Rotary Encoder Market Size, Share, Growth, And Industry Analysis By Type (Incremental Encoders, Absolute Encoders) By Application (Metal Forming & Fabrication, Servo motor, Elevator Industry, Machine Tool, Material Handling), Regional Insights and Forecast From 2025 To 2034

• 

  Request a Free sample to learn more about this report

ROTARY ENCODER MARKET OVERVIEW 

The global rotary encoder market size is estimated at USD 2.99 billion in 2025 and is expected to reach USD 6.45 billion by 2034 at a CAGR of 8.87% during the forecast period from 2025 to 2034.

A shaft encoder is another name for a rotary encoder. It is described as an electromechanical switch that transforms the angular motion and axle position into a digital signal or advanced encoding output. A rotary encoder produces an electrical signal, either analogue or digital, based on the rotating movement.

Due to emerging technologies like robots and smart manufacturing, demand for rotary encoders in industrial end-use applications like manufacturing is rising quickly. The path of the permanent magnet motor shaft is frequently monitored by a rotary encoder in the context of CNC machines (industrial software and robotics).

KEY FINDINGS

COVID-19 IMPACT

Covid-19 Health Catastrophe Inhibit Market Growth

The severe health catastrophe brought on by the coronavirus (COVID-19) is still spreading and affecting people all over the world. The COVID-19's possible effects, which could include delays in the ongoing and planned construction schedule, significant supply chain disruptions, labour problems, a delay in obtaining necessary permissions, and the availability of funding.

The pandemic has a significant negative impact on several industries, including the transportation, aviation, and tourism sectors. For instance, according to the World Travel and Tourism Council, the crisis will cost the travel and tourism industry at least USD 22 billion and up to 25% of its 2020 revenue, which will result in the loss of 50 million jobs.

LATEST TRENDS

High Accuracy And Technological Advancements May Leads To Enhance Market Growth

If 3D printers significantly improve their accuracy, the technology might advance and eventually result in a better scale. This result in lower particle sizes and dimensions with shorter processing times, which can increase the use of magnetic encoders in applications involving large volumes of data.

The use of the 36mm and 58mm encoders is predicted to increase with interface standardization. Due to this, their functionality will be varied from very low and somewhat less in comparison to those of the competitors' products.

• Growing Adoption in Industrial Automation: According to the International Federation of Robotics (IFR), global installations of industrial robots reached 553,052 units in 2022, boosting the demand for high-precision rotary encoders in automation applications.

• Surge in Integration with IoT Systems: As per the European Telecommunications Network Operators’ Association (ETNO), 45% of manufacturing firms in Europe integrated IoT-enabled motion systems, increasing reliance on rotary encoders for real-time monitoring and feedback.

Request a Free sample to learn more about this report

ROTARY ENCODER MARKET SEGMENTATION

By Type

According to type, the market can be segmented into Incremental Encoders, Absolute Encoders. Incremental Encoders will be the leading segment.

By Application

Based on application, the market can be divided into Metal Forming & Fabrication, Servo motor, Elevator Industry, Machine Tool, and Material Handling. Metal Forming & Fabrication will be the dominating segment.

DRIVING FACTORS

Strong Robotics Industry Supporting Encoder Industry Growth

Encoders are widely utilized in a variety of sectors to speed up production and guarantee accuracy. They are employed for filling, conveying, motor feedback, x-y positioning, and registration mark timing, among other things, in the thriving food and beverage industry, which is assisting market expansion. Encoders are also used to implement the Internet of things (IoT), which allows devices to receive position and information, hence accelerating market expansion. Moreover, the industry for encoders is being boosted by the growing usage of computer numerical control (CNC) machines. The market is expanding due in part to the robust growth of the robotics sector and the extensive usage of encoders within it.

Growing computing and technology research and development (R&D) has made upkeep and installation possible.

Expanding Automotive Sector Leading Market Growth

A position sensor known as a rotary encoder is utilized to deliver electrical outputs that are related to shaft rotation, precisely measuring angles and pedal position. These sensors are utilised in the automobile industries for a variety of controls, including those for the rotary switch, mode selection, volume control, wiper motor, headlight position control, seat position motor, side mirror, and throttle position control. The International Energy Agency estimates that 3.29 million electric vehicles were in use worldwide in 2018 and that number will rise to 125 million by 2030. As a result, the expansion of the automotive sector will fuel the growth of the rotary encoder market.

