Smart Factory Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Smart Factory Market is segmented by Product (Machine Vision Systems, Industrial Robotics, Control Devices, Sensors, Communication Technologies), Technology (Enterprise Resource Planning, Product Lifecycle Management, Human Machine Interface, Manufacturing Execution System, Distributed Control System, Supervisory Controller, and Data Acquisition, and Programmable Logic Controller), End-user Vertical (Automotive, Semiconductors, Oil and Gas, Chemical and Petroleum, Pharmaceutical, Aerospace and Defense, Food and Beverage, and Mining), and Geography.

Market Snapshot

CAGR
Study Period: 2018 - 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: Asia-Pacific
CAGR: 9.33 %

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Market Overview

The Global Smart Factory Market was valued at USD 270.74 billion in 2020, and it is expected to reach USD 422.88 billion by 2026, registering a CAGR of approximately 9.33% during the forecast period (2021-2026). The COVID-19 outbreak and lockdown restrictions across the globe have affected industrial activities across the world. Some of the effects of lockdown include supply chain disruptions, lack of availability of raw materials used in the manufacturing process, labor shortages, fluctuating prices that could cause the production of the final product to inflate and go beyond budget, shipping problems, etc. Following the global economic recession led by COVID-19, the global smart factory market has witnessed a positive impact from the demand side and a mixed impact from the supply side.

  • Several manufacturing companies are capable of achieving zero waste production and shorter time-to-market. Effortless monitoring, reduction of waste, and speed of production are some of the major advantages of automated manufacturing processes. This technology offers users an improved quality of standardization, as well as dependable products, within the time and at much lower cost.
  • Some of the major factors driving the market include, 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.
  • The adoption of smart systems can reduce the need for human labor, particularly in challenging environments. Quality control processes have historically relied on human intervention, but the greater availability of these smart factory systems, with more user-friendly controls, is expected to gain popularity in complex manufacturing settings.
  • Coupled with the Industrial Internet of Things (IIoT) and smart factories, where industrial devices are connected to each other via the internet, the sheer volume of real-time data (Big Data) would create means for Industry 4.0 to bring about a massive change, in the way modern-day control systems function.
  • Semiconductor production is another major 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, thereby increasing the market demand for the smart factory.

Scope of the Report

A smart factory is an environment where machines and equipment are able to improve processes through automation and self-optimization. The benefits also extend beyond the physical production of goods and into functions, like planning, supply chain logistics, and even product development. The smart factory market is segmented by product type, namely as machine vision systems and industrial robotics, among others, and by technology, which includes SCADA, PLC, and HMI, among others.

By Product
Machine Vision Systems
Cameras
Processors
Software
Enclosures
Frame Grabbers
Integration Services
Lighting
Industrial Robotics
Articulated Robots
Cartesian Robots
Cylindrical Robots
SCARA Robots
Parallel Robots
Collaborative Industry Robots
Control Devices
Relays and Switches
Servo Motors and Drives
Sensors
Communication Technologies
Wired
Wireless
Other Products
By Technology
Product Lifecycle Management (PLM)
Human Machine Interface (HMI)
Enterprise Resource and Planning (ERP)
Manufacturing Execution System (MES)
Distributed Control System (DCS)
Supervisory Controller and Data Acquisition (SCADA)
Programmable Logic Controller (PLC)
Other Technologies
By End-user Industry
Automotive
Semiconductors
Oil and Gas
Chemical and Petrochemical
Pharmaceutical
Aerospace and Defense
Food and Beverage
Mining
Other End-user Industries
Geography
North America
United States
Canada
Europe
United Kingdom
Germany
France
Rest of Europe
Asia Pacific
China
India
Japan
Rest of Asia Pacific
Latin America
Brazil
Argentina
Mexico
Rest of Latin America
Middle East & Africa
United Arab Emirates
Saudi Arabia
South Africa
Rest of Middle East & Africa

