Smart Manufacturing Market Outlook:
Smart Manufacturing Market size was over USD 329.93 billion in 2025 and is projected to reach USD 1.31 trillion by 2035, witnessing around 14.8% CAGR during the forecast period i.e., between 2026-2035. In the year 2026, the industry size of smart manufacturing is evaluated at USD 373.88 billion.
Key Smart Manufacturing Market Insights Summary:
Regional Highlights:
- North America smart manufacturing market will secure around 35% share by 2035, driven by the strong presence of tech providers and industrial automation.
- Asia Pacific market will achieve significant revenue share by 2035, driven by industrial transformation and government-backed Industry 4.0 projects.
Segment Insights:
- The software segment in the smart manufacturing market is projected to hold a 38% share by 2035, driven by the collaboration of companies to introduce AI-assisted programs into manufacturing processes to improve output efficiency.
- The automotive segment in the smart manufacturing market is projected to capture a 32% share by 2035, influenced by the implementation of lean asset strategies to manage inflation-driven expenses and maximize EV investments.
Key Growth Trends:
- Integration of technologies for real-time production
- Shortage of skilled labor in factories
Major Challenges:
- Cybersecurity risks in connected manufacturing systems
Key Players: ABB GroupSiemens AktiengesellschaftHoneywell International Inc.General Electric CompanyRockwell Automation, Inc.Schneider Electric SERobert Bosch GmbHMitsubishi Electric CorporationFANUCHP Development Company, L.P.
Global Smart Manufacturing Market Forecast and Regional Outlook:
Market Size & Growth Projections:
- 2025 Market Size: USD 329.93 billion
- 2026 Market Size: USD 373.88 billion
- Projected Market Size: USD 1.31 trillion by 2035
- Growth Forecasts: 14.8% CAGR (2026-2035)
Key Regional Dynamics:
- Largest Region: North America (35% Share by 2035)
- Fastest Growing Region: Asia Pacific
- Dominating Countries: China, United States, Germany, Japan, South Korea
- Emerging Countries: China, India, South Korea, Mexico, Brazil
Last updated on : 6 May, 2025
The surging focus on production uptime, operational agility, and manufacturing precision is boosting the adoption of advanced analytics as well as industrial automation. To fulfil market requirements, companies are improving their ability to deploy edge AI. In September 2024, Edge Impulse and STMicroelectronics formed a strategic alliance to strengthen AI applications running in edge computing systems. This partnership allows edge machines to carry out real-time machine learning operations while generating quick processing and data insights without cloud-dependent infrastructure. The transition allows manufacturers to execute anomaly detection procedures as well as failure predictions and workflow optimization on factory floors, leading to enhanced automated system efficiency.
The emphasis on intelligent manufacturing is evident through the adoption of advanced analytics and digital simulation technologies. Organizations prefer to use digital twin platforms, their cloud-based simulation environments, and AI-driven insights to optimize operational improvements and reduce implementation risks, and accelerate their continuous improvement activations. Manufacturers benefit from these technologies, which allow them to virtually optimize their processes for better resilience and efficiency. Digital twins and cloud simulations allow businesses to make future-oriented decisions due to their ability to virtualize operational outcomes using different scenario models before actual implementation steps. These tools are shifting from pilot projects into standardized deployment across industries, owing to the increasing accessibility of digital infrastructure.
Smart Manufacturing Market Growth Drivers and Challenges:
Growth Drivers
- Integration of technologies for real-time production: Manufacturers are integrating technologies such as IoT and AI as they require real-time production insights in their operations. In October 2023, Rockwell Automation and Microsoft expanded their partnership to incorporate generative AI capabilities into industrial automation systems. The joint initiative is aimed at enhancing engineering outputs through automated natural language programming, reducing the production cycles.
Business operations are utilizing AI-driven methods to increase operational performance while minimizing unexpected breakdowns of equipment. Manufacturers are using advanced analytics platforms combined with machine vision and predictive intelligence tools that help them detect equipment failures and performance issues proactive. These capabilities are becoming essential for smart manufacturing environments by providing real-time production line visibility with enhanced operational agility for handling production difficulties. AI and IoT technology integration is driving manufacturers to revolutionize their management of assets, quality control, and continuous improvement throughout their manufacturing value chain.
- Shortage of skilled labor in factories: Manufacturing companies are rapidly deploying automated robotic solutions due to the ongoing labor scarcity, as they need to improve their productivity to address expanding market requirements. For instance, in September 2023, ABB announced a USD 280 million investment in a new robotics factory in Sweden. The facility targets the rising demand for collaborative robots and advanced robotic solutions as manufacturers seek to reshore operations to counter supply chain problems. Such strategic investments demonstrate the dedication of such manufacturing firms to transforming their production facilities while helping businesses that face employee shortage issues.
Challenges
- Cybersecurity risks in connected manufacturing systems: Digitization processes in factories are increasing their exposure to industrial operational technology and IoT infrastructure cyberattacks. Vulnerability of connected devices, as well as edge nodes and cloud-based systems, enables hackers to breach data while causing halts in production and potentially creating unsafe conditions. Commercial entities that handle protected intellectual property along with regulatory requirements are facing heightened security risks. Manufacturers, as a result, are avoiding the adoption of smart manufacturing systems due to fear of economic losses and disruptions. Industrial environments are facing significant restraint regarding digital transformation since there are no strong standardized cybersecurity protection frameworks.
