The Optical Encoder Market revenue was $2,333.4 million in 2021 and is expected to reach $4,851.9 million by 2029, growing at a CAGR of 9.7% between 2022 and 2029. Increased adoption of advanced absolute optical encoders by surface mount technology (SMT) placement equipment manufacturers will also be a major driver of market growth through 2029.
Takeaways from the Optical Encoder Market Study
- Players in the automation industry are transitioning from incremental optical encoders to absolute optical encoders, which produce parallel digit outputs and are well suited for high-precision instruments.
- Based on configuration, shafted optical encoder is expected to maintain its market leadership during the forecast period.
- Healthcare equipment now accounts for more than a fourth of total demand. It will continue to be a highly profitable application area for optical encoder manufacturers, and it is expected to overtake the consumer electronics industry in terms of market value share in the second half of the projection period.
- The optical encoder market in Asia Pacific excluding Japan (APEJ) is expanding rapidly as manufacturers of automotive, consumer electronics, and industrial automation use optical encoders to improve product quality.
Quantum Dot Commercialization to Create Lucrative Opportunity
The commercialization of quantum dots is expected to increase demand for high-performance optical encoders (QDs). These QoDs are found in a wide range of thin-film devices, including photo detectors, solar cells, and LEDs. QDs offer improved efficiency, display life, power consumption, brightness, and colour saturation in flat panel display (FPD) applications, as well as lower cost.
FMI experts predict that manufacturers will shift away from liquid crystal display (LCD) devices and toward the development of QD-enabled devices such as low-cost thin film transistor (TFT) products in the near future.
Many key players are planning to invest heavily in innovation, research, and development practises in order to discover new applications for optical encoders. Vendors are also focusing on strategic partnerships and collaborations, new product development, and business expansion through the use of technology in order to capture a large customer base.
- Honeywell International
- Rockwell International
- Renishaw PLC
- Allied Motion Technologies
- Sensata Technologies
- US Digital