GLOBAL FACTORY AUTOMATION MARKET (2025 - 2030)

The Factory Automation Market was valued at USD 210.03 Billion in 2025 and is projected to reach a market size of USD 398.16 Billion by the end of 2030. Over the forecast period of 2026-2030, the market is projected to grow at a CAGR of 13.65%.

The factory automation market is experiencing rapid expansion, supported by growing expectations for enhanced efficiency, higher productivity, and improved accuracy across manufacturing and business operations. It includes technologies such as robotics, control systems, and software solutions designed to automate tasks that were traditionally carried out manually. The sector is propelled by advancements in Industry 4.0, the Internet of Things (IoT), and artificial intelligence, which collectively enable more intelligent and data-driven workflows. Increasing labour costs, the demand for error minimization, and the shift toward sustainable production practices further accelerate the adoption of automation solutions. Emerging developments, including collaborative robots (cobots), predictive maintenance, and digital twin technologies, are influencing the market’s future direction. With widening applications and continuous technological progress, the commercial automation industry is positioned for substantial global growth.

Key Market Insights:

The upcoming phase of  expected to be driven by the same core factors that initially introduced robotics and automated systems into workplaces.

Reducing the need for human involvement in tasks that are dirty, monotonous, or hazardous. Enhancing quality by minimizing errors and inconsistencies.

Lowering production expenses by substituting increasingly costly labour with more affordable automated technologies.

Modern automation solutions now offer expanded capabilities, enabling their deployment in settings that were previously unsuitable for automation and unlocking new avenues of value creation within manufacturing operations.

Cost-efficiency assessments indicate that combining robotics with human labor can deliver labor-cost reductions of 20–30%, prompting smaller facilities to implement collaborative robots and automated guided vehicles.

Market Drivers:

Energy-efficiency regulations and rising cost pressures are key factors propelling the growth of the market.

Governments have invested heavily in energy-efficiency initiatives and now expect the industrial sector to contribute significantly to global CO₂-reduction goals. In response, manufacturing facilities are adopting variable-speed drives, intelligent compressors, and AI-supported scheduling systems that adjust production to align with periods of greater renewable energy availability. The United Nations Economic Commission for Europe continues to advocate for best practices in industrial energy efficiency, emphasizing the connection between advanced digital controls and decarbonisation efforts. Within the factory automation and industrial controls market, suppliers increasingly bundle carbon-tracking dashboards with programmable logic controllers, transforming regulatory compliance into an added-value offering. As utilities escalate time-of-use pricing, quick-return investments, such as smart lighting solutions and heat-recovery technologies, are gaining priority in corporate capital planning.

Escalating labor shortages within the manufacturing sector are emerging as a significant catalyst for market growth.

Retirements and declining workforce participation continue to create significant gaps on production floors worldwide. In response, companies are accelerating their adoption of automation, with 54% of planned investments aimed at automating routine activities and 75% of senior leaders citing an increasing demand for data-oriented roles to support emerging technologies. In Japan, demographic challenges are driving the development of autonomous vehicles and AI-enabled construction machinery, innovations that are ultimately being transferred into global manufacturing environments.

Market Restraints and Challenges:

The high upfront cost of automation solutions continues to act as a significant constraint on market expansion.

A major obstacle to the widespread adoption of industrial automation is the substantial upfront investment required to implement automated systems. These costs include expenditures on hardware such as robots, sensors, and PLCs, as well as software solutions, system integration, and employee training. For small and medium-sized enterprises (SMEs), these expenses can be difficult to absorb, often delaying or discouraging the shift toward automated operations. Moreover, the ongoing need for maintenance and upgrades adds to the financial burden. Although long-term advantages, such as improved efficiency and higher productivity, are well-recognized, the initial capital requirements and budget limitations remain challenging, particularly for developing markets and smaller businesses.

Market Opportunities:

Industry 4.0 advancements, the rise of edge computing, and the growing focus on energy optimization are creating significant opportunities within the market.

Despite existing challenges, demand for intelligent automation systems is rising quickly as global investment in advanced Industry 4.0 technologies accelerates. Manufacturers are implementing sophisticated robotics, IoT-enabled real-time monitoring, and AI-based control platforms to achieve greater efficiency, operational agility, and product consistency. Solutions such as edge computing and digital twin technology are enabling decentralized decision-making and predictive fault identification with minimal latency. The adoption of smart sensors, adaptive drive systems, and condition-based maintenance tools is also supported by the growing focus on energy-efficient, low-carbon, and zero-carbon operations. As resilient supply chains and smart manufacturing become strategic priorities for both governments and enterprises, factory automation is emerging as a central component in the digital transformation of sectors including automotive, food processing, and electronics.

