Encoder ICs Market Outlook:
Encoder ICs Market size was over USD 3.37 billion in 2025 and is projected to reach USD 7.14 billion by 2035, growing at around 7.8% CAGR during the forecast period i.e., between 2026-2035. In the year 2026, the industry size of encoder ICs is evaluated at USD 3.61 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.
