The global market size for industrial automation is projected to exhibit growth in the next 3-5 years, mainly driven by the increasing adoption of the fourth industrial revolution (industry 4.0) and the fifth-generation wireless technology (5G). On the other hand, China is one of the countries in the Asia Pacific (APAC) forecast to exhibit significant growth for the 2020-2027 forecast period following the growing adoption of the internet of things (IoT). Some technological trends dominating the industrial automation market include the adoption of digital twins, industrial augmented reality, and industrial IoT.
Industrial Automation Market Size: Global
- STMicroelectronics interchanges industrial automation with factory automation which is defined as “the use of set technologies, including various industrial communication systems, and automatic control devices, such as programmable logic controllers (PLCs), industrial personal computers (PCs), programmable automation controllers (PACs), etc, that result in the automatic operation and control of industrial processes without significant human intervention, therefore, achieving superior performance than manual control.”
- According to Fortune Business Insights, the global industrial automation market size was valued at $168.81 billion in 2019 and $157.04 billion in 2018 and is expected to grow at a CAGR of 8.9% to reach $326.14 in 2027.
- Markets and Markets values the 2020 global industrial control and factory automation market size at $151.8 billion and projects its growth at an 8.6% CAGR for the 2020-2025 forecast period to reach $229.3 billion by 2025.
- The graph below illustrates Markets and Markets‘ industry valuation and forecast, including some factors driving the growth of the market.
- By industry analysis, the industrial automation market is divided into discrete, including automotive, electronics, heavy manufacturing, aerospace and defense, packaging, and high tech and process, including oil & gas, chemicals, pulp & paper, mining and metals, healthcare, pharmaceuticals, and petroleum.
- The discrete segment of the industry is forecast to dominate the industrial automation market, driven by increased demand for the ease in manufacturing processes, particularly in the automotive, heavy manufacturing, and electronics industry.
- On the other hand, Statista forecasts the process automation segment of the industry to make up around $83 billion of the 2021 global automation market, with significant growth in 3D printing, artificial intelligence, and drones. Industrial software is expected to make up $43 billion of the industry’s market size in 2021.
- By component analysis, the market is divided into software and hardware, which includes sensors (photoelectric, laser, inductive, etc), PLC, human-machine interface (HMI), servo, including motor (AC and DC) and drive, laser markers, safety light curtain, and robots.
- The graph below provides a visual illustration of the industrial automation market by hardware components, including the percentage share for sensors.
- One of the key drivers in this market is the increasing adoption of the fourth industrial revolution (industry 4.0) propelling the demand for automation across various industries. Fifth-generation wireless technology (5G), is another key driver in the market facilitating the multi-machines control capabilities by one central resource rather than a single control operating approach.
- The main restraining factor for the industrial automation market is the initial capital investments which are too high barring small scale manufacturers from adopting automation solutions. Additionally, the fragmented nature of the industry complicates predictions for the return on investments (ROI).
- COVID-19 has also significantly impacted the manufacturing industry following the closure of plants and factories, prompting large industrial organizations, the potential automation technology customers, to reduce their capital expenditures, in line with the decline in material and consumer demand.
- Some key players in this market include ABB Ltd. (Zürich, Switzerland), Emerson Electric Co. (Missouri, United States), General Electric Company (Massachusetts, United States), Honeywell International Inc. (North Carolina, United States), Mitsubishi Electric Corporation (Tokyo, Japan), Omron Corporation (Kyoto, Japan), Schneider Electric SE (Rueil-Malmaison, France), Siemens AG (Munich, Germany), and Yokogawa Electric Corporation (Tokyo, Japan).
- To achieve potential growth, the key players in the industrial automation market are developing innovative applications within the robotics and automation solutions landscape. For instance, in June 2018, Rockwell Automation and PTC entered into a strategic partnership where Rockwell Automation made a $1 billion equity investment in PTC to align PTC’s Vuforia augmented reality (AR), Thingworx Internet of Things (IoT), and Kepware industrial connectivity with Rockwell’s FactoryTalk MES, FactoryTalk Analytics, and other automation platforms.
- ABB Ltd also invests approximately 5% of its sales in research and development to drive the expansion of its product range, particularly, within machine-centric robotics, digital factory automation, artificial intelligence, and collaborative robotics.
Industrial Automation Market Size: China
- The market size for China’s factory automation and industrial controls was forecast to reach $25.92 billion by the end of 2021, growing at a CAGR of 9.35% from the 2015 market size of $16.58 billion for the 2015-2021 forecast period.
