2022 Trends to Watch: Manufacturing technology
Manufacturing Technology Analyst askananalyst@omdia.com
© 2021 Omdia
Brought to you by Informa Tech
2022 Trends To Watch| December 2021
Key messages
-
-
1
2
3
4
5
Sustainability: net-zero
Supply chain bottlenecks
Input cost fluctuation
Shift from CapEx to OpEx :
Enterprise and software
The roadmap for the top 50 manufacturing companies.
- Critical component shortages and prolonged lead-times.
The sustainability challenge.
- Shipping delays and bottlenecks in major shipping ports.
- Energy supply volatility in China impacting global markets.
- Critical component shortages. - COVID-19 impacting order fulfillment and growing backlogs.
- Entrance of major software and cloud providers into the industrial space. - Key applications include IIoT, factory and warehouse automation. - The future of manufacturing through connectivity
Information Classification: General
2022 Trends To Watch| December 2021
Electric motors in manufacturing consume around one third of the world’s electricity, a total of 8.6 Trillion KWH, the equivalent of the annual electricity consumed by China and India. MEPS (Minimum Energy Performance Standards) for low voltage motors have played an important role in helping countries to meet energy efficiency and carbon dioxide emission targets.
Sustainability and carbon neutrality influencing manufacturing investment
Global LV installed base by efficiency level 2018 vs 2025
Attachment rate of motors and drives
~19%
2018
in 2014
2025 0%
Sustainability and carbon neutrality goals influencing global manufacturing investment from three aspects:
20%
40%
60%
IE1 - standard efficiency
IE2 - high efficiency
IE3 - premium efficiency
IE4 - super premium
Efficiency standards in automation products
Digital transformation in manufacturing facilities
Biomass, 9.9% Hydro, 2.7%
By 2025, the number of IE3 and IE4 installed motors is projected to double; attachment rate of drives increases to 26% .
The world primary energy demand by fuel type, 2035
Other renewables, 2.5%
Other renewables, 7.2% Biomass, 10.2%
Oil, 30.0%
Nuclear, 5.2%
Hydro, 2.9%
Oil, 29.7%
Nuclear, 5.7%
Natural gas, 23.3% Source: Omdia
Information Classification: General
100%
in 2020
Primary energy demand shifting slowly from traditional to renewable sources, attracting investment to accelerate infrastructure development. The world primary energy demand by fuel type, 2020
Energy mix: Area of investment in industrial sectors
80%
~23%
Coal, 26.5%
© 2021 Omdia
Natural gas, 23.9% Source: Omdia
Coal, 20.4% © 2021 Omdia
The sustainability challenge In 2020 35 billion tonnes of Carbon Dioxide were emitted One third was from manufacturing and construction.
Industrial energy consumption estimated to reach 240.2 quadrillion BTUs in 2020 Only 8.5% of industrial energy consumption was from renewable sources
16 billion gallons of water are consumed by US factories every day. US factories emit 1.2 trillion gallons of untreated sewage and industrial waste every year
3.2 billion tonnes of metal and 4.1 billion tonnes of cement were produced in 2019.
Industrial pollution accounts for 50% of all pollution in the US
Sustainability and carbon neutrality influencing manufacturing investment
Information Classification: General
2022 Trends To Watch| December 2021
2022 Trends To Watch| December 2021
Rising input costs
Global supply chain disruption Supply chain disruption worsening caused by components shortage and lead-time delays, restricting market growth.
Supply chain bottleneck reshapes industrial business models
Gas and coal prices soar as the energy supply crunch continues globally. This will further increase manufacturing costs and could lead to temporary closure of energy intensive factories.
Asia & Oceania - 6.5% EMEA - 5.3% Americas - 6.1%
Information Classification: General
Strong order intake reported by major automation equipment suppliers in post-pandemic recovery.
