Smart Factory Market Size, Share, Forecast, & Trends Analysis by Offering (Solutions, Services, Technologies), Sector (Automotive, Heavy Machinery & Tools, Aerospace & Defense, Metals & Mining, Electronics & Semiconductors, Pharmaceuticals), and Geography - Global Forecast to 2031

The Smart Factory Market was valued at $89.4 billion in 2023. This market is expected to reach $285.7 billion by 2031 from an estimated $98.5 billion in 2024, at a CAGR of 16.4% during the forecast period of 2024–2031.

Smart Factory Market Size & Forecast

Key factors driving the growth of the smart factory market include the advantages of cloud-based smart factory solutions & services, rising investments in Industry 4.0, and the increasing adoption of robots in manufacturing. Additionally, the proliferation of smart factories in developing nations and advancements in industrial sensor technology are expected to create growth opportunities for market players.

Smart Factory Market Growth Drivers

Advantages of Cloud-Based Smart Factory Solutions & Services

In today’s modern connected world, most factories are inclined toward deploying cloud-based solutions & services. Leading industry experts expect this trend to continue over the coming years. Several factories are moving their workloads to the cloud to gain more agility, reduce time to market, and lower expenses. Cloud-based smart factory solutions allow manufacturers to collect, process, and analyze data from industrial or connected devices at the edge. They allow for managing factory IT infrastructure, centralized data storage & transmission, and effective management of distributed factory operations through a single cloud-based platform.

Deploying cloud-based smart factory solutions is also more affordable than on-premise deployment, as the latter involves the costs of implementing & maintaining the supporting infrastructure and recruiting suitable expertise to manage the solutions. As a result, cloud-based smart factory solutions & services are increasingly being adopted by small & medium-sized factories. These solutions offer integrated performance monitoring & debugging tools, automatic upgrades, and periodic installation of new features.

Some of the recent developments in this market are as follows:

• In June 2022, Yokogawa Electric Corporation (Japan) launched the OpreX Asset Health Insights Service, which is a cloud-based plant asset monitoring service that collects, refines, and aggregates operational technology (OT) data from distributed assets. It provides a 360-degree view of operational assets, simplifying asset management and increasing both operational and business efficiency.
• In November 2022, Honeywell International Inc. (U.S.) launched Honeywell Forge Performance+, a cloud-based solution, to help customers improve asset performance, reduce equipment maintenance costs, and enhance operational productivity.

Such initiatives by market players are expected to drive the demand for cloud-based smart factory solutions & services, supporting the growth of the smart factory market.

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Smart Factory Market Trends

Incorporation of IloT and Digital Twins in Factories

Technologies such as the Industrial Internet of Things (IIoT) and digital twins are transforming factories. Digital twin technology offers manufacturing process optimization, improves OEE through reduced downtime, enhances product traceability processes, and allows for remote equipment troubleshooting. Industrial Internet of Things (IIoT) solutions enable manufacturers to operate smarter using connected assets, real-time data analytics, and asset monitoring capabilities. Factories are leveraging IIoT solutions for condition-based & predictive maintenance, manufacturing process optimization, and smart logistics.

Furthermore, key market players are introducing new solutions to improve business performance. For instance, in November 2022, Advantech Co., Ltd. (Taiwan) and Actility, SA (France) launched a new AI-based Intelligent Predictive Maintenance IoT Solution for rotating machinery. The solution supports machine operation teams in realizing machine prognostics and health management. Similarly, in April 2022, Amazon Web Services, Inc. (a subsidiary of Amazon.com, Inc.) (U.S.) launched the AWS IoT TwinMaker. This new service makes it faster and easier for developers to create digital twins of real-world systems like buildings, factories, industrial equipment, and production lines.

Increasing Adoption of Smart Technologies in Pharmaceutical Manufacturing

The adoption of smart technologies in pharmaceutical manufacturing is a key trend in this market. The pharmaceutical sector is increasingly adopting smart factory solutions to enhance flexibility, improve production efficiency, and reduce waste in continuous manufacturing processes. These solutions offer several advantages, including complete product tracking, rigorous safety checks & quality control, improved inventory accuracy, and faster response times. Advanced systems like Automated Material Handling Systems (AMHS) and Automated Storage and Retrieval Systems (ASRS) are significantly boosting order fulfillment performance for both small regional distributors and large global corporations. ASRS technologies are particularly adept at managing industry-specific needs, such as controlled inventory access, temperature-sensitive storage for medications, and hazardous materials handling, while also ensuring order and inventory accuracy.

The growing demand for ASRS and AMHS in the pharmaceutical sector is driven by the need to minimize contamination risks and enhance employee safety. Additionally, warehouse automation solutions enable real-time quality control insights, reducing the need for human contact with manufacturing substances and further improving safety.