GLOBAL FACTORY AUTOMATION MARKET

Market Segmentation:

Segmentation By Component:

• Industrial Robots
• Controllers
• Sensors
• Software
• Drives
• Others

Industrial robots account for a substantial portion of the factory automation market, largely due to their extensive use in automotive, electronics, and metalworking industries for applications such as welding, assembly, and material handling. The adoption of collaborative robots (cobots) is further broadening the scope of automation by enabling safer and more efficient interaction between humans and machines on production floors. As manufacturers increasingly prioritize precision and operational flexibility, the demand for advanced robotic solutions continues to grow.

Sensors are a critical element of the factory automation ecosystem, facilitating real-time monitoring and data acquisition throughout the manufacturing process. They play a central role in predictive maintenance, quality assurance, and process optimization. Advances in sensor technology, including wireless and intelligent sensor integration, are enhancing the connectivity and intelligence of automated systems. This enables manufacturers to achieve greater operational visibility and responsiveness, resulting in improved product quality and reduced equipment downtime.

Controllers and drives form the backbone of automated operations, providing precise control and coordination of machinery and equipment. Programmable logic controllers (PLCs) and distributed control systems (DCS) are commonly employed to manage complex automation workflows, ensuring smooth operation and process synchronization. Drives are essential for regulating motor speed, torque, and positioning, contributing to both energy efficiency and process optimization. Ongoing innovations in these components, including AI-enhanced control algorithms, are further improving the performance, reliability, and adaptability of factory automation systems.

By Solution:

• Distributed Control System (DCS)
• Supervisory Control and Data Acquisition (SCADA)
• Human Machine Interface (HMI)
• Manufacturing Execution System (MES)
• Programmable Logic Controller (PLC)
• Others

SCADA systems are extensively utilized for their capability to offer centralized monitoring and control of industrial operations, allowing operators to make data-driven decisions in real time. These systems are particularly vital in sectors such as oil and gas, water treatment, and power generation, where continuous oversight and rapid response to anomalies are critical for both operational safety and efficiency.

Distributed Control Systems (DCS) are engineered to manage large-scale, complex industrial processes by distributing control functions across multiple nodes. DCS solutions are widely employed in process-intensive industries, including chemicals, pharmaceuticals, and food & beverage, where precise coordination and control of numerous process variables are essential. The integration of advanced analytics and machine learning into DCS platforms is enhancing their ability to predict equipment failures, optimize process performance, and lower operational costs. As industries increasingly focus on process efficiency and regulatory compliance, the demand for sophisticated DCS solutions is anticipated to rise.

Manufacturing Execution Systems (MES) serve as a critical link between enterprise resource planning (ERP) systems and shop-floor operations. MES platforms enable manufacturers to monitor, track, and control production activities in real time, ensuring compliance with quality standards and adherence to production schedules.

By Industry Vertical:

• Automotive
• Pharmaceuticals
• Food & Beverage
• Metals & Mining
• Electronics & Semiconductors
• Oil & Gas
• Others

The automotive sector continues to be a leading driver of the factory automation market, utilizing automation technologies to optimize assembly lines, improve product quality, and lower manufacturing costs. The incorporation of robotics, vision systems, and automated guided vehicles (AGVs) has transformed automotive production, enabling mass customization and just-in-time manufacturing. As the industry increasingly shifts toward electric vehicles and autonomous driving technologies, the demand for advanced automation solutions is expected to grow further.

The food and beverage industry is another significant contributor to the market, fueled by the need for consistent product quality, strict hygiene standards, and efficient manufacturing operations. Automation technologies, including automated packaging, sorting, and quality inspection systems, are widely implemented to boost productivity while minimizing manual intervention. Rising consumer demand for diverse and customized products is encouraging manufacturers to adopt flexible automation solutions capable of handling frequent product changeovers and shorter production cycles. Additionally, regulatory requirements for food safety and traceability are accelerating the implementation of automation technologies that enhance compliance and supply chain transparency.

Pharmaceutical manufacturing has also experienced substantial automation adoption, driven by the need for high-quality, safe, and fully traceable products. Automation systems are employed to manage complex processes such as formulation, filling, packaging, and serialization, mitigating risks of contamination and human error while ensuring operational efficiency and regulatory compliance.