- However, the industry is expected to demonstrate moderate growth due to the impact of COVID-19 which has significantly impacted the manufacturing industry. The purchasing manager index (PMI) for China fell from 52% to 35.7% in February 2020, indicating a decline in the country’s manufacturing activity, with further declines anticipated post-COVID-19.
- Although Europe is expected to continue dominating the market by region, the Asia Pacific (APAC) is forecast to exhibit significant growth for the 2020-2027 forecast period following the growing adoption of the internet of things (IoT). China is one of the countries in the region manufacturing most of the sensors, microchips, and other components in the IoT landscape.
- AXA SA, the French multinational insurance firm, predicts that around 200 billion connected devices and IoT components are likely to be manufactured globally with 95% coming from China.
- The key driver behind China’s adoption of factory automation is the growing demand for various industrial products prompting the country’s manufacturers to meet deadlines under intense pressure. According to Mordor Intelligence, one indication of the country’s growing investment in automation is the increase in demand for robotics and machine tools in the country. The International Federation of Robotics (IFR) reports that Chinese companies installed 154,000 robots in 2018 compared to the US and Japan, which installed 40,400 and 55,200, respectively.
- The graph below illustrates the 2018 distribution of industrial robot installations across various regions.
- Additionally, according to Market Research Future, the governments in the APAC region are proactively taking initiatives to expand support towards the adoption of industry 4.0, with the growth of the semiconductor industry resulting in increased demand for automation in manufacturing plants.
Industrial Automation Technology Trends
1. Digital Twins
- Digital twins are software design patterns designed to represent virtual replicas of physical devices to understand the object’s state, respond to its changes, and improve business operations, including running simulations before the building and deployment of actual devices and the optimization of technologies such as IoT, AI, and analytics.
- Although the concept of digital twins has been around since 2002, the increasing availability of technologies such as IoT-enabled devices, bandwidth, and data interpretation software has made it more accessible and affordable, driving its adoption among manufacturers and other companies.
- According to a survey conducted by Gartner in 2019, 75% of companies implementing IoT use the digital twins’ technology, are in the process of establishing its use, or plan to do so within a year.
- One example of what companies in the industrial automation market are doing in response to the trend is Rockwell Automation and Ansys’ strategic partnership to drive operational efficiency for customers by troubleshooting possible product hitches. According to Ansys, “once a machine or production line is running, manufacturers can create a digital twin of their full manufacturing process to create and test virtual “what-if” scenarios. For example, by using runtime models generated from Ansys® Twin Builder™, industrial companies can adapt to the market demands with more agility and minimize risk. This is crucial in the industrial space, where manufacturers need to change line configurations quickly to adjust to market demands. Now customers can understand an outcome without disrupting physical assets, resulting in faster time-to-market and large cost savings.”
2. AR Technology
- Industrial augmented reality (IAR) relates to the application of AR in the support of industrial processes to enable real-time visualization of IoT data, with various manufacturers leveraging the technology to upskill their workforce for the handling of digitized operations.
- Although the technology’s deployment is in its early stages, it has gained a growing adoption among key players in the industrial automation market, including Honeywell, BP, Boeing, and Ford.
- Market players integrate industrial AR with their manufacturing tools, most commonly using mobile phones or tablets instead of dedicated headsets or AR glasses.
- One example of what companies in the industrial automation market are doing in response to the trend is Emerson’s integration of AR technology to Plantweb optics, its asset performance platform, in June 2020. The integration enables Emerson to deliver real-time analytics & diagnostics and live remote support to its plant workers.
3. Industrial IoT
- The Industrial IoT ecosystem has been significantly impacted by various recent technological developments, including high speed and low latency internet speeds, AI, IoT, big data, and data analytics, enabling manufacturers to increase productivity by streamlining and automating manufacturing processes.
- The combined use of industrial IoT with AI, cloud computing, and advanced data analytics, enables real-time monitoring of production lines and data interpretation to manage infrastructure and mitigate risks, which is predicted to likely drive the industrial automation market in the coming years.
- A report by Berg Insight indicates that the number of wireless IoT device base installations in industrial automation globally amounted to 21.3 million in 2018 and is forecast to continue growing to reach 50.3 million by 2023.
- The graph below illustrates the growing trend for the 2017-2023 forecast period.
- One example of what companies in the market are doing in response to the trend is IXON’s industrial IoT platform solutions that enable companies to gain insight, for instance, into a robot’s data and receive notifications about important events, joint status, robot status, and temperatures of various components.