• Expansion of CNC Machine Tools Market: According to the U.S. Bureau of Economic Analysis (BEA), machine tool production volume increased by 8.4% year-over-year in 2023, directly pushing demand for rotary encoders used in motion control systems.

• Rising Electric Vehicle Production: As per the International Energy Agency (IEA), global EV sales surpassed 14 million units in 2023, significantly increasing the use of rotary encoders in motor control and battery management systems.

RESTRAINING FACTORS

Product Distinction Is Lacking, Hampering The Market Expansion

The lack of product differentiation is one of the factors restricting growth in the market for rotary encoders. Since rotary encoders are used in such large quantities in the electronics, aerospace, automotive, and other industries, consumers purchase these goods in bulk. Rotary encoders have a wide range of applications and potential uses. Since many major businesses provide comparable technological products, customers have a wide range of possibilities. In order to compete with big manufacturers for the vast volume of these products, pricing pressure is put on manufacturers. The pressure on manufacturers' prices as a result presents a problem.

• High Cost of Advanced Rotary Encoders: According to the U.S. National Institute of Standards and Technology (NIST), precision encoders with multi-turn capabilities can cost over USD 400 per unit, making them less viable for cost-sensitive SMEs.

• Operational Sensitivity to Harsh Environments: As noted by the Japan Electrical Manufacturers' Association (JEMA), failure rates of rotary encoders in high-vibration or dusty industrial environments rise by up to 25%, leading to increased maintenance and replacement needs.

• Request a Free sample to learn more about this report

•  

ROTARY ENCODER MARKET REGIONAL INSIGHTS 

Asia Pacific To Grow At The Highest CAGR During Forecast Period

The desire for better manufacturing process solutions and increased industrialization are helping the industry expand quickly. Large industrial centers like those in Japan, China, and India are centered in Asia. Increased production capacity and service contracts with enterprises are other factors driving industry expansion. The entry of new products into the market as a result of increased market competition has accelerated market growth.

Programs of the Chinese government, such the Made in China 2025 plan, encourage the use of R&D in factory automation and technologies, as well as the investments made therein. Additionally, the "Made in China" project intends to increase the nation's domestic manufacturing of automation hardware and equipment because the majority of automation equipment is imported from Germany and Japan. The market under study will be driven by initiatives taken by the government in the automation industry.

KEY INDUSTRY PLAYERS

Key Players Focus on Partnerships to Gain a Competitive Advantage

Prominent market players are making collaborative efforts by partnering with other companies to stay ahead of the competition. Many companies are also investing in new product launches to expand their product portfolio. Mergers and acquisitions are also among the key strategies used by players to expand their product portfolios.

• Turck Holding GmbH: As per Turck’s corporate release, the company expanded its encoder portfolio by launching over 50 new variants in 2023 alone, including compact models optimized for Industry 4.0 applications.

• FAULHABER Group (Germany): According to the German Electrical and Electronic Manufacturers' Association (ZVEI), FAULHABER's micro-motion solutions contributed to a 17% increase in encoder unit shipments for robotics and medical equipment in 2023.

List of Top Rotary Encoder Companies

• Turck Holding GmbH (Germany)
• FAULHABER Group (Germany)
• BEI Sensors (France)
• Renishaw plc. (U.K.)
• Baumer Group (Switzerland)
• OMRON Corporation (Japan)
• Dynapar (U.S.)
• maxon motor ag (Switzerland)
• Hengstler GmbH (Germany)
• SIKO GmbH (Germany)
• Ifm electronic (Germany)
• Pilz GmbH & Co. KG (Germany)
• Rockwell Automation, Inc. (U.S.)
• Dr. Johannes Heidenhain GmbH

REPORT COVERAGE

This research profiles a report with extensive studies that take into description the firms that exist in the market affecting the forecasting period. With detailed studies done, it also offers a comprehensive analysis by inspecting the factors like segmentation, opportunities, industrial developments, trends, growth, size, share, and restraints. This analysis is subject to alteration if the key players and probable analysis of market dynamics change.