected devices have opened massive opportunities for sensors in several applications like industrial, medical, consumer electronics, automotive, etc. According to Cisco's Annual Internet Report, by 2023, there are expected to be nearly 30 billion network-connected devices and connections, up from 18.4 billion in 2018. By 2023, IoT devices are expected to make up 50% (14.7 billion) of all networked devices, up from 33% (6.1 billion) in 2018. Such an increase in IoT devices would drive the growth of the studied market.
• Furthermore, the adoption of sensors depends on the penetration of robotics across end-user industries. The robotics market has been experiencing a significant transformation, with robotics increasing beyond the workhorses of the industrial shop floors and beginning to adopt the roles of personal assistants, surgical assistants, autonomous vehicles, delivery vehicles, exoskeletons, and crewless aerial vehicles, among multiple other uses. Such applications widen the scope of operation for sensors.​
• Technological advancement in sensor technology has enabled automated devices to intelligently interpret images, sound, and other data without potent processing. Furthermore, the increasing demand for IoT and connected devices propel the demand for sensors.
• Although the integration of sensors increases the industrial automation level, it incurs an additional cost, which limits the use in cost-sensitive applications. In addition, the high development costs involved in the R&D activities to manufacture new products are a critical challenge, mainly for the cash-deficient small and medium-sized sensor manufacturers.
• The government instructions, like social distancing and lockdowns during the COVID-19 pandemic, pushed industries to adopt robots to continue the production flow by following government instructions. For instance, according to the World Robotics 2021 report by IFR, the electrical and electronic industry witnessed the largest installation of industrial robots, 109,000 in 2020, increasing significantly after its decline from 89,000 in the previous years.

Sensor Market Trends

Emergence of Automation and Industry 4.0 to Drive the Market

• The key attributes that sensors offer to support the intelligent industry are accuracy, dependability, and longevity. For Industry 4.0, sensors can be applied in early failure detection and predictive maintenance systems where vibration, temperature, pressure, sound, and acoustics analyses are needed, thus driving their usage in automation and Industry 4.0 applications.
• Due to Industry 4.0 and the acceptance of the IoT, massive shifts in manufacturing require enterprises to adopt agile, more intelligent, and innovative ways to advance production with technologies that complement and augment human labor with automation and reduce industrial accidents caused by process failure. With the high adoption rate of connected devices and sensors and the enabling of M2M communication, there has been an increase in the number of data points generated in the manufacturing industry.
• According to Cisco, by 2023, machine-to-machine (M2M) connections that support IoT applications are expected to account for over half of the world’s 14.7 billion connected devices. Manufacturers worldwide also understand that the next generation of robotics and automation technologies is a revolutionary opportunity to upgrade manufacturing in terms of productivity, quality, safety, and cost metrics. In addition, increased year-on-year robotic automation expenditures mainly expand the scope of the studied market.
• The market is also getting increasingly competitive, with various established and new players developing and launching more unique products in the automation market. For instance, in July 2022, Universal Robots unveiled a 20 kg payload cobot to help machines with heavy lifting. The launch of these more potent, faster, and more capable cobots aims at accelerating the company's expansion in high-growth segments, including healthcare, consumer goods, electronics, food and beverage, logistics, etc., meeting the rising demand for automation across numerous industries.
• Industry 4.0 (smart manufacturing) is widely accepted and incorporated across industries, such as healthcare, oil and gas, mining, automotive, and semiconductor. For instance, Infineon, a key player in the semiconductor industry, announced an investment of USD 105 million over the course of five years (2017–2022) in its plant in Singapore to turn it into an intelligent factory. Robot manufacturers, such as KUKA, automated their plants to reduce the number of issues on the work floor and the operational cost.
• Therefore, the robust growth in automation across industries, coupled with the growing Industry 4.0 efforts, is anticipated to drive the market over the forecast period.

