The global encoder market was valued at $2.3 billion in 2021, and is projected to reach $5.1 billion by 2031, growing at a CAGR of 8.4% from 2022 to 2031.
An encoder is a device or process that converts data from one format to another. In position sensing, an encoder is a device that can detect and convert mechanical motion to an analog or digital coded output signal. More specifically, it measures the position, while velocity, acceleration, and direction can be derived from the position, in either linear or rotary movement. Different functionality of encoders comes from different physical principles of operation, outputs, communication protocols, and more. Encoders are critical components in all kinds of mechanical systems. They are especially prevalent in industrial settings where large machinery performs repeatable tasks, high-precision prototyping or delicate work. Encoders play a vital role in the production of advanced electronics, automation industry, robotics, healthcare, and other sectors. Encoders serve the same general purpose of measuring motion and signaling feedback, but their configurations, capabilities, and applications vary widely.
The encoder market is segmented into by Type, by Technology and by Industry Vertical.
By type, the market is divided into rotary and linear. The rotary segment was the highest revenue contributor to the market in 2021.
The technology segment is divided into optical, photoelectric, magnetic, and others. The magnetic segment is expected to be the most lucrative segment during the forcast period.
The industry vertical segment is divided into industrial, healthcare, printing machinery, textile, and others. The industrial segment was the highest revenue contributor to the market in 2021.
Region-wise, the encoder market trends are analyzed across North America (the U.S., Canada, and Mexico), Europe (UK, Germany, France, Italy, Spain, Russia, Netherlands, Belgium, Poland, and rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Australia, Malaysia, Thailand, Philippines, Indonesia, and rest of Asia-Pacific), and LAMEA (Latin America, the Middle East, and Africa). Asia-Pacific remains a significant participant in the global encoder industry. Major organizations and government institutions in the country are intensely putting resources into the technology.
The need for automation by manufacturers across industries has been the key demand driver for encoders since they are used in automation to provide precise speed and direction to ensure that whatever the motor is driving runs safely and smoothly. Accurate motor speed tracking ensures optimum machine performance and operation and is designed to prevent motor burnout or machine shutdown. Thus, in automation, encoders help improve the overall equipment effectiveness (OEE) by monitoring the energy and working conditions of machines. 24/7 connectivity to production lines is also an important requirement across the food & beverage, pharmaceutical, automotive, and chemical industries. With mid-sized and large manufacturing plants implementing automation solutions, encoders are being adopted on a large scale for better utilization of assets, controlling the quality of end products, and minimization of errors.
One of the notable factors that positively affect the encoder market share include rise in adoption of encoders for communication between controls & monitoring of machines. Moreover, increase in need for high-end automation across industries is expected to drive the growth of the encoder market size. However, variations in international regulations are expected to hinder the encoder market growth. On the contrary, increasing demand for artificial intelligence-based systems is expected to offer huge market opportunities in the coming years.
Competitive analysis and profiles of the major encoder industry players and innovators such as Alps Alpine Co., Ltd., Bourns, Inc., Broadcom, CUI Devices, Dynapar, ELCO Holding, FENAC, FRABA B.V., Grayhill Inc., HEIDENHAIN, Omron Corporation, Panasonic Corporation, Rockwell Automation, Inc., Schneider Electric, Sensata Technologies, Inc., TE Connectivity, and TT Electronics are provided in this report.
Key Benefits For Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the encoder market analysis from 2021 to 2031 to identify the prevailing encoder market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the encoder market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global encoder market trends, key players, market segments, application areas, encoder market forecast and market growth strategies.
Encoder Market Report Highlights
| Aspects | Details |
 Market Size By 2031 | USD 5.1 billion |
 Growth Rate | CAGR of 8.4% |
 Forecast period | 2021 - 2031 |
 Report Pages | 266 |
 By Type |
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 By Technology |
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 By Industry Vertical |
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 By Region |
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 Key Market Players | ELCO Holding, FENAC / Fenac Technology / Fenac Engineering, Rockwell Automation, Inc., CUI Devices, TE Connectivity, Panasonic Corporation, Sensata Technologies, Inc., Dynapar, TT Electronics , Omron Corporation, Bourns, Inc. , Grayhill Inc. , HEIDENHAIN, Schneider Electric, Alps Alpine Co., Ltd., FRABA B.V., Broadcom Inc. |
Analyst Review
The encoder market is expected to leverage high potential for industrial and healthcare industry verticals. The current business scenario has witnessed increase in demand for encoders, particularly in developing regions, owing to rising adoption of encoders for communication between controls & monitoring of machines. Companies in this industry have adopted various innovative techniques, such as mergers and acquisitions to strengthen their business position in the competitive matrix.
The encoder market has steadily gained traction, owing to rise in demand for enhanced technologies in high-end automation across industries and integration of IoT, AI, in different industrial applications, including manufacturing, and others.
Moreover, surge in industrialization, coupled with increasing demand for automated industrial machines and robotics are some of the additional factors anticipated to drive the market growth during the forecast period.
The key players profiled in the report include encoder market players, such as Alps Alpine Co., Ltd., Bourns, Inc., Broadcom, CUI Devices, Dynapar, ELCO Holding, FENAC, FRABA B.V., Grayhill Inc., HEIDENHAIN, Omron Corporation, Panasonic Corporation, Rockwell Automation, Inc., Schneider Electric, Sensata Technologies, Inc., TE Connectivity, and TT Electronics.
Industrial application including manufacturing, automotive and others is considered to be the leading application of Encoder Market.
Asia-Pacific region is projected to be the largest regional market for Encoder.
The global encoder market was valued at $2,312.3 million in 2021.
The top companies to hold the market share in Encoder are Alps Alpine Co., Ltd., Bourns, Inc., Broadcom, CUI Devices, Dynapar, ELCO Holding, FENAC, FRABA B.V. and others.
The Encoder Market is expected to grow at a CAGR of 8.41 % during the forecast period.
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