February 22, 2024

The Growing Automation Industry Is Driving The Optical Encoder Market

Optical encoders offer high resolution, reliability and accuracy positioning feedback, which has made them an essential component in numerous automated processes and machines. Optical encoders utilize an opaque disk with regularly spaced lines or tracks that interrupts an optical source which is then read by an optical detector to provide output signals for positional or rotational feedback. Sectors of alternating opaque and transparent sections on the disk serve as the code pattern, which is read out using an LED light source and photodetectors. Functions such as speed control, motion control and machine automation have become highly dependent on encoders for precision motion feedback.

The global Optical Encoder Market is estimated to be valued at Us$ 2580.9 Mn in 2023 and is expected to exhibit a CAGR Of 5.7% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

One key trend driving growth in the optical encoder market is the increasing automation across industries. Growing labor costs and demand for higher productivity is propelling manufacturing industries to automate various processes. This has increased the demand for automated machinery and robots which heavily rely on encoders for precision motion control and feedback. Optical encoders provide high resolution feedback essential for automated assembly lines, packaging machines, robotic systems and CNC machines. Additionally, IIoT is enabling connectivity of these automated machines through industrial networks, generating huge streams of data which requires reliable and precise motion control and feedback through encoders. Thus, rapid growth of automation technologies across industries such as automotive, electronics, healthcare, food & beverages etc. is fueling demand for optical encoders.


Porter’s Analysis


Threat of new entrants: The threat of new entrants in the optical encoder market is moderate to high as there are no major entry barriers. However, established market players have strong brand identity and economies of scale which makes market entry challenging.

Bargaining power of buyers: The bargaining power of buyers is moderate. Buyers have various options to choose from in terms of technology, accuracy, and type. However, switching costs are low.

Bargaining power of suppliers: The bargaining power of suppliers is moderate. The supplier base is fragmented with presence of component manufacturers as well as technology providers.

Threat of new substitutes: The threat of substitutes is moderate. Emerging non-contact technologies like laser encoders, magnetic encoders are gaining traction. However, optical encoders have established market presence.

Competitive rivalry: The competitive rivalry is high among leading players. Players compete based on product pricing, innovation, and technologically advanced products.

Key Takeaways

The Global Optical Encoder Market Demandis expected to witness high growth over the forecast period. The global Optical Encoder market is estimated to be valued at US$ 2580.9 Mn in 2023 and is expected to exhibit a CAGR of 5.7% over the forecast period 2023 to 2030.

The Asia Pacific region is anticipated to register the fastest growth in the optical encoder market over the forecast period. Rapid industrialization and growing automation in industries such as electronics, automotive, manufacturing are driving the demand for optical encoders in the region.

Key players operating in the optical encoder market are Renishaw, BEI Sensors, Broadcom, Hengstler, Dynapar, Baumer Group, Tokyo Sokuteikizai, CTS, Allied Motion, EPC, US Digital, CUI, Omron, Heidenhain, Bourns, Grayhill, Gurley, Honeywell, Honest Sensor Corporation, HONTKO. Players focus on partnerships, new product development and diversifying their product portfolio to strengthen market position.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it