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Digital Factory Investment will Reach $673 Billion

The manufacturing sector will undergo a transformation as new technologies enable innovative factory automation solutions. The 'Digital Factory' market will grow at a compound annual growth rate of 33 percent to reach $673 billion in 2026, according to the latest worldwide market study by ABI Research.

These new technology investments include the actual hardware for entire industrial robots, collaborative robots, connected PLCs, intelligent industrial battery management systems, electric motors, pumps, tank management systems and smart glasses.

Digital Factory Market Development

It also includes data and analytics service, device and app platform, device interconnections, network service, professional service and security service revenues for all the above applications plus asset tracking and other equipment monitoring.

Of these applications, only asset tracking solutions include connections both on and off the factory floor.

“Currently, most manufacturing equipment still communicates in proprietary protocols and connecting it in a cost-efficient way without too much custom code often requires the expertise of Industrial Internet of Things (IIoT) integration specialists such as Telit or PTC Kepware,” said Pierce Owen, principal analyst at ABI Research.

For new factories, ABI analysts have started to see how telecom service providers and network infrastructure vendors can deploy private LTE, but so far, it only works if the plant owner has the negotiating power to demand cellular connected equipment from all its suppliers.

According to the ABI assessment, these early deployments could build trust and open new opportunities for wireless cellular technology in factories.

The automotive industry leads the way in the adoption of most digital factory technology technologies and represents the largest opportunity globally with $139 billion in digital factory revenues forecast for 2030, but this does vary somewhat country to country.

For instance, by the end of 2022, digital factory revenues in electronics manufacturing will overtake those in the automotive industry in South Korea, the fifth largest 'Smart Manufacturing' market.

Outlook for Industry Transformation Applications

“The automotive industry has demonstrated a willingness to scale transformative technologies ranging from generative design and additive manufacturing to IIoT connectivity and robotics of all kinds more than any other industry, but other industries will start to catch up over the next decade,” Owen concluded.

The companies that follow automotive OEMs’ lead first and scale technologies with proven value will gain a competitive advantage. Likewise, vendors that not only compete at the highest level in automotive but also continuously pursue new types of customers in other industries will build sustainable relationships and advantages across the sector.

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