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Digital factory revenues could exceed $1 trillion by 2030

06 January, 2020

Technology investments in the industrial and manufacturing sector are set to soar from $59bn in 2019 to $375bn by 2030. If hardware revenues are included, that figure could climb to more than $1 trillion, according a study by the analyst, ABI Research.

Manufacturing is undergoing a digital revolution and is investing heavily in IIoT (Industrial Internet of Things) technologies such as artificial intelligence (AI), augmented reality (AR), robotics (including AGVs and mobile robots) and cloud-based simulation and modelling, says ABI in a new report on the digital factory market.

“The transformative shift toward Industry 4.0 technologies and the broader field of software-defined manufacturing (SDM) presents a massive opportunity for a wide range of technology providers and implementers,” suggests Ryan Martin, a principal analyst covering the industrial and manufacturing sector for ABI.

Intelligently connected hardware represents the lion’s share of the revenues, expanding from $200bn in 2019 to $800bn by 2030, however its proportion of the market will shrink as software and services expand. After hardware, data and analytic services is the fastest-growing segment in terms of generating revenues, and is projected to reach more than $185bn by 2030, up from just $11bn in 2019.

“As the amount of custom code required to deploy new solutions on the factory floor drops, data and analytic service revenue growth in smart manufacturing will accelerate,” Martin explains.

Machine tools, asset tracking and connected PLCs, will experience the biggest growth in terms of connected service revenues over the next 10 years. ABI predicts that by 2030, revenues from machine tools – including 3D printers as well as CNC machines, lathes, mills and drills – will reach $134bn, asset tracking will reach $78bn, and PLCs will hit $40bn.

Where the growth will come: predicted hardware revenues by application
Source: ABI Research

“Industry 4.0 is creating millions of new end-points that need to be interconnected,” says Martin. “However, the existing infrastructure can’t support it, which is creating an opportunity for connectivity experts and providers to step in.”

ABI estimates that there are currently 260 million digital factory connections worldwide, with 230 million of them being via fixed lines. But, by 2023, many of the 5.5 billion expected digital factory connections will be wireless. “This is being driven by the rise in newly-connected endpoints, including sensors, mobile robots, advanced asset tracking, condition-based monitoring, predictive maintenance applications, and so on,” says Martin.

Although Industry 4.0 is a global phenomenon, roughly half of the global revenue growth will be come from China and the US, followed by Germany and Japan.

“There is a long and compelling list of digital transformation technologies and pilot projects that are now graduating to the factory floor,” Martin concludes. “The companies and production environments embracing these opportunities have quickly seen the benefits and want to scale, rather than risk falling behind.”

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