Smart Factory Market Outlook 2031
The global smart factory market size was valued at USD 86.2 Billion in 2022 and is expected to reach USD 208.30 Billion by 2031, expanding at a CAGR of 10.3% during the forecast period, 2023 and 2031. The growth of this market is attributed to the development of innovative industrial-based technology and the wide adoption of intelligent devices across several industries such as manufacturing, petrochemicals, and mining.
Smart factory adopts a variety of digital solutions to make production effective and optimize the performance of their business operation. Digital solutions including the Internet of Things (IoT), augmented reality (AR), and artificial intelligence (AI) are revolutionizing manufacturing units. These solutions offer intelligent inputs, which boost the demand for smart factories as a service. For instance,
- In July 2023, HPE, Relimetrics, and NVIDIA partnered to automate quality control with AI-based video analytics in a Europe-based manufacturing facility. This automated manufacturing quality analysis reduces defects, enhances the manufacturing process, and improves inspection speed by 96 seconds per server.
Internet-enabled high-tech machinery and equipment in smart factories ease data collection and sharing digitally. These technological advancements help in developing advanced sensing components sensors and actuators for the use in the industrial setup, which offer certain advantages such as growing self-sufficiency with less power consumption and incorporated computing abilities.
The research reports find that the COVID-19 pandemic boosts the smart factory market. Governments implemented lockdowns to curb the spread of the virus thus, the movement restrictions and physical distancing measures hampered production activity and made it difficult to maintain industries. Thus, majorly during the pandemic crisis, various companies incorporated advanced equipment, industrial robots, and refurbished robots to increase work efficiency and reduce manufacturing operations costs.
- As per the British Automation and Robot Association (BARA), the demand for individual robots from domestic food and beverage manufacturers increased by about 21% as compared to that in the past years. Robotics and automation are proving to be useful for manufacturers. Therefore, the adoption and incorporation of smart factory solutions that is equipment and technologies trend is expected to continue during the post-COVID-19 period to overcome manufacturing difficulties.
Smart Factory Market Dynamics
Major Drivers
Factors such as real-time quality, easy handling of data sharing, and effective operation performance are key factors projected to expand the market. Furthermore, the growing focus on low-energy consumption besides the manufacturing efficiency of a business enterprise, which is expected to boost the market during the forecast period. For instance,
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In February 2023, Emerson launched Ovation Green, a dedicated renewable power technology and software portfolio. This portfolio is expected to help power generation companies by combining its extensive and renewable energy capabilities into its Ovation Green Portfolio. Furthermore, Emerson developed a power-based control architecture by combining Meta-Teknik software and technology with its Ovation automation platform, remote management capabilities, extensive renewable energy knowledge base, and cybersecurity solutions.
Existing Restraints
High software system costs, sensitivity of cyber-physical system security threats, lack of standardization and interoperability along with shortage of skilled workers are key challenges anticipated to hinder the market during the forecast period. Furthermore, several companies are facing difficulty regarding the implementation of advanced technologies due to the high capital investments for transformations.
Emerging Opportunities
Increasing adoption of enhanced network systems, including the use of programmable logic control (PLC) units and developed software are projected to offer lucrative opportunities for the expansion of the market. Moreover, innovative technology provides a range of integrated computing and automation solutions that can offer effective operations along with reducing operational costs.
With the surge in technological, expansion in intelligent electronic sensing, communication, and control, factory automation helps improve the overall development of the business operation, which results in improving efficiency and supplying high-end products to customers.
Scope of Smart Factory Market Report
The market report includes an assessment of the market trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Smart Factory Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Technology (Data Acquisition Systems, 3D Printing Technology, Enterprise Resource Planning, Industrial Control Systems, Industrial Logistics, Manufacturing Execution System, Product Life Cycle Management, and Supervisory Control), Field Device (Articulated Robots, Control Devices, Industrial Networks, and Industrial Robotics), and Application (Automotive, Electronics & Electrical, Food & Beverages, Mining Materials, and Pharmaceuticals)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, Market Trends, and Revenue Forecast
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Key Players Covered in the Report
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ABB Ltd., Apriso Corporation, CMC Associates, General Electric Co., Invensys PLC, Johnson Controls Inc., Microsoft, Mitsubishi Electric Corporation, Rockwell Automation, Siemens AG, System Insights Inc., and Ubisense Group PLC
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Smart Factory Market Segment Insights
Technology Segment Analysis
Based on technology, the smart factory market is divided into data acquisition systems, 3D printing technology, enterprise resource planning (ERP), industrial control system, industrial logistics, manufacturing execution systems (MES), product life cycle management (PLM), and supervisory control. The ERP segment is expected to register a high revenue share in the coming years, owing to the high use of software applications for the proper coordination of product processes and its relationships with other functions, activities, or information flow.