Asia-Pacific Expected to Dominate the Market

• Due to the presence of significant consumer electronics manufacturers in this region, analysts predict that Asia-Pacific will dominate the sensors market. The market is anticipated to be driven by increasing smartphone penetration, 5G penetration, and advancements across numerous end-user industries. China, South Korea, Japan, and India, among others, are major Asia-Pacific countries. ​
• Moreover, the promise of smart cities has captivated the APAC region's technology industry. As per the recent report by Equinix, "Smart Cities: Shifting Asia," UBS projects that APAC is likely to account for 40% of the global addressable market growth for smart city projects, or USD 800 billion, by 2025. This rapid urbanization is driving IT buildout and interconnection bandwidth growth to sustain APAC's expanding digital market. As a result, smart city applications like smart grids and buildings, air and water monitoring, smart transportation, smart waste collection, and disaster response are likely to expand the opportunity areas for the sensor market.
• Notably, the Chinese government views its automotive industry, including the auto parts sector, as one of its most prominent industries. The Chinese government expects China's automobile output to reach 35 million units by 2025. This is intended to make the automotive sector one of the most prominent uses of MEMS sensors in China. China recently instructed automakers to sell 40% more electric vehicles (EVs) than conventional vehicles by 2030. As per the International Organization of Motor Vehicle Manufacturers (OCIA), the total production of automobiles (including cars and commercial vehicles) in India increased by 30% and in Indonesia by 63%. In response to such growth potential, various companies have been expanding their presence in the Asia-Pacific region.
• Additionally, because of the presence of significant manufacturers, the region is among the biggest consumer electronics markets. The demand for sensors is anticipated to increase as the consumer electronics industry expands in several countries. India, for instance, is one of the major global markets for consumer goods and the newest technology. The India Brand Equity Foundation (IBEF) predicted that the market for Indian appliances and consumer electronics (ACE) would grow at a 9% CAGR to reach INR 3.15 trillion (USD 48.37 billion) in 2022. Such numbers are estimated to drive the growth of product launches in the region.
• For instance, in June 2022, Sony Group announced its plan to enhance its image sensor technology to expand its product portfolio and strengthen its market position. The company has been investing in its R&D capabilities to provide its customers with a solution for focusing on multiple targets when taking a picture via a smartphone. Such infinitives by the companies in the market are expected to increase the demand for sensors in a smartphone, thereby fueling the demand growth for sensors in the Asia-Pacific region.

Sensor Industry Overview

The increasing presence of prominent manufacturers in the sensor industry is expected to intensify competitive rivalry during the forecast period. Market incumbents, such as Texas Instruments Incorporated, TE Connectivity Inc., Omega Engineering Inc., etc., considerably influence the overall market. These firms have continuously expanded their operations by focusing on market expansions and acquisitions. Continuous product launches and technological upgrades effectively set the ball rolling regarding overall market growth in the sensor sector. ​

In January 2023, Texas Instruments (TI) collaborated with D3 for the launch of their DesignCore RS-1843AOPC and RS-6843AOPC mm-wave radar sensors. These were new versions that facilitated the implementation of many different mm-wave radar algorithms to measure, detect, and track. Moreover, the production-intent sensors feature a 1-inch cube form factor, a heat-spreading metal body, and mounting tabs. They may be used with a PC or embedded platform to provide field testing, sensing evaluation, algorithm development, and application demonstrations. Automotive applications supported by these sensors include parking assist and collision avoidance, followed by industrial applications supported by these sensors, including robotics, autonomous machines, industrial vehicle systems, and facility monitoring. The sensors can also be used in many other use cases with a tethered host processor or stand-alone.

In January 2023, Ams OSRAM launched its new product, the Mira050, a 2.3 x 2.8 mm, 0.5 Mpixel pipelined, high-sensitivity, global shutter CMOS image sensor. Due to the Mira050's high sensitivity to visible and near-infrared (NIR) light, wearable and mobile devices' size and power consumption can be decreased. The Mira050 can be used for 3D depth sensing for face recognition in smart door locks, eye tracking, gesture tracking, and contextual awareness in AR, VR, and MR headsets.

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