Smart Factory Market

Rising use of robotics in the industry to boost the market growth

Figure 1: Global prediction of installation of industrial robots in a million units from 2014 to 2024

Owners of smart factories will be able to employ cellular technologies more securely and customize them for certain use cases thanks to 5G technology. They can collect data off the production networks without connecting to the machines by installing sensors on equipment connected to 5G networks, enabling seamless real-time optimization. During July and September 2022, around 110 million new subscriptions to 5G were added globally, bringing the total to approximately 870 million. Wired communication is no longer necessary thanks to installing 5G networks in factories, which allows for high-speed manufacturing with high flexibility and minimal downtime.

The development of the 5G network will provide factories with a one-stop shop for solutions and open up huge prospects for smart manufacturing. Thus, the ease of availability of the 5G network has enhanced the smart factory market CAGR across the globe in recent years.

The Global Smart Factory Market Industry is characterized by robust growth projections, with the market expected to reach 161.3 USD Billion in 2024 and 785.2 USD Billion by 2035. This growth trajectory indicates a compound annual growth rate (CAGR) of 15.47% from 2025 to 2035, reflecting the increasing adoption of smart technologies across various sectors. The expansion of the market is driven by factors such as automation, customization, sustainability, and technological advancements. As industries continue to embrace smart factory solutions, the market is likely to witness significant transformations, positioning smart factories as integral components of the future manufacturing landscape.

Sustainability initiatives are becoming a cornerstone of the Global Smart Factory Market Industry, as manufacturers strive to reduce their environmental footprint. The integration of smart technologies facilitates energy-efficient processes and waste reduction, aligning with global sustainability goals. Governments worldwide are increasingly implementing regulations that encourage sustainable practices, further driving the adoption of smart factory solutions. This trend not only enhances corporate responsibility but also appeals to environmentally conscious consumers. As sustainability becomes a competitive differentiator, the market is expected to grow substantially, with projections indicating a CAGR of 15.47% from 2025 to 2035, underscoring the importance of sustainable manufacturing practices.

Technological advancements play a crucial role in shaping the Global Smart Factory Market Industry, as innovations in IoT, AI, and big data analytics transform manufacturing processes. These technologies enable real-time monitoring, predictive maintenance, and data-driven decision-making, enhancing operational efficiency and reducing downtime. As manufacturers increasingly leverage these advancements, the market is poised for significant growth. The integration of smart technologies is expected to drive the market to an estimated value of 161.3 USD Billion in 2024, highlighting the transformative impact of technology on manufacturing. The continuous evolution of these technologies suggests a promising future for smart factories, fostering innovation and competitiveness.

The Global Smart Factory Market Industry experiences a notable surge in automation adoption, driven by the need for enhanced operational efficiency. As industries seek to minimize human error and optimize production processes, automation technologies such as robotics and AI are increasingly integrated into manufacturing systems. In 2024, the market is projected to reach 161.3 USD Billion, reflecting a growing recognition of automation's potential to streamline operations. This trend is expected to continue, with the market expanding significantly as companies invest in smart technologies to remain competitive. The shift towards automation is likely to redefine traditional manufacturing paradigms, fostering innovation and productivity.

The Global Smart Factory Market Industry is witnessing a rising demand for product customization, compelling manufacturers to adopt flexible production systems. Consumers increasingly seek personalized products, prompting factories to implement smart technologies that enable rapid adjustments in production lines. This shift not only enhances customer satisfaction but also drives revenue growth. As the market evolves, it is projected to reach 785.2 USD Billion by 2035, indicating a robust growth trajectory. The ability to swiftly adapt to changing consumer preferences positions smart factories as pivotal players in meeting market demands, thereby reinforcing their significance in the global manufacturing landscape.

Global supply chain optimization is a key driver in the Global Smart Factory Market Industry, as manufacturers seek to enhance their responsiveness and efficiency. The integration of smart technologies allows for better visibility and control over supply chain processes, enabling companies to respond swiftly to market fluctuations. This optimization not only reduces operational costs but also improves customer satisfaction through timely deliveries. As the market evolves, it is projected to expand significantly, with estimates suggesting a value of 785.2 USD Billion by 2035. The emphasis on supply chain efficiency underscores the critical role of smart factories in navigating the complexities of global manufacturing.

By region, the study provides market insights into North America, Europe, Asia-Pacific and Rest of the World. The North American smart factory market accounted for USD 43.6 billion in 2022 and is expected to exhibit a significant CAGR growth during the study period. The aerospace and defense, manufacturing, automotive, and North American health sectors are undergoing several regional investment programs that are expected to lead to significant future growth. Around 13,000 Community Health Workers will receive training thanks to $225 million in American Rescue Plan funding from the Biden-Harris administration (CHWs).

American Rescue Plan made historic investments in response to the urgent need to increase the healthcare workforce and combat pandemic-related burnout.

Further, the major countries studied in the market report are Canada, U.S, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 3: Smart Factory Market SHARE BY REGION 2022 (%)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe's smart factory market accounts for the second-largest market share. The creation of smart technologies and solutions that allow the European manufacturing sector to capitalize on digital potential fully has received strong support from the research and innovation (R&I) initiatives of the European Union. The "Factories of the Future Public-Private Partnership," which intends to assist EU manufacturing enterprises and SMEs in meeting global competitiveness by creating the necessary core enabling technologies across various end-user industries, provides funding for several projects.

Further, the German smart factory market held the largest market share, and the UK smart factory market was the fastest-growing market in the European region.

The Asia-Pacific Smart Factory Market is expected to grow at the fastest CAGR from 2022 to 2030 due to the vibrant ecosystem in nations like Japan, India, and Australia. SMEs are anticipated to lead the adoption of smart manufacturing solutions. The push for cloud adoption across the region is driven by the growing acceptance of disruptive technologies like Industrial 4.0, AI, AR, IoT, and others. In China, 8.8 billion linked devices are anticipated to exist by 2021.

Moreover, China's smart factory market held the largest market share, and the Indian smart factory market was the fastest-growing market in the Asia-Pacific region.

Major market players are investing huge amounts of money in R&D to expand their product portfolios, which will spur further market growth for smart factories. With significant market developments like introducing new products, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations, market participants are also undertaking various strategic initiatives to expand their global footprint. Cost-effective products are a need for competitors in the smart factory industry if they want to grow and thrive in a market that is becoming more and more competitive.

Manufacturing locally to cut operational costs is one of the main business methods manufacturers use in the global smart factory industry to benefit customers and develop the market sector. Some of the biggest advantages to medicine in recent years have come from the smart factory industry. The smart factory market major player, including Emerson Electric Co., Rockwell Automation, ABB Ltd, FANUC Corporation, and others, are attempting to increase market demand by funding R&D initiatives.

Teledyne Technologies Incorporated is a multinational industrial company based in the United States. Teledyne Technologies Inc sells industrial technologies. Contracts with the US government account for roughly one-fourth of Teledyne's revenue. The company's business is divided into four divisions: instrumentation, digital imaging, aerospace and defense electronics, and engineered systems. In September 2021, Teledyne FLIR introduced the latest Blackfly S GigE camera line additions, the BFS-PGE-50S4M-C and BFS-PGE-50S4C-C. With a weight of 53 grams and a high pixel density excellent for integration with compact, low-cost lenses, these 5MP models are especially well suited for incorporation into small handheld devices.

Also, DataMetrex AI Ltd is an information technology firm situated in Canada. It employs machine learning and artificial intelligence to collect, analyze, and present organized and unstructured data. Business segments are AI & technology and Health Security. It has two geographic segments: Canada and South Korea. In September 2022, Datametrex AI Ltd. announced the release of Smart Factory AI technology based on artificial intelligence, big data, and server automation operating system technologies. Furthermore, the company claimed to receive purchase orders totaling approximately CAD 200,000 from several global corporations, including Lotte Data Communication Co., Ltd., Kolon Benit, and Woongjin Co. Ltd.