Encoder Market Forecasts to 2028 – Global Analysis By Type (Rotary and Linear), Technology (Optical, Photoelectric, Magnetic and Other Technologies), Level Of Automation (Semi-Autonomous Trucks and Autonomous Trucks), Signal Type (Absolute and Incremental

Encoder Market Forecasts to 2028 – Global Analysis By Type (Rotary and Linear), Technology (Optical, Photoelectric, Magnetic and Other Technologies), Level Of Automation (Semi-Autonomous Trucks and Autonomous Trucks), Signal Type (Absolute and Incremental), End User and By Geography

According to Stratistics MRC, the Global Encoder Market is accounted for $2.7 billion in 2022 and is expected to reach $5.2 billion by 2028 growing at a CAGR of 11.7% during the forecast period. A device or process that translates data from one format to another is known as an encoder. An encoder is a device in position sensing that detects and converts mechanical motion to an analogue or digital coded output signal. More specifically, it measures position, from which velocity, acceleration, and direction can be calculated in either linear or rotary movement. Encoder functionality varies due to differences in physical principles of operation, outputs, communication protocols, and other factors. Encoders are essential components in all mechanical systems. They are particularly common in industrial environments where massive machinery conducts repetitive chores, high-precision prototyping, or sensitive labour.

According to a report by the IFR (International Federation of Robotics), Asia is the world’s largest market for industrial robots; 74% of all newly deployed robots in 2021 were installed in Asia, compared to 70% in the previous year.

Market Dynamics

Driver:

Growing demand for high-end automation

As automation becomes more prevalent in all industries, the use of encoders for a variety of applications grows. Encoders are employed in a variety of applications, including linear measurement, web tensioning, registration mark timing, backstop gauging, filling, conveying, and so on. Similarly, in industry, half of the electricity is utilised to power electric motors, hence the majority of these electric motors employ encoders to monitor or control the motor's functions. Additionally, encoders are employed in robotics, whether it is an articulating arm used in a manufacturing plant or a guided robot as a result, the encoder is employed in a variety of implementations where force sensing is required this adjustment is critical for precise control of the robotic system which boosts the market growth.

Restraint

Errors related to accuracy

Encoders are at the heart of any closed-loop servo system, providing feedback to the controller, which utilises this information to assess whether or not the motor has reached the specified position or velocity. The difference between the true position of the device being measured and the position indicated by the encoder is referred to as accuracy. Many interconnected parameters influence encoder accuracy. They include the width and spacing of lines on the encoder disc or units that may produce a tiny inaccuracy in the timing of the encoder's pulses. It is not possible to add more lines or patterns to the code disc after an encoder has been created. Inconsistent width and or spacing cause mistakes in pulse timing. The precision with which the pattern is set on the code disc influences accuracy in absolute encoders.

Opportunity

Increasing adoption for learning algorithms and artificially intelligent solutions

Traditional systems around the world are moving towards Industry 4.0, often known as the fourth industrial revolution. Industry 4.0 will enable physical equipment or machines to interface with control systems and behave autonomously by utilising machine learning and artificial intelligence. Customers may, for example, return defective goods with a scratch or a food item that has beyond its expiration date. In an era when retaining consumer trust is crucial, flaws can harm a brand's or retailer's credibility. As a result, many businesses have adopted artificial intelligence (AI) and automation to improve supply chain efficiency, inventory and order accuracy, and quality control thus providing wide range of opportunities in the future growth of the market

Threat

Failures of mechanical components in severe settings

Encoder failure in severe settings is caused by solid particle or liquid contamination, mechanical bearing overload, and signal output failure. Either of these causes the encoder to stop working or the system to behave strangely. Similarly, encoders are frequently exposed to particulates such as sand, salt, small wood chips, and dust particles. These particles penetrate the encoders and obstruct the optical processing, causing the device to fail. Even industrial encoders with high IP ratings will not last long in such environments. Hence, the usage of encoders in hostile environments such as encoder failure occurs when moisture, excessive temperature, salt spray, chemical, and vibration levels exceed the limit.

Covid-19 Impact

The COVID-19 pandemic has had a significant impact on the encoder industry. With governments in various countries implementing and prolonging lockdowns, industry and manufacturing facilities around the world have been shut down due to the crisis and a lack of labour. Taking into account the inputs of various industry experts from various stages of the value chain, such as OEMs, suppliers, integrators, end users, and distributors, as well as the financial releases of various companies in the encoder ecosystem, it is estimated that the market has declined during Covid 19.

