The rotary encoder market, at a 4.36% CAGR, is projected to increase from USD 1.187 billion in 2025 to USD 1.469 billion in 2030.
Rotary encoders are electromechanical devices that convert the rotation of a shaft into an electronic signal that can be read by another electronic device. The rotary encoder market is driven by the growing demand for automation and robotics in various industries, including automotive, aerospace, and manufacturing. The global rotary encoder market is expected to continue to grow in the coming years due to the increasing adoption of automation and the rise of Industry 4.0.
The rotary encoder plays an important role in many industries where precise measurement of angular position, velocity, and acceleration is critical. Rotating encoders generate digital output, which is more precise and noise-resistant than analogue output and it is also more reliable and durable than other kinds of sensors as it has no moving components and is not impacted by wear and tear. Rotary encoders are widely used in automation and control applications, such as CNC machines, robotics, and factory automation. The growing efforts to promote industrial automation will boost the rotary encoder market growth. In 2020, the International Federation of Robotics (IFR) found that global sales of industrial robots increased by 12% in 2019, with a total of 373,000 units sold. According to the Institute for Robotic Process Automation and Artificial Intelligence (IRPA AI), the global market for robotic process automation (RPA) is expected to reach $7.2 billion by 2025. Industry 4.0, also known as the fourth industrial revolution, is the digital transformation of manufacturing processes through the integration of advanced technologies such as automation, robotics, the Internet of Things (IoT), and data analytics. The demand for rotary encoders in manufacturing processes is likely to be driven by Industry 4.0's growing focus on automation. In 2021, the World Economic Forum estimated that Industry 4.0 could create up to $3.7 trillion in value for the global economy by 2025. The International Labour Organization (ILO) in 2020 stated that the adoption of Industry 4.0 technologies could help mitigate the economic impact of the COVID-19 pandemic and promote sustainable recovery. The rotary encoder market is expected to experience significant growth in the coming years, driven by the increasing demand for automation and Industry 4.0.
Asia Pacific region is expected to dominate the rotary encoder market as it is home to several major economies, such as China, Japan, and India. The rise of Industry 4.0 and the increasing demand for automation in the manufacturing industry are expected to drive the demand for rotary encoders in Asia Pacific. The Japanese government launched the "Connected Industries" initiative in 2020 which aims to promote the adoption of advanced technologies such as IoT, big data, and AI in the country's manufacturing industry. The Indian government launched the "National Programme on Advanced Manufacturing" in 2021, which aims to promote the adoption of advanced technologies such as robotics, artificial intelligence, and the IoT in the country's manufacturing industries sector. These initiatives are expected to drive the demand for rotary encoders in the Asia Pacific region.
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