The global encoder market accounted for US$ 1,748.4 million in 2020 and is expected to grow at a CAGR of 10.19% during 2020-2027 to reach US$ 3,447.7 million by 2027.

Advanced encoder technologies are encouraging automotive OEMs to adopt encoder devices; thus, the automobile industry has a huge impact on the global encoder market. Various developing countries in APAC and South America, such as India, China, and Brazil, play a crucial role in the growth of the automotive industry. From the past few years, warehouse automation systems have progressed radically owing to developments in software and communication and control technology. Automotive guided vehicles (AGV) have aided greatly from such advances and have been applied to a broadening range of applications. The primary sensors used in AGV motion and directional control are incremental rotary encoders. The incremental encoders are broadly used in material handling equipment as they are built to offer precise, real-time data of AGV motor. Further, Lika Electronic offers various types of precision, compact, and modular encoder products for AGVs to ensure safe and reliable operation. Thus, the encoders market is anticipated to grow further globally.

Robotics has been used in various major industries, such as aerospace and automotive, as these industries require highly accurate machine operations on large components. Robots have the ability to reach any position on a large component, such as aircraft's fuselage, and can achieve tasks, which includes drilling and milling. Nevertheless, accuracy might reduce by several factors for such applications, and the tool center point must be positioned and guided with sufficient accuracy; this is one of the drawbacks of a robot. Companies highly emphasize on offering encoders for industrial robotics; for instance, HEIDENHAIN GmbH designs encoders for the robotics industry; its ECI 4000 absolute inductive rotary encoder enhances the absolute position accuracy of the tool center point on industrial robots by 70-80%. Thus, owing to growing industrial robotics sales and increasing integration of encoders in robots, the growth of the global encoder market is likely to propel in the coming years.

The presence of fast-growing countries, rising technology adoption, adoption of high-end automation solutions, and rise in industrialization are among the major factors expected to drive the growth of the encoder market in APAC. Other developing regions such as MEA and SAM are also projected to grow at a steady pace owing to the increasing government initiatives to digitalize economy with the adoption of advanced technologies across several industries, such as consumer electronics, automotive, aerospace, and food & beverages.

The encoder market is segmented into type, technology, end user, and geography. Based on type, the encoder market is further segmented into linear encoder and rotary encoder. Based on technology, the encoder market is subsegmented into magnetic, optical, and others. Based on end user, the encoder market is further fragmented into aerospace, automotive, food & beverages, printing, consumer electronics, medical, and others. Geographically, the encoder market is fragmented into five regions-North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SAM).

The well-established market players operating in the encoder market include Delta Electronics, Inc.; Dahua Technology CO., Ltd; Omron Corporation; ELCO Holding; FRABA B.V.; FSI Technologies Inc.; Renishaw Plc.; Rockwell Automation, Inc.; Scancon Encoders A/S; and Servotechnik GmbH.

The overall global encoders market size has been derived using both primary and secondary sources. The research process begins with exhaustive secondary research using internal and external sources to obtain qualitative and quantitative information related to encoders. It also provides an overview and forecast for the encoder market based on all the segmentations provided for global regions. Also, primary interviews were conducted with industry participants and commentators to validate data and analysis. The participants who typically take part in such a process include industry expert such as VPs, business development managers, encoders intelligence managers, and national sales managers, and external consultants such as valuation experts, research analysts, and key opinion leaders specializing in the encoder market.