Smart Factory Market Size, Share & Trends, COVID-19 Impact Analysis | 2021-2028

Smart Factory Market Size, Share & Trends, COVID-19 Impact Analysis | 2021-2028

From an estimated USD 80.1 billion in 2021, the smart factory market is expected to grow at 11.0% annually between 2021 and 2026. The smart factory market is growing due to rising demand for IoT and artificial Intelligence in industrial environments, increased emphasis on energy efficiency, resource optimization, and cost reduction in production operations. Fiscal policies that keep manufacturing facilities afloat in the face of COVID-19 are also factors.

The Global Smart Factory Market: COVID-19’s Impact

COVID-19’s negative impact on the smart factory market in 2020 led to decreased shipments and revenues from smart factories. The market’s growth trend experienced a decline in the first half of 2020. This trend will likely end in the second half of 2020, as demand for smart automation and energy efficiency is expected to grow.

The value chain for smart factories has been significantly affected by the COVID-19 pandemic. A significant portion of global smart factory manufacturing is concentrated in the US, China, and South Korea. Due to the global slowdown, both the process and discrete industries are experiencing a lower demand. This is likely to persist for the short term.

Market Dynamics

Driver: Growing demand for industrial robots

Industrial robots are used for electronic and mechanical assembly, product test, and material handling. Industrial robots use force sensors to verify part insertion, hold constant force during buffing and polishing, deburring, and collect force data for statistical process control (SPC) and loT testing.

The factors that are driving the market growth in industrial robots include increasing miniaturization of sensors and growing investments in automation (in the automotive, electrical, and electronics industries), as well as rising demand in developing countries for industrial robotics systems. This will increase demand for industrial sensors, and help to grow the smart factory market over the review period.

Restraint: Significant capital investments are required

To transform a traditional manufacturing plant into a smart manufacturing unit, requires large capital investments. These are necessary for the installation of sophisticated machinery, software systems, and IT infrastructure. This is required to ensure the smooth operation of industrial automation equipment like smart field devices and robots. The transformation could create a financial burden for industries in price-sensitive countries like APAC and South America.

Industry experts say that cost is one of the major limiting factors in the transition to a smart factory. This includes the costs associated with upgrading old systems. Due to high costs, it is impossible for many companies to upgrade their systems. Automation software systems in industries need to be maintained and upgraded regularly. This is impossible for small businesses.

Opportunities: There are many developments in wireless sensor networks and their adoption in smart factories.

Wireless sensor networks (WSN) are wireless networks that integrate autonomous distributed devices and sensors to monitor environmental or physical conditions. WSNs can be found in many industries, including oil & gas, pharmaceuticals, and water & wastewater. Oil & Gas plants are often located in remote locations with harsh environmental conditions. A SCADA system is used to monitor, manage, and control the oil & gas plants. The SCADA system uses sensors that are embedded in a WSN. A WSN can be used to reduce the cost of setting up a communication and sensor network. Due to the higher hardware requirements such as routers, cables, networking devices, and routers, wired technology can be more expensive than wireless. A WSN can measure and detect parameters such as temperature, flow, pressure, and levels of fluids and gases in plant operations. A WSN can be used in SCADA, as well as other smart factory solutions and components. This allows for real-time process control and data monitoring. Smart factories will see more applications due to the active adoption of WSN in SCADA and the increasing R&D into WSN. Wireless sensor networks are also able to update their software frequently, making them suitable for current automated systems in industries that use smart factory solutions and components.

Problem: Interoperability of information technology (IT), and operational technology (OT).

Lack of interoperability between IT/OT is the biggest obstacle to implementing smart factory solutions. The complexity and costs of adopting smart factories is significantly increased by the fact that IT and OT have different architectures and protocols. Today’s OT systems work in silos. A smart factory requires a fully functioning digital ecosystem to allow seamless data sharing between machines, and other systems from different manufacturers.

Companies have also invested heavily in durable industrial equipment. End-users have a problem because the equipment is designed to work in isolation. It is necessary to retrofit or replace the equipment to make it compatible with the IIoT ecosystem.

The highest projected CAGR for industrial 3D printers is between 2021 and 2026

The highest expected CAGR for industrial 3D printing is during the forecast period. This segment’s growth can be attributed to its increasing use in various industries, such as aerospace & defense and food & beverage, semiconductor & electronics, and automotive. 3D printing technology is used primarily in the food and beverage industry to make molds for various types of food like chocolates, hard candy, and cakes. This allows for the expansion of the industrial 3D printing market in the food and beverage industry. 3D printing is a popular choice in aerospace and defense, as it can produce light, low-cost parts with high precision. NASA, for example, uses fused-deposition modeling (FDM), which allows 3D printing prototypes to verify the form, fit and function of the parts before investing in expensive tooling.

The highest CAGR for PAM solutions is expected to be between 2021 and 2026

The highest expected CAGR for the PAM segment will be during the forecast period. This segment’s growth can be attributed largely to the increased deployment of PAM solutions within discrete and process industries. These solutions are used to create a comprehensive data repository that includes information about different equipment in these plants. It covers everything from their uptime performance to life cycle cost assessment.

The highest projected CAGR in the food & beverage industry will be between 2021 and 2026

Machine vision and 3D food printing are revolutionizing the manufacturing process in the food & beverage industry. All parties involved in the manufacturing and distribution of these products have the same goal: to provide high-quality products and keep production, maintenance and distribution costs low. Automation technologies in the food and beverage industry allow for design flexibility, integrated safety solutions, and sophisticated software tools to control the operation of machines.

The highest projected CAGR in the medical devices industry will be between 2021 and 2026

Innovations and technological advances are driving the medical device industry. This industry has seen significant growth due to the advancement of cutting-edge medical devices using novel technologies. Smart factory solutions are used in the medical device industry to improve manufacturing, planning, technology assessment, remote support, and manufacturing processes. Due to their precision in manufacturing, smart factory technologies can also reduce recalls and wastages.

APAC will lead the smart factory market by 2020

APAC’s smart factory will grow at the highest rate of CAGR due to the growing adoption of automation technologies in various industrial sectors in China, India, and China. China is seeing a rise in factory automation due to the high labor costs and large numbers of automobile manufacturing plants. The rising energy demand has been fueled by rising living standards, increasing population, and emerging economies. APAC is expected to account for approximately 65% of global energy demand by 2035. China and India together are expected to meet 40% of that demand. To meet the increasing energy demand, oil and gas companies from North America and Europe are investing in APAC. The growing energy demand will lead to the growth of the energy sector. This includes oil & gas, power, and other industries. This would lead to increased demand for automation products within the APAC region.

Key Market Players

ABB Ltd. (Switzerland), Endress+Hauser AG(Switzerland), Emerson Electric Co., (US), General Electric, (US), Rockwell Automation, Inc., (US), Schneider Electric SE, France), Siemens AG (Germany), Mitsubishi Electric Corp., Honeywell International Inc., (US), and Yokogawa Electric Corp.

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