The Absolute segment is expected to be the largest during the forecast period

The Absolute segment is estimated to have a lucrative growth, due to incremental encoders measure the change in angular position. If the encoder has to move or go through a wake and shake process to ascertain its position, it is incremental. It is absolute if it outputs its true position without movement. Absolute encoders are utilised in a wide variety of applications that need mechanical system monitoring, control, or both. These applications include surgical robots, diagnostic imaging, radiation therapy, and satellite communications. Absolute encoders have advantages such as not requiring a battery backup to minimise data loss, and they have many features such as scaling. Hence all the above factors boost the market growth.

The Industrial segment is expected to have the highest CAGR during the forecast period

The Industrial segment is anticipated to witness the fastest CAGR growth during the forecast period, due to the operating environment and the precision required by the application. Despite this, an industrial encoder is one of the most popular alternatives for most applications due to its balance of durability and performance. They are extremely durable under high temperatures, with particles, moisture, and pollutants, and when subjected to shock or vibration. They also outperform in terms of speed. Heavy duty encoders are the ideal choice for the most demanding settings, including paper, steel, and ore mills where contamination is frequent and shock and heat impact the motor, aerospace stress, and quick manufacturing operations in food and beverage processing which propel the market growth.

Region with largest share

Asia Pacific is projected to hold the largest market share during the forecast period owing to the growing industrialization and demand for better manufacturing process solutions are propelling the market forward at a quick rate. As Asia is home to major industrial hubs such as Japan, China, and India, expanding manufacturing facilities and service agreements with firms are also fuelling industry expansion. Furthermore, the presence of numerous major automobile manufacturers in the country, South Korea has retained its status as one of the world's top automotive production countries and one of the leading automotive exporters.

Region with highest CAGR

Europe is projected to have the highest CAGR over the forecast period, owing to the expansion of manufacturing and engineering centres associated to numerous industries has contributed to the growth of the encoder market in Europe. Germany has had remarkable industrial expansion over the last two decades and has surpassed the United States to become the world's greatest producer of manufactured goods. Additionally, strong economic expansion and the formation of numerous small and medium-sized businesses are contributing to an increase in demand for low-end MFPs in Germany, resulting in the growth of the encoder market.

Key players in the market

Some of the key players profiled in the Encoder Market include Renishaw plc, FRABA B.V, Sensata Technologies Holding plc, IFM Electronics Gmbh, Fortive, Tamagawa Seiki Co., Ltd., Pilz GmbH & Co. KG, Baumer Group, Mitutoyo Corporation, Koyo Electronics Industries Co., Ltd, Omron Corporation, Rockwell Automation, Inc, Hengstler GmbH, Kubler Group, Elap srl, Nemicon Corporation, Gurley Precision Instruments, Schneider Electric SE, Maxon Motor AG and Pepperl+Fuchs SE

Key Developments

In Feb 2023, Renishaw hosts launch of Welsh Government’s new innovation strategy, During the launch event at the Company's manufacturing site in Miskin, near Cardiff, the Welsh Government outlined its aspiration to become an innovation-based nation and bring better healthcare, jobs and prosperity for businesses and local communities.

In Nov 2022, Renishaw launches innovative CENTRUM™ metal rotary scale for ATOM DX™ encoder series, after an intensive research and development effort at Renishaw, rotary RCDM glass scales are now joined by CENTRUM stainless steel self-centring discs.

In July 2022, Renishaw launches the inLux™ SEM Raman interface, Adding the inLux interface to your SEM enables in situ Raman spectroscopy which provides highly specific chemical and structural characterisation to complement your SEM information.

In Jan 2023, Sensata Technologies Launched Sensata INSIGHTS Proprietary Platform that Provides End-to-End IoT Solutions. Sensata INSIGHTS provides better data for customers to fully maximize the IoT ecosystem with end-to-end solutions that span the entire supply chain including logistics, telematics and worksite monitoring and management.

Types Covered:
• Rotary
• Linear

Technologies Covered:
• Optical
• Photoelectric
• Magnetic
• Other Technologies

Signal Types Covered:
• Absolute
• Incremental

End Users Covered:
• Electronics
• Textile
• Automotive
• Industrial
• Medical
• Printing Machinery
• Other End Users

Regions Covered:
• North America
US
Canada
Mexico
• Europe
Germany
UK
Italy
France
Spain
Rest of Europe
• Asia Pacific
Japan
China
India
Australia
New Zealand
South Korea
Rest of Asia Pacific
• South America
Argentina
Brazil
Chile
Rest of South America
• Middle East & Africa
Saudi Arabia
UAE
Qatar
South Africa
Rest of Middle East & Africa

What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2020, 2021, 2022, 2025, and 2028
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements