Encoders Market Size, Trends and Growth Analysis by 2027

The global encoder market was valued at approximately US$ 1,748.4 million in 2020 and is projected to experience a compound annual growth rate (CAGR) of 10.19% from 2020 to 2027, ultimately reaching around US$ 3,447.7 million by 2027.

Innovative encoder technologies are driving automotive original equipment manufacturers (OEMs) to integrate encoder devices, significantly influencing the global encoder market. Key developing nations in the Asia-Pacific (APAC) and South American regions, including India, China, and Brazil, are pivotal to the expansion of the automotive sector. In recent years, advancements in software, communication, and control technologies have led to remarkable improvements in warehouse automation systems. Automotive guided vehicles (AGVs) have greatly benefited from these technological advancements, finding applications across a diverse range of sectors. Incremental rotary encoders serve as the primary sensors for motion and directional control in AGVs, providing accurate, real-time data regarding AGV motors. Additionally, companies like Lika Electronic offer a variety of precision, compact, and modular encoder products specifically designed for AGVs, ensuring their safe and reliable operation. Consequently, the global encoder market is expected to continue its upward trajectory.

Robotics technology is increasingly utilized in critical industries such as aerospace and automotive, where precise machine operations are essential for handling large components. Robots can access any part of a sizable component, such as the fuselage of an aircraft, performing tasks like drilling and milling. However, accuracy can be compromised by various factors, necessitating precise positioning and guidance of the tool center point, which presents a challenge in robotic applications. To address this, companies are focusing on developing encoders tailored for industrial robotics. For example, HEIDENHAIN GmbH produces encoders for the robotics sector, including the ECI 4000 absolute inductive rotary encoder, which enhances the absolute position accuracy of the tool center point on industrial robots by 70-80%. As sales of industrial robotics rise and the integration of encoders in robotic systems increases, the global encoder market is anticipated to experience significant growth in the forthcoming years.

The encoder market's expansion in the APAC region is driven by several factors, including the presence of rapidly developing countries, increased technology adoption, the implementation of advanced automation solutions, and heightened industrialization. Other emerging regions, such as the Middle East and Africa (MEA) and South America (SAM), are also expected to witness steady growth, fueled by government initiatives aimed at digitalizing economies through the adoption of cutting-edge technologies across various sectors, including consumer electronics, automotive, aerospace, and food & beverages.

The encoder market is categorized based on type, technology, end user, and geography. In terms of type, the market is divided into linear encoders and rotary encoders. The technology segment includes magnetic, optical, and other types. The end-user segment encompasses industries such as aerospace, automotive, food & beverages, printing, consumer electronics, medical, and others. Geographically, the encoder market is segmented into five regions: North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SAM).

Key players in the encoder market include established companies such as Delta Electronics, Inc., Dahua Technology CO., Ltd, Omron Corporation, ELCO Holding, FRABA B.V., FSI Technologies Inc., Renishaw Plc., Rockwell Automation, Inc., Scancon Encoders A/S, and Servotechnik GmbH.

The overall size of the global encoders market has been determined through a combination of primary and secondary research methods. The research process begins with comprehensive secondary research utilizing both internal and external sources to gather qualitative and quantitative data related to encoders. This approach also provides an overview and forecast for the encoder market based on the various segmentations across global regions. Furthermore, primary interviews with industry participants and experts are conducted to validate the data and analysis. Participants typically include industry professionals such as VPs, business development managers, encoders intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the encoder market.