Encoder ICs Market

Segmentation by Type (Linear Encoder IC, and Rotary Encoder IC); by Position Signal (Absolute Encoder, and Incremental Encoder); by Sensing Technology (Optical Sensing Encoder, Magnetic Sensing Encoder, Capacitive Encoder, and Inductive Encoder); and by Application (Consumer Electronics, Automotive, Healthcare & Medical Devices, Industrial, Assembly Equipment, and Others)– Global Supply & Demand Analysis & Opportunity Outlook 2023-2033

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Report ID: 4527 | Published On: Feb 27, 2023
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Global Encoder ICs Market Size, Forecast, and Trend Highlights Over 2023 - 2033

The global encoder ICs market is estimated to garner a revenue of ~USD 700 Million by the end of 2033 by growing at a CAGR of ~8% over the forecast period, i.e., 2023 – 2033. Further, the market generated a revenue of ~USD 450 Million in the year 2022. The growth of the market can be attributed to the increasing adoption of IoT devices, and the growing usage of encoder ICs in IoT to provide the solution for motion control in industrial automated systems and smart manufacturing. For instance, IoT devices are expected to nearly triple in number from 9 billion in 2020 to over 28 billion by 2030 on a global scale. Furthermore, the growing use of encoder ICs in communication systems for transmitting digital information is another key factor that is anticipated to boost the market growth further throughout the forecast period.

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In addition to these, factors that are believed to fuel the market growth of encoder ICs include the dynamically growing number of complex and extending applications, with the conversion of manual controls to cloud applications and cutting-edge automation is expected to propel the growth of the encoder ICs market. For instance, approximately 75% of businesses have been using the cloud plan for their business growth, whereas around 66% of businesses have transferred their workloads to the cloud in 2020. Globally, enterprise cloud spending is anticipated to reach nearly 16% of IT revenue by 2024. Additionally, the growing use of encoder ICs in medical scanners, scientific apparatus, automation, printers, and so on is predicted to present the potential for market expansion over the projected period.

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Global Encoder ICs Market: Key Insights

Base Year


Forecast Year




Base Year Market Size (2022)

~ USD 450 Million

Forecast Year Market Size (2033)

~ USD 700 Million

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)

Global Encoder ICs Market: Growth Drivers and Challenges

Growth Drivers

  • Higher Expenditure on Digital Transformation – The ever-growing surge to transform the business process from a non-digital to a fully digital platform is expected to promote the implementation of these advanced ICs. For instance, approximately USD 1 trillion is projected to be spent on digital transformation by 2022 throughout the world, whereas the same spending is projected to reach approximately USD 3 trillion by 2025.

  • Rising Trends of the Internet of Medical Things (IoMT) - The integration of sensory information, automatic processing, and communication through networks makes IoMT a promising technology for rapid diagnosis, dynamic monitoring and tracking, and better treatment. According to the United Nations Industrial Development Organization, smart field gospital medical services in China are using CloudMinds’ AI and IoT synced devices, including smart bracelets and rings.

  • Emerging Digital and Wireless Connectivity – For instance, by the year 2030, digital connectivity is projected to be a significant source of connectivity in the entire world. It is estimated to be 5 billion mobile internet users with a 63% penetration rate and 6 billion unique mobile subscribers with a 73% penetration rate by 2025 across the globe. The number of digital devices worldwide is estimated to grow three times the number of people, with 61% of mobile traffic in the Asia-Pacific, Middle East, and Africa regions.

  • Implementation of Industrial Automation and Control – The use of various control systems and equipment, i.e.  computer software and robots, to perform tasks and operate different types of machines and processes in industrial automation are rapidly growing. As per a report released by the World Economic Forum, by 2025, machines are anticipated to perform more current work tasks than humans, compared to the 71% of work being performed by humans currently.

  • Growth of the Automotive Industry – For instance, between 2019 and 2021, nearly 82 million automotive vehicles were manufactured worldwide. Moreover, the proportion of passenger cars that were manufactured during the same period surpassed nearly 57 million cars, accounting for nearly 73% of total motor vehicle production.


  • Mechanical Fragility of Encoder ICs - There are many mechanical issues associated with encoder ICs including, no output, hard-to-fix index pulse, and output indicating the wrong direction during driving. Therefore, the mechanical fragility of encoder ICs is estimated to hamper the market’s growth during the projected time frame.
  • Fluctuations in the Prices of Raw Materials for Semiconductors
  • Supply Chain Issues Related to Geopolitical Tensions

Market Segmentation

The global encoder ICs market is segmented and analyzed for demand and supply by application into consumer electronics, automotive, healthcare & medical devices, industrial, assembly equipment, and others. Out of these segments, the consumer electronics segment is estimated to gain the largest market share over the projected time frame. The growth of the segment can be attributed to the huge adoption of smart home devices throughout the world. The use of several smart home devices has increased as a result of their advantages, including highly optimized home management insights, remote monitoring, interconnectivity, enhanced safety, and so on. For instance, in the United States, currently, around 60 million households are currently using smart home devices, up from 6.9% in the year 2021, and this trend is projected to increase to 64 million by the year 2025.