Market Segmentation: Regional Analysis:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

The Asia Pacific region continues to lead the factory automation market, capturing the largest share of global revenues. This leadership is driven by the region’s robust manufacturing base, particularly in countries such as Japan, China, South Korea, and India, where significant investments in industrial automation are being made to boost productivity and global competitiveness. Government initiatives supporting smart manufacturing, combined with the presence of prominent automation solution providers, are further stimulating market expansion. The Asia Pacific market is expected to sustain strong growth, reflecting the ongoing digital transformation across its manufacturing sectors.

North America holds the position of the second-largest regional market. The region benefits from a well-established manufacturing ecosystem, advanced technological infrastructure, and early adoption of cutting-edge automation solutions. Key industries driving automation in North America include automotive, electronics, and pharmaceuticals, supported by a skilled workforce and favorable regulatory conditions. Additionally, efforts to reshore manufacturing operations and strengthen supply chain resilience are contributing to rising demand for factory automation technologies. As manufacturers aim to enhance operational efficiency, reduce labor costs, and maintain product quality, the North American market is projected to experience steady growth throughout the forecast period.

COVID-19 Impact Analysis:

The global COVID-19 pandemic had an unprecedented impact on the factory automation market, causing demand across all regions to fall below pre-pandemic expectations. The subsequent increase in market CAGR reflects a recovery as demand gradually returned to pre-pandemic levels. The pandemic disrupted market growth, creating significant challenges for manufacturers and production companies. Global supply chain interruptions emerged as a primary issue, with delays in the production and delivery of critical automation components such as sensors, controllers, and actuators. These disruptions slowed ongoing automation projects and hindered overall market momentum. Key industries, including automotive, aerospace, and general manufacturing, major adopters of automation technologies, faced plant shutdowns, workforce shortages, and reduced demand, resulting in postponed or canceled automation investments. Financial pressures on small and medium-sized enterprises (SMEs) further limited their ability to invest in costly automation solutions, constraining market expansion. The pandemic also exposed limitations in the flexibility of conventional automation systems, as organizations struggled to adapt quickly to rapidly changing market conditions. While the global market is now in recovery, these challenges have highlighted vulnerabilities that are likely to influence future market dynamics.

Latest Market News:

In March 2025, Siemens AG finalized its acquisition of Altair Engineering Inc. for approximately USD 10 billion, representing a major enhancement of its industrial software portfolio. This strategic acquisition strengthens Siemens AG’s position in simulation and industrial artificial intelligence (AI) by incorporating Altair’s expertise in mechanical and electromagnetic simulation, high-performance computing (HPC), data analytics, and AI technologies.

In December 2024, Fuji Electric Co., Ltd. announced plans to expand its switchboard and uninterruptible power supply (UPS) production capabilities at the Kobe Factory. The expansion includes the installation of skid system production equipment, enabling consolidated wiring, testing, and inspection processes, thereby reducing on-site installation time by 40%. The investment is expected to boost production capacity by 50%, helping to mitigate labor shortages and improve efficiency for internet data center projects.

In April 2024, Omron Corporation launched the VT-X850, a next-generation 3D Computed Tomography (CT) Automatic X-ray Inspection (AXI) system designed for electric vehicle (EV) Surface Mount Technology (SMT) production lines. This advanced inspection solution addresses the challenges of evaluating large, complex, and dense components, integrating a high-voltage X-ray tube with AI to deliver enhanced speed, precision, and usability.

Latest Trends and Developments:

One of the most transformative trends in the factory automation market is the increasing adoption of collaborative robots. Unlike traditional industrial robots, which operate in isolated settings, collaborative robots are specifically designed to work safely and efficiently alongside human operators. They feature advanced sensors, machine learning capabilities, and built-in safety mechanisms, enabling shared workspaces and cooperative task execution. The demand for collaborative robots is rising due to their flexibility, ease of deployment, and cost-effectiveness. Small and medium-sized enterprises (SMEs), which may lack the resources for full-scale automation, are increasingly utilizing collaborative robots to enhance productivity without significant capital expenditure. These robots are being implemented in a variety of applications, including assembly, packaging, material handling, and quality inspection.

Key Players in the Market:

ABB Ltd.

Fuji Electric Co., Ltd.

Emerson Electric Co.

Mitsubishi Electric Corporation

Honeywell International Inc.

Rockwell Automation, Inc.

Omron Corporation

Siemens AG

Schneider Electric SE

Yokogawa Electric Corporation