The Optical Encoder Market is estimated to be valued at US$ 2580.9 Mn in 2023 and is expected to exhibit a CAGR of 8.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
An optical encoder is an electro-optical device used to convert the angular position or motion of a shaft or axle to a digital code, so it can be utilized by digital systems like programmable logic controllers or motion control systems. Optical encoders work by incorporating a light source, a sensing element, and a rotating disc. As the disk rotates, a slitted pattern interrupts and alters the flow of light from the source to the sensor. This generates a square wave signal where the number of pulses indicates the position or movement. Optical encoders find application in motion control systems, CNC machines, CD/DVD players, robotics, automation systems, and factory automation.
Market Dynamics:
Increasing adoption of automation and robots in manufacturing industries is a key driver boosting the optical encoder market growth. Robots and automated systems require precise feedback in order to operate accurately. Optical encoders provide highly accurate position and speed feedback required by industrial robots and automated equipment. Moreover, growing electronics and semiconductors industries where optical encoders are widely used in semiconductor fabrication equipment, CNC machines, and semiconductor assembly machines is also fueling the market growth. Additionally, increasing emphasis on equipment optimization and upgrading existing machinery with digital controls is favoring the demand for optical encoders.
Segment Analysis
The optical encoder market can be segmented by type into incremental optical encoders and absolute optical encoders. The incremental optical encoder sub-segment currently dominates the market as they are relatively cheaper and offer high resolution compared to absolute optical encoders. However, absolute optical encoders segment is expected to witness higher growth during the forecast period owing to the advantages of absolute positioning in applications such as robotics, machine tools and motion control.
PEST Analysis
Political: There are no significant political risks impacting the optical encoder market currently.
Economic: The global economy is recovering post pandemic which is encouraging capital expenditure on factory automation and industrial machinery, positively impacting the optical encoder market.
Social: Changing demographics and labor trends are increasing adoption of industrial automation, thus propelling the optical encoder market growth.
Technological: Advancements in optical encoder technology such as compact packaging, higher resolutions, and multi-turn capability are supporting the market growth.
Key Takeaways
Global Optical Encoder Market Demand is expected to witness high growth, exhibiting CAGR of 8.7% over the forecast period, 2023 to 2030, due to increasing industrial automation and demand for precision motion control systems. The market size for 2023 is estimated to be US$ 2580.9 Mn.
Regional analysis: North America currently dominates the optical encoder market owing to significant manufacturing activity and early adoption of industrial automation in the region. Asia Pacific is expected to witness fastest growth during the forecast period with China and India emerging as major markets for optical encoders due to establishment of manufacturing facilities and Make in India initiative propelling demand.
Key players operating in the optical encoder market are Honeywell International Inc., Renishaw plc, Sensata Technologies, Inc., US Digital, Rockwell Automation, Inc., Allied Motion Technologies Inc., and Grayhill Inc. Honeywell and Renishaw are currently leading the market with innovative product launches focusing on compact packaging and multi-turn capabilities.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it