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Key Market Trends

Growing Adoption of IoT across the Value Chain Expected to Spur Growth

  • IoT is fruitful in applications, where faster development and real-time monitoring of quality are the vital factors ensuring greater benefits to the end-user. The manufacturing sector is one such end-user where real-time monitoring and feedback are vital for seamless manufacturing operations. IoT has numerous applications in the manufacturing sector. It can facilitate the production course in a plant, as IoT devices can automatically monitor development cycles and manage warehouses and inventories.
  • Massive shifts in manufacturing due to industry 4.0 and acceptance of IoT require enterprises to adopt agile, smarter, and innovative ways to advance production, with technologies that complement and augment human labor with robotics, and reduce industrial accidents caused by a process failure.
  • According to Cisco, by 2022, machine-to-machine (M2M) connections that support IoT applications may account for more than half of the world's 28.5 billion connected devices.
  • The novel IIoT technologies are becoming a key component in helping the manufacturing companies to maximize the ROI from smart factory initiatives. Big data analytics proves to be a useful tool to handle a vast volume of data being generated. With the concept of Industry 4.0, shaping the production establishments in the modern manufacturing industry, the amount of data produced from the manufacturing sector increased exponentially, as data points are created from each process point, varying from temperature, pressure, humidity, stress, strain, and quality.
Smart Factory Market Trends

Asia-Pacific Occupies the Largest Market Share

  • Manufacturing is one of the pillars of China's economy and is undergoing a rapid transformation. As the population ages, along with rising labor costs, the legacy model based on inexpensive migrant workers is no longer sustainable.
  • It is reported that low-end manufacturing firms are moving to Southeast Asia to cut costs, which include automotive and electronics manufacturing companies. It is forecast that in the next five years, the automotive industry will expand 6 to 7%, annually.
  • India is poised to become the fifth-largest manufacturing country in the world by the end of 2020. Moreover, manufacturing giants, such as GE, Siemens, HTC, Toshiba, and Boeing have either set up or are in process of setting up manufacturing plants in India.
  • Japan's supplementary budget for the 2020 fiscal earmarked JPY 23.5 billion for companies that move production to the Southeast Asian countries. By expanding the subsidy program's scope, Japan aims to reduce its dependence on a particular region. It wants to build a system that can provide a stable supply of medical materials and electronic components, even during emergencies. This is expected to drive investment in the smart factory market in the region.
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Competitive Landscape

The smart factory market is a highly competitive market and consists of several major players. In terms of market share, few of the major players currently dominate the market, and the market is moving towards fragmentation. These major players in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging on strategic initiatives, like mergers and acquisitions, partnerships, and product innovation to increase their market shares and profitability. The major players in the market are Siemens Ag, Schneider Electric SE, Honeywell International, and Robert Bosch GmbH, among others.

  • October 2020 - Rockwell Automation, Inc. acquired Oylo, a privately-held industrial cybersecurity services provider based in Barcelona, Spain. Oylo provides a broad range of industrial control system (ICS) cybersecurity services and solutions, including assessments, turnkey implementations, managed services, and incident response.
  • June 2020 - Schneider Electric, expanded its partnerships to address the convergence of IT and OT. Bringing together system integrators with IT solution providers to build integrated industrial edge computing solutions, the expanded partnerships resulted in the immediate release of three programs including: new reference designs, co-developed with AVEVA, and integrating solutions from Lenovo and Stratus; a learning path for system integrators; and a collaborative online community for learning and sharing opportunities within Schneider Electric Exchange.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Buyers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitutes

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Industry Value Chain Analysis

    4. 4.4 Assessment of Impact of Covid-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Growing Adoption of Internet of Things (IoT) Technologies Across the Value Chain

