Rise in Demand from Automotive Industry Boosts Encoder Market Growth
According to our latest study titled “Encoder Market Forecast to 2031 – Global and Regional Share, Trend, and Growth Opportunity Analysis – by Type and Technology,” the market was valued at US$ 2.81 billion in 2023 and is projected to reach US$ 6.21 billion by 2031; it is estimated to register a CAGR of 10.4% from 2023 to 2031. The report includes growth prospects in light of current encoder market trends and factors influencing the market growth.
Cars are increasingly being equipped with a range of advanced and digital technologies to make driving safer and more comfortable for users. Encoders play an important role in the automobile industry, improving the precision, performance, and safety of many vehicle systems. In modern and electric cars, encoders are employed in a variety of applications, including electric power steering (EPS) systems, motor control systems, anti-lock braking systems (ABS), traction control systems, headlight position control, and battery systems, among others. In EPS systems, encoders are used to monitor the steering wheel's position by ensuring exact control and response. Similarly, in ABS and traction control systems, encoders are employed to detect and prevent wheel slide, which supports enhancing vehicle stability. For instance, according to the International Energy Agency’s (IEA) annual Global Electric Vehicle Outlook 2024, nearly 14 million electric cars were sold worldwide in 2023, which is 3.5 million higher than in 2022, a 35% year-on-year increase; this brings the total number of cars on the roads to be 40 million. This growth in the number of cars shows that the electric cars’ share of the overall car market has risen to 18% in 2023, up from 14% in 2022. The increasing sales of electric cars worldwide boost the adoption of encoders among automotive manufacturers for motor control in electric and hybrid vehicles. These encoders provide exact feedback on motor speed, position, and direction, allowing for better energy efficiency and improved performance. The dependability and accuracy of feedback provided by encoders are critical for users and manufacturers to enhance vehicle handling, achieve safety regulations, and enhance autonomous driving technology. Further, the advancement in the automotive industry and increasing development in automation and electrification surge the demand for high-precision encoders. High-precision encoders are employed in autonomous driving systems such as adaptive cruise control, which uses wheel speed and position to manage acceleration and braking. Therefore, the growing demand for encoder ICs from the automotive industry fuels the encoder market growth.
Encoder Market – by Region, 2023 and 2031
Encoder Market Size and Forecast (2021 - 2031), Global and Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Type (Linear and Rotary), Technology (Optical, Magnetic, Inductive, and Others), and Geography
Encoder Market Report, Analysis, Opportunities by 2031
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Source: The Insight Partners Analysis
The encoder market analysis has been carried out by considering the following segments: type and technology. Based on type, the global encoder market is divided into linear and rotary. By technology, the global encoder market is segmented into optical, magnetic, inductive, and others. The optical encoders segment held the largest encoder market share in 2023.
The scope of the encoder market report is primarily segmented into North America (US, Canada, and Mexico), Europe (Russia, UK, Germany, France, Italy, and Rest of Europe), Asia Pacific (South Korea, China, India, Japan, Australia, and Rest of Asia Pacific), Middle East & Africa (UAE, Saudi Arabia, South Africa, and Rest of MEA), and South & Central America (Brazil, Argentina, and Rest of SAM). Asia Pacific accounted for the largest encoder market share in 2023. The encoder market in APAC is segmented into China, India, Japan, Australia, South Korea, and the Rest of APAC. Rising demand for advanced manufacturing technologies such as computerized numerical control (CNC) machines contributes to the growing encoder market size. Encoders are commonly employed in closed-loop control systems of CNC machines to ensure precise movement and positioning during machining operations. These devices transform mechanical action into electrical signals that are processed by the CNC controller, allowing the machine to make precise cuts and motions in accordance with programmed instructions. Numerous industries across the globe are adopting CNC machines to automate their production lines, which increases the adoption of encoders to ensure precise movement and positioning of machines. For instance, according to Piran Advanced Composites data published in May 2024, CNC machines are highly used in aerospace, automotive, marine, medical, and renewable energy sectors to automate manufacturing processes. Encoder CNC machine’s ability to detect and correct errors, minimizing downtime and improving overall production efficiency. Without encoders, CNC machines struggle to deliver the high levels of precision and reliability demanded in modern manufacturing processes.
Asahi Kasei Microdevices Corp, Vishay Intertechnology Inc, Sick AG, Honeywell International Inc, ROHM Co Ltd, Allegro MicroSystems Inc, Autonics Corporation, On Semiconductor Corp, Texas Instruments Inc, Analog Devices Inc, Microchip Technology Inc, STMicroelectronics NV, Broadcom Inc, OMRON Corp, and Panasonic Holdings Corp are among the key players profiled in the encoder market report.
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