Global industrial automation equipment markets forecast lowest % revenue growth
16% 14%
CAGR 20 - 24 (%)
Revenue CAGR 20-24 by region
Global industrial automation equipment markets forecast highest % revenue growth CAGR 20 -24 (%)
6.6% growth from 2021
Orders surge as Covid-19 recovery begins
Energy crunch
Industrial automation equipment market Projected to reach $22.5 billion in 2022
Increase in freight costs, commodity prices, and component costs are heavily impacting industrial markets.
12% 10% 8% 6% 4%
2% 0% Robotics
Materials Handling Semiconductor Equipment (MHE) Machinery
4.3% 4.2% 4.1% 4.0% 3.9% 3.8% 3.7% 3.6% 3.5% 3.4% Oil & Gas
Pulp & Paper Machinery
Printing Machinery
Sample Report Name Here | Month 2021
Supply chain bottleneck reshapes industrial business models Forecast scenario automotive order inflation
Secondhand equipment market
2
Supply chain disruptions have resulted in a boom in the secondhand equipment. Growth in 2nd hand equipment will inevitably dilute future growth of new machinery.
Orders (2019 = 1)
1.5
Historical data 1
Minimum customization
0.5 Impact of COVID-19 0
2019
2020
Historical Semicon Manufacturer 1
2021
2022
Automotive Manufacturer Semicon Manufacturer 2
2023
2024
2025
Electronics Manufacturer
Source: Omdia
In order to remain competitive in the market, equipment and automation vendors are targeting product markets with basic functionality with minimal customization to reduce the impact of extended lead-times.
Freight and shipping
© 2021 Omdia
Freight cost increased
Input cost spike
in 2021
in 2021
~70-95%
Information Classification: General
~15-20 %
Average lead-times
~12 to 15 weeks in 2021
Increased delays and shipping costs have significantly impacted the industrial landscape throughout the pandemic. With the continuation of geopolitical tension with China and the US/Europe fright and shipping is expected to return to normalcy sometime in 2023.
Sample Report Name Here | Month 2021
Fluctuation in manufacturing input cost
Manufacturing costs increasing
$90 $80 $70 $60 $50 $40 $30 $20 $10 $-
Crude oil, WTI
2023Q4
2023Q3
2023Q2
2023Q1
2022Q4
2022Q3
2022Q2
2022Q1
2021Q4
2021Q3
2021Q2
2021Q1
2020Q4
2020Q3
2020Q2
Rising manufacturing input costs coupled with soaring logistic costs are pressuring higher product prices for global manufactures. This is especially prevalent in US industrial markets. 2020Q1
$/bbl
Crude oil price
Crude oil, Brent
Source: IHS Markit, November 2021
© 2021 Omdia
Commodity price $2,500
Cost reduction Manufacturers have suspended low- margin product in favor of higher profitability. Shortages have also impacted product functionality as seen in the automotive sector where some models have been released with less features.
$2,000 $1,500
Supply chain diversification
$1,000 $500
Hot-rolled coil,US, $/short ton Source: IHS Markit, November 2021
Information Classification: General
2023Q4
2023Q3
2023Q2
2023Q1
2022Q4
2022Q3
2022Q2
2022Q1
2021Q4
2021Q3
2021Q2
2021Q1
2020Q4
2020Q3
2020Q2
2020Q1
2019Q4
2019Q3
2019Q2
2019Q1
$-
Cold-rolled coil,US, $/short ton © 2021 Omdia
Manufactures are seeking supply chain alternatives to save procurement costs. In preparation for future markets manufactures will look to significantly de-risk supply chain dependency on Asia. This will be achieved through closer to consumption production.
Sample Report Name Here | Month 2021
Enterprise and software companies - New entrants into the industrial ecosystem Cloud providers: Major machine vision providers are rapidly deploying deep-learning enabled solutions. The entrance of Amazon, Microsoft and Google into the industrial vision space has accelerated the adoption of deep learning (DL) functionality for leading machine vision providers. This trend will impact the growth of smart cameras and smart sensors deployment outside low volume-controlled environments. This will also be seen with the growing utility of system on chips (SOC). The impact of smart devices and DL solutions has been seen most ubiquitously in the logistics and packaging industry. Barcode track and trace solutions are being deployed to combat a boom in E-commerce demand constrained by manufacturing job shortages and COVID-19 restrictions.