      2. 5.1.2 Rising Demand for Energy Efficiency

    2. 5.2 Market Restraints

      1. 5.2.1 Huge Capital Investments for Transformations

      2. 5.2.2 Vulnerable to Cyber Attacks

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Product

      1. 6.1.1 Machine Vision Systems

        1. 6.1.1.1 Cameras

        2. 6.1.1.2 Processors

        3. 6.1.1.3 Software

        4. 6.1.1.4 Enclosures

        5. 6.1.1.5 Frame Grabbers

        6. 6.1.1.6 Integration Services

        7. 6.1.1.7 Lighting

      2. 6.1.2 Industrial Robotics

        1. 6.1.2.1 Articulated Robots

        2. 6.1.2.2 Cartesian Robots

        3. 6.1.2.3 Cylindrical Robots

        4. 6.1.2.4 SCARA Robots

        5. 6.1.2.5 Parallel Robots

        6. 6.1.2.6 Collaborative Industry Robots

      3. 6.1.3 Control Devices

        1. 6.1.3.1 Relays and Switches

        2. 6.1.3.2 Servo Motors and Drives

      4. 6.1.4 Sensors

      5. 6.1.5 Communication Technologies

        1. 6.1.5.1 Wired

        2. 6.1.5.2 Wireless

      6. 6.1.6 Other Products

    2. 6.2 By Technology

      1. 6.2.1 Product Lifecycle Management (PLM)

      2. 6.2.2 Human Machine Interface (HMI)

      3. 6.2.3 Enterprise Resource and Planning (ERP)

      4. 6.2.4 Manufacturing Execution System (MES)

      5. 6.2.5 Distributed Control System (DCS)

      6. 6.2.6 Supervisory Controller and Data Acquisition (SCADA)

      7. 6.2.7 Programmable Logic Controller (PLC)

      8. 6.2.8 Other Technologies

    3. 6.3 By End-user Industry

      1. 6.3.1 Automotive

      2. 6.3.2 Semiconductors

      3. 6.3.3 Oil and Gas

      4. 6.3.4 Chemical and Petrochemical

      5. 6.3.5 Pharmaceutical

      6. 6.3.6 Aerospace and Defense

      7. 6.3.7 Food and Beverage

      8. 6.3.8 Mining

      9. 6.3.9 Other End-user Industries

    4. 6.4 Geography

      1. 6.4.1 North America

        1. 6.4.1.1 United States

        2. 6.4.1.2 Canada

      2. 6.4.2 Europe

        1. 6.4.2.1 United Kingdom

        2. 6.4.2.2 Germany

        3. 6.4.2.3 France

        4. 6.4.2.4 Rest of Europe

      3. 6.4.3 Asia Pacific

        1. 6.4.3.1 China

        2. 6.4.3.2 India

        3. 6.4.3.3 Japan

        4. 6.4.3.4 Rest of Asia Pacific

      4. 6.4.4 Latin America

        1. 6.4.4.1 Brazil

        2. 6.4.4.2 Argentina

        3. 6.4.4.3 Mexico

        4. 6.4.4.4 Rest of Latin America

      5. 6.4.5 Middle East & Africa

        1. 6.4.5.1 United Arab Emirates

        2. 6.4.5.2 Saudi Arabia

        3. 6.4.5.3 South Africa

        4. 6.4.5.4 Rest of Middle East & Africa

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 ABB Ltd.

      2. 7.1.2 Cognex Corporation

      3. 7.1.3 Siemens AG

      4. 7.1.4 Schneider Electric SE

      5. 7.1.5 Yokogawa Electric Corporation

      6. 7.1.6 Kuka AG

      7. 7.1.7 Rockwell Automation Inc.

      8. 7.1.8 Honeywell International Inc.

      9. 7.1.9 Robert Bosch GmbH

      10. 7.1.10 Mitsubishi Electric Corporation

      11. 7.1.11 Fanuc Corporation

      12. 7.1.12 Emerson Electric Company

      13. 7.1.13 FLIR Systems Inc.

    2. *List Not Exhaustive
  8. 8. Investment Analysis

  9. 9. Future OUTLOOK of the Market

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Frequently Asked Questions

The Smart Factory Market market is studied from 2018 - 2026.

The Smart Factory Market is growing at a CAGR of 9.33% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

Asia-Pacific holds highest share in 2020.

Siemens AG, Robert Bosch GmbH, Honeywell International Inc., Emerson Electric Company, Rockwell Automation Inc. are the major companies operating in Smart Factory Market.

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