Factory Automation Market: Current Analysis and Forecast (2024-2032)

Factory automation refers to the use of control systems, machinery, and technologies to streamline manufacturing processes, reducing the need for human intervention while optimizing production efficiency. It involves automating tasks traditionally performed by humans, using machines, actuators, sensors, processors, and networks to automate production processes. The history of factory automation started with basic mechanisms like conveyor belts in assembly lines, evolving to advanced robotic systems and computerized control.

The Factory Automation Market is expected to grow at a strong CAGR of around 8.60% owing to the increased demand for better efficiency and higher productivity, coupled with widespread adoption of AI and ML. Factory automation, the integration of advanced technologies into manufacturing processes, is witnessing a remarkable surge across various industries. This transformative shift is being driven by a multitude of factors that are reshaping the way factories operate. From enhancing efficiency and productivity to addressing labor shortages and improving product quality, factory automation is emerging as a game-changer in the manufacturing landscape. Furthermore, manufacturers are under constant pressure to optimize their operations and maximize output while minimizing costs in today's highly competitive global market. Automated systems can operate around the clock with minimal downtime, resulting in higher production rates and improved overall equipment effectiveness (OEE). For instance, according to a report by the International Federation of Robotics (IFR), implementing industrial robots has led to an average increase in productivity of 15-30% in various industries. Additionally, many industries, particularly in developed economies, are facing a shortage of skilled labor due to an aging workforce and shifting demographic trends. Automation technologies can alleviate this challenge by taking over repetitive, physically demanding, or hazardous tasks, reducing the reliance on human labor. According to estimates, labor costs account for up to 25% of total manufacturing costs in developed countries, driving the adoption of automation to remain competitive. Moreover, automated systems are highly precise and consistent, reducing the risk of human error and ensuring consistent product quality. Industries such as automotive, electronics, and pharmaceuticals, where quality control is critical, are increasingly adopting automation to meet stringent quality standards. For instance, according to a survey by the Association for Manufacturing Technology (AMT), 70% of manufacturers cited improved product quality as a key driver for implementing automation solutions. Lastly, the Industry 4.0 revolution, which promoted the digitization and interconnectivity of manufacturing processes, has accelerated the adoption of automation technologies. Smart factories, enabled by IoT, cyber-physical systems, and cloud computing, leverage automation to achieve real-time monitoring, data-driven decision-making, and flexible production capabilities.

Based on the component, the market is segmented into industrial robots, machine vision, process analyzers, field instruments, human-machine interfaces, industrial PCs, industrial sensors, and industrial 3D printers. Industrial robots are the most widely adopted and are in high demand. Industrial robots have firmly established themselves as the backbone of modern factory automation. These highly versatile machines can perform a vast array of tasks with unparalleled precision, speed, and consistency. From assembly and welding to material handling and packaging, industrial robots have become indispensable assets across various industries, including automotive, electronics, and consumer goods. The dominance of industrial robots can be attributed to their potential to increase productivity and efficiency. Industrial robots aid in improving productivity while lowering costs and generating high-quality goods in automation applications. Furthermore, technological advancements have played a significant role in the adoption of industrial robots. The development of 5G wireless technology and the adoption of Industry 4.0 have driven the demand for factory automation solutions. The Industrial Internet of Things (IIoT) is essential to automation technology as it facilitates the development of efficient, cost-efficient, and responsive system architectures. Factors such as these foster a conducive environment and support the growth in adopting industrial robots for factory automation across various industries.

Based on the solution, the market is segmented into a distributed control system (DCS), programmable logic controller (PLC), supervisory control and data acquisition (SCADA), manufacturing execution system (MES), enterprise resource planning (ERP), and others. The SCADA system has been identified as the most widely adopted solution for factory automation across various markets. Primarily driven by its capability to provide real-time monitoring and control. They combine software and hardware elements that allow organizations to control and monitor factory processes locally or remotely. This capability is crucial in factory automation, where timely and accurate information is essential for efficient operations. Furthermore, SCADA systems enhance the efficiency of factory operations. They enable swift operations of manufacturing and material handling with the use of intelligent manufacturing infrastructure. Industries are deploying SCADA systems to increase productivity and reduce labor costs. These developments among others are creating a favorable environment, influencing the demand for SCADA for factory automation.

Based on end-user industry, the market is segmented into automotive, electronics & semiconductor, heavy manufacturing, packaging, oil, gas, & chemical, healthcare, and others. The automotive industry has firmly established itself as a major end-user segment for factory automation. Factory automation in the automotive industry leads to increased production efficiency. Automated systems can work continuously without fatigue, ensuring consistent quality and high productivity. This is particularly important in the automotive industry, where high production volumes are required. Furthermore, factory automation leads to significant cost reductions in the automotive industry. By automating processes, companies can reduce labor costs and increase efficiency, lowering production costs. These advancements, among others, are creating a favorable environment where the factory automation industry is thriving, with the increased demand from the automotive industry.

For a better understanding of the market adoption of Factory Automation, the market is analyzed based on its worldwide presence in countries such as North America (The U.S., Canada, and the Rest of North America), Europe (Germany, The U.K., France, Spain, Italy, Rest of Europe), Asia-Pacific (China, Japan, India, South Korea, Rest of Asia-Pacific), Rest of World. Asia Pacific is anticipated to experience substantial growth during the predicted timeframe, where countries like China, Japan, Taiwan, South Korea, and India are rapidly emerging as a dominant force in the factory automation market. Primarily driven by the surging industrialization of the region. The Asia Pacific region is experiencing a surge in industrialization, driven by the growing demand for consumer goods and the increasing presence of multinational corporations. This trend has fueled the need for efficient and automated manufacturing processes, propelling the adoption of factory automation solutions. Furthermore, several countries in the Asia Pacific region, such as Japan and China, are facing labor shortages due to aging populations simultaneously with the challenges of rising labor costs. Factory automation counters both these challenges by reducing the reliance on manual labor and increasing operational efficiency. Moreover, embracing factory automation enables manufacturers in the Asia Pacific region to gain a competitive edge in the global market. Automated processes will allow them to produce high-quality products at lower costs, making their offerings more attractive to consumers worldwide. Factors such as these have created a scenario that has led to the high growth of factory automation in the Asia Pacific region.

Some of the major players operating in the market include ABB; Emerson Electric Co.; Siemens; Schneider Electric; Mitsubishi Electric Corporation; Yokogawa Electric Corporation; Honeywell International Inc.; Rockwell Automation; General Electric Company; and Robert Bosch GmbH.