The 3D printing technology segment is expected to hold a considerable share of the market during the forecast period, as the use of 3D software simplifies drawing and printing, thus helping smart manufacturers save cost and time. This makes smart factories key purchasers and prominent investors of 3D printing equipment and software. For instance,
- In March 2021, Stratasys, a leading global firm in additive (3D printing) technology solutions, introduced the J5 DentaJet 3D printer. It combines the efficiency of 3D printing with PolyJet’s precision and realism. It is the only multiple-material dental printer that supports lab technicians to load mixed trays of dental parts.
Field Device Segment Analysis
On the basis of field device, the global smart factory market is segmented into articulated robots, control devices, industrial networks, and industrial robotics. The industrial network segment is projected to expand at a significant growth rate in the coming years, owing to the wide adoption of various devices for industrial network applications. Industries need a network that provides them with speed, coverage, and reliability. Several manufacturers are using 5G networks to achieve seamless optimization in real-time.
5G network offers a one-stop solution for smart factories. Smart factory owners can use 5G technology to enhance security and tailor cellular technologies to meet specific use cases. Furthermore, sensors can be installed on machinery linked to 5G networks to extract data from the manufacturing networks without any direct connection to the machines. This allows for smoothly and effortlessly real-time optimization.
The control devices segment is anticipated to constitute a large share of the market in the coming year, owing to the extensive use of various technology for production and process control. Key manufacturers widely use control devices with sensors to gather data such as pressure, temperature, and pH from the environment. This gathered data further helps organize the manufacturing process, business decision-making, and strategic planning.
Application Segment Analysis
Based on application, the market is classified as automotive, electronics & electrical, food & beverages, mining materials, and pharmaceuticals. The automotive segment is expected to represent a key market share in the coming years, owing to the wide adoption of automatic devices in the industry. Rising development of electric vehicles and deployment of industrial robotics for the assembly and manufacturing of automobiles are key drivers for the automotive segment.
The electronics & electrical segment is expected to hold a significant share of the market in the coming years, due to the increasing demand for compact devices such as smartphones, smart wearables, tablets, and IoT devices. The growth of the segment is attributed to the increasing investments in production capacity and automation integration.
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In September 2022, Vedanta, a mining conglomerate, and Foxconn, a Taiwan-based electronics manufacturing giant, made investments of INR 1.54 lakh crore (~USD 1,860 million) to establish India’s inaugural semiconductor plant in Gujrat. This investment is projected to propel the electronics and electrical segment growth.
Regional Analysis
In terms of regions, the global smart factory market is categorized as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is anticipated to dominate the market during the forecast period, owing to the early adoption of digital solutions across industries and the growing adoption of new smart technology, especially in the automotive and healthcare sectors.
The market in the region is expected to grow as multinational companies support industrial technology, including cloud technology and the Internet of Things (IoT). The market in Asia Pacific is projected to expand at a significant CAGR in the coming years, due to the rapid development of several industries impacted by urbanization. Growth in per capita income, increase in population, and rise in the demand for automation in the region are projected to fuel the market in the region.
The industrial automation sector in the region is growing owing to the adoption of digital and physical aspects of the manufacturing industry and the installation of robots on the work floor.
Segments
The global smart factory market has been segmented based on
Technology
- Data Acquisition System
- Enterprise Resource Planning (ERP)
- Industrial Control System
- Industrial Logistics
- Manufacturing Execution System (MES)
- Product Life Cycle Management (PLM)
- Supervisory Control
Field Devices
- Articulated Robots
- Control Devices
- Industrial Network
- Industrial Robotics
Applications
- Automotive
- Electronics & Electrical
- Food & Beverages
- Mining Materials
- Pharmaceuticals
Regions
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
- ABB Ltd.
- Apriso Corporation
- CMC Associates
- General Electric Co.
- Invensys PLC
- Johnson Controls Inc.
- Microsoft
- Mitsubishi Electric Corporation
- Rockwell Automation
- Siemens AG
- System Insights Inc.
- Ubisense Group PLC
Competitive Landscape
Some major participants competing in the global smart factory market include ABB Ltd., Apriso Corporation, CMC Associates, General Electric Co., Invensys PLC, Johnson Controls Inc., Microsoft, Mitsubishi Electric Corporation, Rockwell Automation, Siemens AG, System Insights Inc., and Ubisense Group PLC.
These leading market players are using strategies including mergers, acquisitions, partnerships, new launches, collaborations, and product development to build their strong position in the market. For instance,
- In February 2022, Lantronix, a well-known provider of turnkey solutions for IoT, Taoglas, a principal provider of advanced technology for the smart world, and Thales, a renowned builder and designer of IoT connectivity solutions announced their collaborations and industrial IoT solutions to connect data-dependent vertical industries, to focus on industry 4.0, transportation, and security.
- In September 2022, Shell PLC select Yokogawa Electric Corporation as the primary automation contractor (MAC) for building the Holland Hydrogen I plant in the Rotterdam port. Yokogawa Electric Corporation is expected to closely integrate its systems and equipment to optimize Shell PLC's operations at the plant.
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