The global encoder ICs market is also segmented and analyzed for demand and supply by technology into optical sensing, magnetic sensing, capacitive, and inductive encoder. Amongst these four segments, the optical sensing encoder segment is expected to garner a significant share on the back of the rising need for intelligent process automation, coupled with the growing deployment of advanced signal processing algorithms, and the surging use of absolute optical encoders in robotics. Besides this, increasing adoption of cutting-edge motion control systems, along with augmented attention to high-quality surface mount technology (SMT) are some further factors that are anticipated to create prominent opportunities for the growth of the segment over the projected time frame.

Our in-depth analysis of the global encoder ICs market includes the following segments:

              By Type

  • Linear Encoder IC
  • Rotary Encoder IC

             By Position Signal

  • Absolute Encoder
  • Incremental Encoder

            By Sensing Technology

  • Optical Sensing Encoder
  • Magnetic Sensing Encoder
  • Capacitive Encoder
  • Inductive Encoder

           By Application

  • Consumer Electronics
  • Automotive
  • Healthcare & Medical Devices
  • Industrial
  • Assembly Equipment
  • Others

Global Encoder ICs Market Regional Synopsis

The North America encoder ICs market, amongst the market in all the other regions, is projected to hold the largest market share by the end of 2033. The growth of the market can be attributed majorly to the escalating technological advancements in the industrial sector, along with the huge deployment of advanced encoders for industrial automation. As per the data released by the Census Bureau through the Annual Survey of Manufactures, in 2018, more than 30% proportion of workers used technological assistance and robots for various purposes such as transportation equipment, primary metal, plastic, and rubber products in the North America region. Moreover, the presence of multiple encoder ICs manufacturers in the region, and increasing investment for the huge escalation of robotic process automation are other key factors that are projected to accelerate the market’s growth over the forecast period.

Additionally, the Asia Pacific encoder ICs market is also estimated to display notable market growth by the end of 2033. The growth of the market can be attributed to the adoption of the latest technologies, growth in industrial automation, and increasing governmental policies for promoting the adoption of internet of things (IoT) solutions in the manufacturing and industrial sectors. Moreover, increasing spending on artificial intelligence is another major factor that is estimated to propel market growth during the forecast period.  For instance, spending on AI technologies in the Asia Pacific, comprising software, hardware, and services, is expected to climb from nearly USD 21 billion in 2022 to about USD 48 billion in 2026.


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Top Featured Companies Dominating the Global Encoder ICs Market

    • Schneider Electric SE

      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Broadcom Inc.
    • Vishay Intertechnology, Inc.
    • Seiko NPC Corporation
    • Renishaw plc
    • Rockwell Automation Inc.
    • Honeywell International Inc.
    • Hamamatsu Photonics, K. K.
    • Sensata Technologies, Inc.
    • Bourns, Inc.


In The News

  • April 2022: IBSRELA the first and only NHE3 inhibitor for the treatment of irritable bowel syndrome with constipation (IBS-C) in adults, has been made available by the biopharmaceutical company Ardelyx. The first Ardelyx product to receive approval from the US Food and Drug Administration is IBSRELA.
  • March 2022: Indegene a provider of technology-driven healthcare solutions, & meta Me Health, a maker of Regulora and a Prescription Digital Therapeutics (PDT) business, teamed up to offer Regulora as a remedy for irritable bowel syndrome-related stomach pain (IBS).

Global Economic Impact

Request Insights
Despite Inflation & Fearing Recession, Businesses Across the Globe Expected to Do Better in 2023:

In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.

Key Questions Answered in the Report

1) What are the major factors driving the growth of the encoder ICs market?

Ans: Higher expenditure on digital transformation, rising trends of internet of medical things (IoMT), and emerging digital and wireless connectivity are the major factors driving the market growth.

2) What would be the CAGR of encoder ICs market over the forecast period?

Ans: The market is anticipated to attain a CAGR of ~8% over the forecast period, i.e., 2023 – 2033.

3) What are the challenges affecting the encoder ICs market growth?

Ans: Mechanical fragility of encoder ICs, and fluctuations in the prices of raw materials of semiconductors are estimated to be the growth hindering factors for the market expansion.

4) Which region will provide more business opportunities for growth of encoder ICs market in future?

Ans: The market in the North America region is projected to hold the largest market share by the end of 2033 and provide more business opportunities in the future.

5) Who are the major players dominating the encoder ICs market?

Ans: The major players in the market are Schneider Electric SE, Broadcom, Inc., Vishay Intertechnology, Inc., Seiko NPC Corporation, Renishaw Plc., Rockwell Automation, Inc., Sensata Technologies, Inc. and others.

6) How are the company profiles selected?

Ans: The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue generating capacity as well as the new products being launched into the market by the company.

7) What are the segments in the encoder ICs market?

Ans: The market is segmented by type, position signal, sensing technology, application, and by region.

8) Which segment captures the largest market size in by application in the encoder ICs market?

Ans: The consumer electronics segment is anticipated to garner the largest market size by the end of 2033 and display significant growth opportunities.

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