OPTICAL ENCODER MARKET ANALYSIS

An optical encoder is an electromechanical device with mechanical input and electrical output, which provides multiple digital signals proportional to the regular displacement of the input shaft. There are two types of optical encoder namely incremental encoder and absolute encoder. Incremental encoders are commonly used incremental encoder utilizes two sensing channels (A and B) to sense the angular position of the shaft, generates square waves corresponding to each incremental rotation of the shaft. Furthermore, the absolute encoder is positioning encoder provides absolute positional information and periodic information of the disc, holds the positional information when the power is switched off. An absolute encoder is classified into two types, single-turn absolute encoder, and multi-turn absolute encoder.

The global optical encoder market is estimated to be valued at US$ 2,184.3 million in 2021 and is expected to exhibit a CAGR of 8.7% over the forecast period (2021-2028).

Recent Developments:

1. US Digital, U.S based company, designs and manufactures optical encoders, inclinometers & motion control components. On 16 September 2020, the company has launched the new E16 Micro Optical Kit Encoder has a 10mm bolt circle, fits 1.5mm (0.059″) and 2mm (0.079″) shafts and provides A, B and Index digital quadrature signals.
2. Renishaw plc, based in Wotton-under-Edge, England is one of the world's leading engineering and scientific technology company. On December 2019, the company has launched “TONiC” a new super-compact non-contact optical encoder that offers speeds up to 10 m/s and resolutions down to 5 nm for both linear and rotary applications.
3. In March 2020, Renishaw plc, based in Wotton-under-Edge, England is one of the world's leading engineering and scientific technology company has introduced a new range of encoder solutions for partial arc measurement applications.

Figure 1. Global Optical encoder Market Value (US$ 584.9 Mn), by Region, 2020

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North America held dominant position in the global optical encoder market in 2020, accounting for 10.1% share in terms of volume, followed by Asia Pacific (excluding Japan) and Western Europe, respectively.

Global Optical Encoder Market: Drivers

Increasing adoption of advanced motion control systems is expected to drive growth of the global optical encoder market during the forecast period. Advanced motion control system is being adopted in numerous sectors including offshore equipment, construction machinery, automotive, military & aerospace, and alternative energy systems. This demand is attributed to increasing need for reliable operation under extreme conditions. Furthermore, next-generation encoders that haven been developed use solid-state electronics instead of delicate mechanical systems, in order to cater to increasing demand for application in these sectors and industries.

Growing need for improved automation is expected to propel the global optical encoder market growth over the forecast period. Increasing number of orders placed for advanced and expanding applications combined with traditional and manual controls for state-of-the-art automation. There is a robust demand for automated controls for industrial applications, in order to enhance performance, productivity, and reduce cost. Moreover, advent novel features such as advanced diagnostic capabilities are expected to propel the global optical encoder market growth in the near future.

Global Optical Encoder Market: Opportunities

Signal-on-demand in hybrid absolute rotational encoders can present major business opportunities. Currently, a major proportion of position encoding applications deploy absolute or incremental rotational encoders. ‘Signal on-demand’ in hybrid absolute or incremental rotational encoders is increasingly gaining popularity for application in various industries.

Signal-on-demand in hybrid absolute rotational encoders can present major business opportunities. Currently, a major proportion of position encoding applications deploy absolute or incremental rotational encoders. ‘Signal on-demand’ in hybrid absolute or incremental rotational encoders is increasingly gaining popularity for application in various industries.

Market Trends

Encoder manufacturers are focused on the standardization of output drivers on a common set that is electrically protected, more robust, and have higher drive capabilities compared to those of the past. Moreover, optical encoders are becoming increasingly compatible with buses either existing fieldbuses or emerging Ethernet-based buses. The development of intelligence within the rotary encoder is one of the major trends in the market. Optical encoders are becoming increasingly versatile in operations, owing to development of programing and diagnostic capabilities.

Currently, incorporating optical encoders and advanced motion control systems are begin increasingly adopted, particularly in industries such as offshore equipment, construction, military & aerospace, and alternative energy systems. Furthermore, manufacturers are developing advanced optical encoders and other motion sensors, in order to cater to demand reliable operations under extreme conditions (dirty, wet, and very hot and cold) coming from these sectors. Increasing deployment of magic encoders in high-volume industries such as household appliances, automotive and fitness equipment is another major trend in the market.

Figure 2. Global Optic Encoder Market Share, By Output Signal Format, 2020

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• The Digital segment accounted for the largest share of 9.3% in the global optical encoder market in 2020. The segment is expected to reach US$ 3,419.9 million by 2028 owing to increase in demand of advanced technologies such as audio and speech processing, sonar, radarand other sensors.
• The Healthcare Equipment segment accounted for the largest share of 10.1% in the global optical encoder market in 2020. The segment is expected to reach US$ 751.9 million by 2028 owing to increase in demand for encoders and angle sensors for medical technology.

Global Optical Encoder Market: Restraints

Major concerns regarding security are expected to restrain growth of the global optical encoder market during the forecast period. Optical encoders are complex electronic devices equipped with integrated circuits, photo detectors, and LED, which makes them vulnerable to damage in case of electrical disturbances. This susceptibility makes them less tolerant of mechanical misuse and also constraints their temperature limits. In fact, the mechanical fragility is probably the biggest drawback of optical encoders. The main component of optical encoders is a thin glass disk, which is susceptible to damage due to excessive shock or vibration.

Major concerns regarding security are expected to restrain growth of the global optical encoder market during the forecast period. Optical encoders are complex electronic devices equipped with integrated circuits, photo detectors, and LED, which makes them vulnerable to damage in case of electrical disturbances. This susceptibility makes them less tolerant of mechanical misuse and also constraints their temperature limits. In fact, the mechanical fragility is probably the biggest drawback of optical encoders. The main component of optical encoders is a thin glass disk, which is susceptible to damage due to excessive shock or vibration.

Competitive Section

Major companies involved in the global optical encoder market are Honeywell International Inc., Renishaw plc, Sensata Technologies, Inc., US Digital, Rockwell Automation, Inc., Allied Motion Technologies Inc., and Grayhill Inc.

Global Optical Encoder Market: Key Developments

1. Major companies in the market are focused on product launches, in order to enhance the market presence. For instance, in January 2017, Renishaw plc introduced RESOLUTE FS, an absolute open-optical encoder system for rotary and linear axis applications.
2. Key players are involved in product development, in order to expand the product portfolio. For instance, in March 2020, US Digital introduced EC 35 communication encoder at 60,000 CPR.