Smart Factory Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Smart Factory Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The smart factory market is expected to register a CAGR of 9.15% during the forecast period. The term ‘smart factory’ refers to the various fully integrated automation solutions adopted for manufacturing facilities. Such integration helps streamline the material flow during all the processes involved in manufacturing, thus enabling the effective movement of materials across the factory floor.

• Some prominent factors driving the market include the growing demand for high-quality products (which need proper end-to-end visibility of the manufacturing process), increased adoption of products across several industries, such as robotics systems, and the rising demand for energy conservation.
• Incremental advancement in technology, coupled with a sustained increase in the development of manufacturing facilities, is expected to impact the market growth rate during the forecast period.
• Semiconductor production is another primary adopter of advanced manufacturing techniques. Rising energy prices, several environmental regulations, and the general trend toward sustainable manufacturing are expected to increase the adoption rate of products like machine vision systems, robots, and others, increasing market demand for smart factories.
• According to the British Automation and Robot Association (BARA), the sales of individual robots to domestic food and beverage manufacturers increased by about 21% in 2021 compared to the year before. With automation and robotics proving to be beneficial for manufacturers, a similar adoption trend is expected to continue during the post-COVID-19 period.

• Semiconductor manufacturers rely on smart manufacturing processes to produce higher yields and achieve higher margins. By advancing semiconductor innovation and encouraging the further implementation of innovative technologies powered by advanced chips, manufacturers can ensure that production keeps pace with rising demand as factories become more complex and connected.
• Semiconductor fabrication plants, or fabs, cost billions of dollars to build and maintain. The cost goes on equipment, the maintenance of which is vital to ongoing operation. By using smart manufacturing technologies to monitor equipment health and perform predictive maintenance, fabs can reduce unplanned maintenance time significantly.
• The semiconductor fabrication plants globally are on the rise. Also, the Semiconductor Industry Association reported increased spending on new semiconductor equipment. These factors will also drive the adoption of smart factories in the semiconductor industry. According to Semiconductor Industry Association (SIA), in 2022, semiconductor sales reached USD 580.13 billion worldwide. Semiconductors are crucial components of electronic devices, and the industry is highly competitive. The year-on-year growth rate in 2022 reached 4.4%.
• According to SIA, semiconductor sales in Europe in March 2022 were USD 4.63 billion, up slightly from the previous month's figures, which recorded USD 4.51 billion.
• In addition, in September 2022, Mining conglomerate Vedanta and Taiwanese electronics manufacturing giant Foxconn made one of the largest ever investments of INR 1.54 lakh crore (~USD 1,860 million) to set up India's first semiconductor plant in Gujarat. Such investment may further create significant demand in the studied market.

• China has led the industrial robot market, which has driven its way to smart factory automation in the region and is one of the leading manufacturing countries in the Asia-Pacific and globally. The increase in the shipment of industrial robots in the country and the adoption of various Industrial Control Systems across the country facilitates factory automation at scale.
• Manufacturing has emerged as one of the high-growth sectors in India. The Make in India program places India on the world map as a manufacturing hub and globally recognizes the Indian economy. The Made in India campaign has bolstered multiple new launches in industrial robots in the country.
• India's industrial automation sector has been revolutionized by the combination of digital and physical aspects of manufacturing to deliver optimum performance. The focus on achieving zero waste production and a shorter time to reach the market has augmented the market's growth.
• Japan has a predominant market share in the robot manufacturing industry and has installed methods where industrial robots are used to assemble robots. The country also houses multiple leading companies like Nippon, responsible for 47% of the global robot production, as per IFR.
• With the launches of new products and solutions by multiple companies in the studied market and Japan's preexisting leadership in the robotics and automation industry, the country is expected to hold a prominent position in the forecasted period.

The smart factory market is fragmented, with the presence of major players like ABB Ltd, Cognex Corporation, Siemens AG, Schneider Electric SE, and Yokogawa Electric Corporation. Players in the market are adopting strategies such as partnerships, mergers, innovations, and acquisitions to enhance their product offerings and gain sustainable competitive advantage.

In October 2022, ABB Robotics launched the IRB 1010, the smallest-ever industrial robot. The compact system is developed to help electronics manufacturers improve the production of devices such as smart watches, sensors, earphones, and health trackers.

In September 2022, Shell PLC selected Yokogawa Electric Corporation as a main automation contractor (MAC) for the construction of its Holland Hydrogen I plant in the Dutch port of Rotterdam. The company would optimize Shell PLC’s operation at the plant by closely integrating its equipment and systems.

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