Encoder ICs Market size was valued at USD 2.93 Billion in 2023 and is anticipated to exceed USD 7.82 Billion by the end of 2036, expanding at over 7.8% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of encoder ICs is evaluated at USD 3.1 Billion.
Encoder ICs are used in battery administration systems in electric cars to track the location and condition of battery modules and cells. The need for encoder integrated circuits (ICs) is predicted to increase dramatically as automotive technologies move toward electric vehicles, connectivity, and autonomous driving. This will spur innovation and breakthroughs in automotive electronics and control systems. EV sales rose from 9% in 2021 to 14% in 2022 of all new car sales, from less than 5% in 2020 to 9% in 2021.
The demand for encoder ICs is driven by the increasing adoption of automation and robotics in the industrial sector. These devices, which are used in robotic arms, CNC machines, automated guided vehicles, and other industrial applications, provide accurate position feedback that enables precise control of motion. In CNC machines, encoders are used to provide positional feedback during operation, ensuring that the machine tool operates at the optimum speed and accuracy for the job.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
7.8% |
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Base Year Market Size |
USD 2.93 Billion |
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Forecast Year Market Size |
USD 7.82 Billion |
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Regional Scope |
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Application (Motion Control, Car Door Control, Medical & Dentistry Device & Equipment, Car Alarm System, Smoke & Fire Alarm System, Security System, Burglar Alarm System, Robotics, Miniature Motor, and Actuators)
Motion control segment in the encoder ICs market is estimated to reach USD 1.66 Billion by the end of 2036. Encoder ICs play a fundamental role in motion control systems by providing critical feedback on the position and movement of motors or actuators, which leads to an essential degree of accuracy for precise controls and efficient operation.
A major driver is the increasing adoption of automation in manufacturing, logistics, and other sectors. For efficient operation, robots, automated vehicles, and others must be able to control their movements precisely so encoder ICs are required. Four out of five warehouses in the world are going to be computerized before 2025. A 40% reduction in costs could be achieved through using robotics for logistics.
End User (Automotive, Electronics)
In encoder ICs market, electronic segment is poised to reach USD 3.83 Billion by the end of 2036. Encoders are extensively used in office equipment, including copiers, printers, answering machines, PC-based scanners, and scanners, in this sector.
In addition, there has been a noticeable increase in the use of encoders for consumer electronics applications in the Asia Pacific and North America regions due to the rapid adoption of new technologies and the presence of numerous consumer electronics giants such as Apple, Samsung Electronics, and HP Inc.
Our in-depth analysis of the global encoder ICs market includes the following segments:
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Application |
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End User |
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APAC Market Forecasts
Asia Pacific region in encoder ICs market revenue is expected to cross USD 2.99 Billion by the end of 2036. Rapid industrialization, urbanization, and technological progress are leading to increased adoption across a wide range of sectors in the Asia Pacific region. In addition, with the adoption of Industry 4.0 and the implementation of advanced automation and robotics solutions, the manufacturing sector is evolving. For example, Asia accounted for 73% of all new robots that have been deployed according to the International Federation of Robotics.
The enormous supply and demand from a large population is the most important factor in India's rapidly growing economy. To promote India's economic stability, the demand and supply sides are working in parallel. India's market is full of opportunities, and demand for encoder IC will continue to grow rapidly over the coming years.
The growth of the market can be accounted for in this region on behalf of the high growth in the consumer electronic sector of the China region. Devices such as smartphones, printers, tablets, and more require encoder ICs to function better and efficiently.
The market growth can ascribed to the back increasing demand for encoder IC in the automotive sector and also growth in EV sales in Japan.
North American Market Statistics
Encoder ICs market size for North America region is projected to exceed USD 2.30 Billion by the end of 2036. Encoder ICs are used in consumer electronics in this region such as digital cameras, printers, drones, and gaming consoles where they enhance the device's functionality and performance. The growing demand for encoder ICs in the consumer electronics sector is also driven by the proliferation of smart devices and wearables. By 2025, it is estimated that there will be around 20 interconnected electronic devices in the home of a majority of US households.
The growth can be attributed to its high usage and a growing number of manufacturers in the United States.
This market is expected to grow in Canada due to the increasing integration of encoder IC in the industrial automation domain.
Author Credits: Abhishek Verma
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