Smart Manufacturing Market Size and Forecast:
| Report Attribute | Details |
|---|---|
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Base Year |
2025 |
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Forecast Period |
2026-2035 |
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CAGR |
14.8% |
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Base Year Market Size (2025) |
USD 329.93 billion |
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Forecast Year Market Size (2035) |
USD 1.31 trillion |
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Regional Scope |
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Smart Manufacturing Market Segmentation:
Component
The software segment is expected to hold a revenue of 38% during the forecast period, as various companies are collaborating to introduce AI-assisted programs into manufacturing processes, which helps accelerate automation and improve output efficiency. In October 2023, Microsoft and Siemens released the Siemens Industrial Copilot as a generative AI assistant that optimizes automation code while reducing the simulation processes from weeks to minutes. The tool is already assisting companies such as Schaeffler AG to improve their engineering process efficiency. In addition, the integration of Microsoft Teams with Siemens Teamcenter is facilitating cross-functional collaboration in real-time across factory operations.
Companies are developing their own ERP platforms to help build internal resources while decreasing dependence on foreign software providers. In April 2023, Huawei introduced MetaERP, a proprietary enterprise resource planning system designed to replace its legacy solutions. The system supports the complete business scenarios of the company and processes operational data equivalent to 80% of its total volume, making it a critical platform for self-reliant digital transformation. Such developments are creating lucrative opportunities for the smart manufacturing market.
End-Use
The automotive segment is expected to account for a share of 32% during the forecast period. The automotive companies are increasingly implementing lean asset strategies as they help control rising expenses from inflation while maximizing investments toward electric mobility. For instance, in March 2025, Mazda Motor announced measures to maintain its electrification investments at 1.5 trillion yen until 2030. The approach is utilizing existing production lines to build new EV models, that is reducing the necessary investments by 85% and cuts the manufacturing times by 80%. Such developments are fueling the market growth.
Our in-depth analysis of the global smart manufacturing market includes the following segments:
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Component |
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Technology
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Deployment |
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Enterprise Size |
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End use |
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Vishnu Nair
Head - Global Business DevelopmentCustomize this report to your requirements — connect with our consultant for personalized insights and options.
Smart Manufacturing Market Regional Analysis:
North America Market Insights
The smart manufacturing market in North America is expected to dominate the global market with a share of 35% during the analysis period, due to a strong presence of advanced technology providers. Manufacturing sectors experience innovation through integrated solutions that enhance real-time decision-making and process efficiency by companies focused on AI and cloud computing, and industrial automation. The adoption of smart systems by manufacturers is rapidly increasing due to this technological ecosystem, which helps them stand unique in the rapidly changing business landscape.
The U.S. market is expected to grow at a steady pace during the assessment period. The installation of 5G infrastructure enables the smooth implementation of real-time control methods within industrial production facilities. Cloud-native manufacturing software adoption is also advancing towards delivering new production models by transforming established manufacturing practices. These platforms enable manufacturing operators to achieve flexible integration across various facilities through which they obtain operational flexibility, cost-effectiveness, and accelerated Industry 4.0 technology implementation speed. Such innovations are propelling the growth of the market.
Asia Pacific Market Insights
The Asia Pacific smart manufacturing market is expected to account for a significant share during the forecast period, attributed to the rapid development of industries. The governments in India, Japan, and China are significantly investing in Industry 4.0 projects to upgrade their production systems while decreasing their workforce requirements. The substantial adoption of robotics, together with machine learning and industrial IoT, is becoming prevalent due to this transformation in industry practices.
Focus on sustainable manufacturing, by governments adopting smart technologies at an accelerated rate, is also bolstering the market growth. The requirements of strict environmental regulations are driving manufacturers to use digital tools for tracking energy use as well as waste reduction and process enhancement. The market for smart manufacturing is growing due to sustainable and efficient operations, which are becoming the main priorities among industry players.
The China smart manufacturing market is projected to witness rapid growth in the forthcoming years. The commitment the country makes to strengthen its high-tech domestic supply chain is driving powerful growth in its market. The country is accelerating efforts to localize its production methods while seeking to eliminate dependence on international automated machinery, due to global trading changes and supply chain interruptions. This acceleration is leading to domestic innovation funding for domestic innovation in semiconductor manufacturing, industrial software, and smart control systems development.
Smart Manufacturing Market Players:
- ABB Group
- Company Overview
- Business Strategy
- Key Technology Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- Siemens Aktiengesellschaft
- Honeywell International Inc.
- General Electric Company
- Rockwell Automation, Inc.
- Schneider Electric SE
- Robert Bosch GmbH
- Mitsubishi Electric Corporation
- FANUC
- HP Development Company, L.P.
The smart manufacturing market is highly competitive, driven by rapid technological advancements and strategic collaborations. Key players such as Siemens, Rockwell Automation, Schneider Electric, Honeywell, and ABB are continuously innovating through AI, IoT, and cloud-based solutions to enhance factory automation and operational efficiency. These companies are investing heavily in R&D and forming alliances to expand their digital manufacturing portfolios. Emerging players and startups are also gaining traction by offering specialized solutions like predictive maintenance and digital twins. The market is witnessing frequent product launches and global expansion initiatives, intensifying competition and pushing companies to differentiate through smart, scalable, and sustainable solutions. Here are some key players operating in the global market:
Recent Developments
- In March 2025, HCL Tech announced the launch of HCLTech Insight, an agentic AI-powered Industry Focused Repeatable Solution (IFRS) designed to equip manufacturers with advanced data insights and analytics capabilities.
- In February 2025, Delta announced its participation in ELECRAMA 2025 under the theme of Smart Manufacturing by launching its new D-Bot series Collaborative Robots (Cobots) in the Indian market. These 6-axis cobots boast payload capacities up to 30 kg, and speeds as fast as 200 degrees per second, thus designed to empower industries with smarter, more efficient production processes, such as electronics assembly, packaging, materials handling, as well as welding.
- Report ID: 4975
- Published Date: May 06, 2025
- Report Format: PDF, PPT
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