Artificial intelligence and machine vision
Machine vision software provider landscape- 2021 35%
32%
30%
27%
25% 21% 20% 15%
12% 8%
10%
Artificial Intelligence (AI)
Machine learning (ML)
Deep learning (DL) Convolutional neural network (CNN)
5% 0% Traditional rule based software
System software
Library software
Open source tools
Deep learning / AI functionality
Information Classification: General
Top-3 products, based on amount of newly connected nodes: - Remote I/O - PLC - Sensors
Digitalization of the industry is driving the growth in the connected nodes.
Connected nodes, millions
Global market for newly connected nodes 300
20.0%
250
15.0%
200
10.0%
150
5.0%
100
0.0%
50
-5.0%
0
-10.0%
Top-3 product, based on CAGR of the amount of newly connected nodes: Motion controller Servo drive
2020 2021 2022 2023 2024 2025 Connected nodes
Industrial communication market Estimated to grow 10.3% in 2021, after a hit in 2020 due to the pandemic CAGR of the new connected nodes 2020-2025 : 13,1%
Discrete safety
YoY Growth
0%
Market growth driver – digitalization of the industry/smart manufacturing: ▪ ▪ ▪ ▪ ▪ ▪
Flexible and Modular production Remote manufacturing Sustainable production Cybersecurity Improved quality Reduced costs
▪ ▪ ▪
5% 10% 15% 20% 25%
Enabler and communication tools are: Converged network and device interoperability Open architecture of the network IT technologies growing into OT: ▪ Digital Twin ▪ Edge computing ▪ Cloud integration ▪ Artificial Intelligence ▪ Industrial Ethernet in the field
Key success factor is data availability, accessibility and data management capacity and tools Information Classification: General
Machine vision applications
Sample Report Name Here | Month 2021
Vision applications: The product does not drive the application market From the onset of the pandemic machine vision providers have raced to deploy AI and deep learning in the hope of exploiting new applications. This has also been illustrated by boom in M&A activity with the likes of sensor, chip and cloud providers. Ultimately the landscape of vision applications cannot be changed by short-term product launches and is still comprised of traditional vision use-cases.
Further progress and implementation of 3D vision and recent trends such as SOC’s and event-based imaging will impact the overall landscape in a 5–10-year timeframe.
Information Classification: General
@OmdiaHQ
omdia.com
Disclaimer The Omdia research, data and information referenced herein (the “Omdia Materials”) are the copyrighted property of Informa Tech and its subsidiaries or affiliates (together “Informa Tech”) or its third party data providers and represent data, research, opinions, or viewpoints published by Informa Tech, and are not representations of fact. The Omdia Materials reflect information and opinions from the original publication date and not from the date of this document. The information and opinions expressed in the Omdia Materials are subject to change without notice and Informa Tech does not have any duty or responsibility to update the Omdia Materials or this publication as a result. Omdia Materials are delivered on an “as-is” and “as-available” basis. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information, opinions, and conclusions contained in Omdia Materials. To the maximum extent permitted by law, Informa Tech and its affiliates, officers, directors, employees, agents, and third party data providers disclaim any liability (including, without limitation, any liability arising from fault or negligence) as to the accuracy or completeness or use of the Omdia Materials. Informa Tech will not, under any circumstance whatsoever, be liable for any trading, investment, commercial, or other decisions based on or made in reliance of the Omdia Materials.
Get in touch Americas E: customersuccess@omdia.com 08:00 – 18:00 GMT -5 Europe, Middle East & Africa E: customersuccess@omdia.com 8:00 – 18:00 GMT Asia Pacific E: customersuccess@omdia.com 08:00 – 18:00 GMT + 8
© 2021 Omdia
Brought to you by Informa Tech