Smart Factory Market Analysis: Key Findings

By Offering: the Solutions Segment to Dominate the Smart Factory Market in 2024

Based on offering, the smart factory market is segmented into solutions, services, and technologies. In 2024, the solutions segment is projected to dominate the smart factory market, capturing over 73.0% of the total share. This significant share can be attributed to growing investments aimed at modernizing traditional production facilities, increasing demand for enhanced productivity and efficiency analysis, and a rising need for secure and digitalized production processes. Furthermore, there is a rising demand for these solutions as they offer numerous benefits, including improved data insights, enhanced plant efficiency, faster resolution of issues, efficient product tracking across the value chain, seamless data exchange between systems, and enhanced safety & quality control.

By Sector: the Automotive Segment to Dominate the Smart Factory Market in 2024

Based on sector, the smart factory market is segmented into automotive, heavy machinery & tools, aerospace & defense, metals & mining, electronics & semiconductors, medical devices, food & beverage, oil & gas, pharmaceuticals, fast-moving consumer goods, paints & chemicals, energy & power, pulp & paper, and other sectors. In 2024, the automotive segment is projected to dominate the smart factory market, capturing over 16.0% of the total share. This significant share can be attributed to the rising demand for personalized and advanced automotive features, an increased focus among manufacturers on developing cutting-edge automobile warehouses, and the growing integration of operational technology with information technology to enhance data-driven decision-making. Additionally, strategic partnerships among market players to develop advanced solutions are contributing to this segment’s growth. For instance, in September 2022, Hyundai Motor Europe GmbH (Germany) partnered with TeamViewer US, Inc. (U.S.) to accelerate digital innovation in automotive smart factories.

However, the pharmaceuticals segment is anticipated to experience the highest compound annual growth rate during the forecast period. This growth is driven by factors such as technological advancements in pharmaceutical manufacturing processes, the rising need for cost-management strategies in the pharmaceutical sector, and the increasing adoption of smart technologies in pharmaceutical manufacturing.

Geographic Analysis

Asia-Pacific to Dominate the Smart Factory Market in 2024

Based on geography, the smart factory market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2024, Asia-Pacific is projected to dominate the smart factory market, capturing over 38.0% of the total share. Asia-Pacific’s significant market share can be attributed to factors such as the presence of prominent market players, rapid industrialization, government initiatives aimed at promoting the use of industrial robots, the rising adoption of Industry 4.0 technologies, and increasing demand for affordable IIoT solutions. Additionally, initiatives by market players to broaden their operations and expand their businesses across the region are contributing to the growth of the smart factory market in Asia-Pacific. For instance, in October 2022, the Asset Lifecycle Intelligence division of Hexagon (Australia) expanded its presence in Asia-Pacific through a partnership with HxGN EAM, formerly owned by Infor (U.S.).

Furthermore, Asia-Pacific is anticipated to experience the highest compound annual growth rate of 17.1% during the forecast period. The market growth in Asia-Pacific is driven by the rising demand for advanced data analytics capabilities in production processes, the increasing integration of IIoT and digital twins in manufacturing, and the widespread adoption of industrial automation across the region.

Smart Factory Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios and geographic presence and the key growth strategies adopted by them over the past 3–4 years. Some of the leading companies in the smart factory market are ABB Ltd (Switzerland), Emerson Electric Co (U.S.), General Electric Company (US.), Rockwell Automation, Inc. (U.S.), Schneider Electric SE (France), Siemens AG (Germany), Mitsubishi Electric Corporation (Japan), Honeywell International Inc. (US), Yokogawa Electric Corporation (Japan), Endress+Hauser Group (Switzerland), SAP SE (Germany), Cisco Systems, Inc. (U.S.), Ubisense Limited (U.K.), Oracle Corporation (U.S.), IBM Corporation (U.S.), Microsoft Corporation (U.S.), FANUC Corporation (Japan), Omron Corporation (Japan), Robert Bosch GmbH (Germany), and Cognex Corporation (U.S.).

Smart Factory Industry Overview: Latest Developments from Key Industry Players

• In October 2022, Rockwell Automation, Inc. (U.S.) launched its My Equipment Digital. This solution enables new functionality with digital collection and updating of industrial automation asset data through network-based devices.
• In November 2021, SAP SE (Germany) partnered with Boehringer Ingelheim GmbH (Germany) to create a smart application to track counterfeit pharmaceuticals.
• In October 2021, ABB Ltd. (Switzerland) launched its ABB Ability Genix Asset Performance Management Suite. The Genix Asset Performance Management Suite brings next-generation AI-based predictive maintenance, asset reliability, and integrity insights to process and utility industries.

Smart Factory Market Research Summary

Key questions answered in the smart factory market report: