Global Optical Encoder ic
Market Report
2025
Optical Encoder ic Market size is USD 225.2 million in 2024 and will expand at a compound annual growth rate (CAGR) of 6.20% from 2024 to 2031.
The base year for the calculation is 2024. The historical will be 2021 to 2024. The year 2025 will be estimated one while the forecasted data will be from year 2025 to 2033. When we deliver the report that time we updated report data till the purchase date.
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According to Cognitive Market Research, the global Optical Encoder IC Market size is USD 225.2 million in 2024 and will expand at a compound annual growth rate (CAGR) of 6.20% from 2024 to 2031.
2021 | 2025 | 2033 | CAGR | |
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Global Optical Encoder ic Market Sales Revenue | 121212 | 121212 | 121212 | 6.2% |
North America Optical Encoder ic Market Sales Revenue | 121212 | 121212 | 121212 | 4.4% |
Europe Optical Encoder ic Market Sales Revenue | 121212 | 121212 | 121212 | 4.7% |
Asia Pacific Optical Encoder ic Market Sales Revenue | 121212 | 121212 | 121212 | 8.2% |
South America Optical Encoder ic Market Sales Revenue | 121212 | 121212 | 121212 | 5.6% |
Middle East Optical Encoder ic Market Sales Revenue | 121212 | 121212 | 121212 | 5.9% |
Base Year | 2024 |
Historical Data Time Period | 2021-2024 |
Forecast Period | 2025-2033 |
Market Split by Configuration |
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Market Split by Application |
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Market Split by Output Signal Format |
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Market Split by End User |
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List of Competitors |
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Regional Analysis |
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Country Analysis |
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Optical Encoder ic Market is Segmented as below. Particular segment of your interest can be provided without any additional cost. Download the Sample Pages!
The optical encoder IC market encompasses a segment of electronic devices called optical encoder integrated circuits (ICs) that are used to translate mechanical displacement into digital signals. They are sometimes referred to as optical sensor ICs or optical rotary encoder ICs. They function by combining the efforts of a light emitter, generally an LED, and a light detector, usually a photodiode, to determine an object's position, speed, or rotational direction. Over the next few years, there will likely be a significant increase in the market for optical encoder integrated circuits. A major factor propelling this market is the growing need for high-precision motion control systems in robotics, automotive, and industrial automation applications. For application in these industries, optical encoder integrated circuits (ICs) are a great choice because of their benefits like accuracy, dependability, and small size.
Another significant driver shaping the optical encoder IC market is the increasing use of optical encoder integrated circuits in consumer electronics, medical equipment, and aerospace applications. These integrated circuits (ICs) improve the overall performance and usefulness of these gadgets by enabling precise control of numerous operations and systems. .
In July 2022, Private equity firm Pfingsten Partners purchased Dynapower Company LLC (South Burlington, Vermont), a prominent supplier of energy storage and power conversion systems, from Sensata Technologies (US). The goal is to supply highly engineered, mission-critical power conversion solutions to the industrial, defense, and rapidly expanding renewable energy storage and electric car charging sectors.
(Source: https://www.sensata.com/contact/newsroom/sensata-technologies-completes-acquisition-dynapower)
One key driver in the optical encoder IC market is the continuous advancements in self-driving cars and advanced driver assistance systems (ADAS). Integrated circuits called optical encoders translate motion into electrical signals. In essence, they function as small rulers that measure linear motion or rotation. These integrated circuits (ICs) are utilized in a variety of sensors in autonomous cars and ADAS that monitor motion, position, and speed. Wheel speed sensors for traction control and anti-lock braking systems (ABS). Steering angle sensors for automatic steering and lane departure warning. Lidar sensors produce three-dimensional maps of the environment. Inertial measurement units, or IMUs, handle vehicle orientation and stability control. They offer precise and trustworthy positional data, which is essential for the safe operation of autonomous driving and ADAS features. Their modest size makes it simple to incorporate them into small sensor designs. They are resilient to the severe weather that automobiles encounter.
Another key driver in the optical encoder IC market is the increasing demand for the Use of collaborative and industrial robots. A key driver propelling the growth of the optical encoder integrated circuit market is the increasing use of collaborative and industrial robots. The accurate placement and maneuverability of these robots are dependent on optical encoders. There is a vast array of applications for industrial robots, including material handling, welding, painting, and assembling. For accurate and dependable functioning, they need high-performance optical encoders. In shared workspaces, cobots are meant to operate safely next to people. Tasks including material handling, assembly, and inspection are among the ones where their utilization is growing. Cobots, as opposed to conventional industrial robots, usually require smaller and more affordable optical encoders.
One key restraint in the optical encoder IC market is the challenge of achieving security concerns. Security flaws in optical encoder integrated circuits (ICs) can impair the functionality of the systems in which they are integrated. Errors in data transmitted by the optical encoder integrated circuit (IC) can arise due to electromagnetic interference (EMI). The optical encoder IC may sustain damage from electrostatic discharge (ESD). Attacks using fault injection By using these assaults, mistakes can be introduced into the data that the optical encoder IC transmits.
The optical encoder IC market experienced both challenges and opportunities due to the impact of COVID-19. On the one hand, In order to reduce human interaction and maintain social distance, automation has become more important across a range of businesses as a result of the epidemic. The market for optical encoder integrated circuits (ICs) used in automated equipment may be driven by this. Ocular encoder integrated circuits (ICs) utilized in these applications may find new markets as a result of the pandemic's expansion in industries, including robotics, cloud computing, and medical devices. However, on the other hand, Optical encoder integrated circuit supply chain disruption was brought on by lockdowns and travel restrictions due to the COVID-19 outbreak. Production was delayed and parts were in low supply as a result. Consumer electronics, automobile parts, and industrial automation equipment were among the electronic devices that saw a decrease in demand due to the COVID-19-induced worldwide economic slowdown. These devices also featured optical encoder integrated circuits (ICs).
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In 2025, global trade has entered a period of renewed volatility as the U.S., under President Donald Trump, introduced sweeping tariffs known as the Liberation Day Tariffs. Aimed at addressing trade imbalances and foreign supply chain dominance, the tariffs range from 10% on allies like Australia and the UK to 46% on Vietnamese goods and 34% on Chinese imports. A 25% universal tariff on steel, aluminum, and auto parts has further strained global trade ties. The electronics sector is among the hardest hit, particularly due to the escalating U.S.China trade war. Tariffs on Chinese goods now reach up to 145% in sectors like semiconductors and consumer electronics, while China has retaliated with up to 125% duties and restrictions on critical mineral exports. This has disrupted just-in-time supply chains and increased component costs.
Specific tariffs include 25% on semiconductors, 20% on lithium-ion batteries, and 10–15% on consumer electronics like laptops and tablets, leading to higher retail prices and reduced consumer demand. Sub-sectors such as home automation, computer hardware, communication electronics, medical devices, and industrial electronics are all under pressure due to rising input costs and supply chain delays. Companies are revisiting suppliers, shifting sourcing to countries like India, Mexico, and Vietnam, and redesigning products to avoid high-tariff components.
China remains a key player, contributing USD 119 billion in electronics exports to the U.S. in 2023. Even components routed through countries like Malaysia and Vietnam often rely on Chinese subparts, making the ripple effect of tariffs widespread. U.S. electronics firms operating on thin margins are seeing input costs rise 18–25%, with contract manufacturers in alternative regions facing capacity constraints.
Market research is now critical. It helps companies identify new suppliers, analyze cost trends, optimize product design, forecast demand shifts, and track regulatory changes. Tools like supplier mapping, BOM optimization, and scenario planning support strategic responses to ongoing disruptions. Leading firms like Apple and Dell are expanding production outside China, while others invest in digital supply chain tools and redesign products for cost resilience. In this evolving trade environment, firms that leverage research-driven strategies are better positioned to adapt and thrive.
The competitive landscape of the optical encoder IC market is characterized by a diverse range of players competing to gain market share through product innovation, strategic partnerships, and aggressive marketing efforts. Key players in the market include established manufacturers, specialized companies, and emerging start-ups aiming to disrupt the market with innovative solutions.
In June 2023, the new E6B2-CWZ6C incremental encoder from Omron Corporation was released. It is intended to be used in severe conditions. Temperature tolerance for the IP68-rated E6B2-CWZ6C incremental encoder is -40°C to 85°C.
(Source: https://www.ia.omron.com/product/item/2450/)
Top Companies Market Share in Optical Encoder ic Industry: (In no particular order of Rank)
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According to Cognitive Market Research, North America dominated the market in 2024 and accounted for around 40% of the global revenue. Leading the way in industrial automation, which mostly depends on accurate motion control, is something that the US has long been known for. In order to achieve this precision for operations like robots and assembly lines, optical encoders are essential. Manufacturers in North America are renowned for their emphasis on efficiency and good quality. Surface Mount Technology (SMT) is an essential procedure for mounting electronic components on circuit boards, and optical encoders are part of it. Encoders that provide precise positioning lower mistake rates and contribute to quality assurance.
Asia-Pacific stands out as the fastest-growing region in the optical encoder IC market due to several compelling reasons. The region's manufacturing, robotics, and transportation sectors are expanding rapidly, and all of them significantly depend on accurate motion control. In these kinds of applications, optical encoders are indispensable. The production of consumer electronics is heavily concentrated in Asia Pacific. More and more of these devices have capabilities like gesture recognition and cellphones with high-resolution cameras that need optical encoders. A number of emerging nations in the area are putting policies into place to support technological breakthroughs and manufacturing. As a result, the market for optical encoder integrated circuits is well-positioned to grow. One further important factor is the car industry. The need for encoders in automobiles is growing, with China emerging as the global leader in this regard.
The current report Scope analyzes Optical Encoder ic Market on 5 major region Split (In case you wish to acquire a specific region edition (more granular data) or any country Edition data then please write us on info@cognitivemarketresearch.com
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According to Cognitive Market Research, the global Optical Encoder IC Market size was estimated at USD 225.2 Million, out of which North America held the major market of more than 40% of the global revenue with a market size of USD 90.08 million in 2024 and will grow at a compound annual growth rate (CAGR) of 4.4% from 2024 to 2031.
According to Cognitive Market Research, the global Optical Encoder IC Market size was estimated at USD 225.2 Million, out of which Europe held the market of more than 30% of the global revenue with a market size of USD 67.56 million in 2024 and will grow at a compound annual growth rate (CAGR) of 4.7% from 2024 to 2031.
According to Cognitive Market Research, the global Optical Encoder IC Market size was estimated at USD 225.2 Million, out of which Asia Pacific held the market of around 23% of the global revenue with a market size of USD 51.80 million in 2024 and will grow at a compound annual growth rate (CAGR) of 8.2% from 2024 to 2031.
According to Cognitive Market Research, the global Optical Encoder IC Market size was estimated at USD 225.2 Million, out of which Latin America market of more than 5% of the global revenue with a market size of USD 11.26 million in 2024 and will grow at a compound annual growth rate (CAGR) of 5.6% from 2024 to 2031.
According to Cognitive Market Research, the global Optical Encoder IC Market size was estimated at USD 225.2 Million, out of which the Middle East and Africa held the major market of around 2% of the global revenue with a market size of USD 4.50 million in 2024 and will grow at a compound annual growth rate (CAGR) of 5.9% from 2024 to 2031.
Global Optical Encoder ic Market Report 2025 Edition talks about crucial market insights with the help of segments and sub-segments analysis. In this section, we reveal an in-depth analysis of the key factors influencing Optical Encoder ic Industry growth. Optical Encoder ic market has been segmented with the help of its Configuration, Application Output Signal Format, and others. Optical Encoder ic market analysis helps to understand key industry segments, and their global, regional, and country-level insights. Furthermore, this analysis also provides information pertaining to segments that are going to be most lucrative in the near future and their expected growth rate and future market opportunities. The report also provides detailed insights into factors responsible for the positive or negative growth of each industry segment.
According to Cognitive Market Research, Incremental Configuration stands out as the dominating category. Compared to absolute encoders, incremental encoders have a more straightforward and affordable construction, which makes them suitable for a range of applications. They are less expensive since their design is simpler than that of absolute encoders. They are a desirable alternative for many applications that need basic motion control functionality without going over budget because of their cheaper cost. Because of their cost and durability, incremental encoders are used in a variety of applications, including wind turbines, motor feedback systems, heavy-duty machinery, and factory automation.
Hollow-shaft configuration emerges as the fastest-growing category in the optical encoder IC market. The benefits provided by hollow-shaft encoders and the growing need for dependable, high-precision motion control systems across a range of industrial applications are the main drivers of this expansion. The benefits provided by hollow-shaft encoders and the growing need for dependable, high-precision motion control systems across a range of industrial applications are the main drivers of this expansion. Hollow-shaft encoders are more space-efficient and compact since they don't require extra couplings or mounting gear. The through-bore design minimizes setup time and any alignment problems by facilitating simpler installation and alignment with the shaft.
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According to cognitive market research, the dominating category is Test & Measurement Equipment. Optical encoders must undergo extensive testing during the manufacturing process to guarantee they fulfill performance requirements because they are essential parts for motion control and precision applications. Instrumentation for testing and measuring is essential to this quality assurance procedure. Engineers utilize test and measurement tools when designing and developing new optical encoders to assess prototypes, gauge encoder performance parameters like resolution, accuracy, and speed, and make sure the devices work as intended.
The fastest-growing category in the Optical Encoder IC Market is Robotics Equipment. Robots mostly depend on their arms, legs, or manipulators to move and position precisely. When it comes to giving precise feedback on rotational or linear motion, optical encoders are excellent. Robots need this info in order to function properly. The increasing automation of numerous industries, such as manufacturing, logistics, and healthcare, is driving the need for robots. Optical encoders are becoming more and more necessary to regulate the movements of deployed robots.
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According to Cognitive Market Research, the dominating category is digital as a result of the growing need across numerous industries for durable, high-precision, low-noise digital encoding systems. Applications requiring precise motion control and positioning can benefit from the higher resolutions and more accurate position monitoring that digital optical encoders can offer. Compared to analog signals, digital signals are less prone to noise and interference, which leads to more dependable and stable performance in industrial settings. System integration is made easier by the ease with which programmable logic controllers (PLCs), contemporary digital control systems, and other digital devices can interact with the digital outputs of optical encoder ICs.
The fastest-growing category in the optical encoder IC market is analog. In general, analog encoders have a simpler design than digital ones. Lower costs and maybe wider applicability in a variety of applications result from this. Because analog encoder integrated circuits are a well-established technology, they are dependable and easily accessible. It's critical to take into account both the expansion of the analog segment and general market trends. The whole optical encoder integrated circuits market is being driven by factors such as growing automation and the need for high-precision motion control systems.
According to Cognitive Market Research, the dominating category is the Manufacturing Industry. For a variety of applications, including computer numerical control (CNC) machines, industrial robots, assembly lines, and automated material handling systems, the manufacturing sector significantly depends on accurate motion control and positioning systems. Digital optical encoder integrated circuits (ICs) are the recommended option for these demanding applications because they provide higher resolution and accuracy than analog encoders. Harsh temperatures, vibrations, and electrical noise can all be common in manufacturing operations. Compared to analog encoders, digital optical encoder integrated circuits (ICs) are less prone to noise and interference, guaranteeing dependable and steady performance in these industrial environments. For constant production quality to be maintained and downtime to be minimized, this enhanced reliability is essential.
The fastest-growing category in the Optical Encoder IC Market in Public Sector. A large number of governments and public sector organizations are funding the construction and upkeep of transport infrastructure, including roads, bridges, tunnels, and train networks. For these kinds of operations, accurate motion control and positioning systems are needed for specialized machinery such as tunnel boring machines and construction equipment. These applications heavily rely on optical encoder integrated circuits (ICs), which in turn fuels the need for dependable and highly precise encoders. Wind farms and solar power plants are just two examples of renewable energy projects in which numerous governments and public sector organizations are investing. Optical encoder integrated circuits (ICs) are essential components for assuring optimal energy generation and efficiency in wind turbine and solar panel array positioning and tracking systems, which are the foundation of these projects.
Senior Research Analyst at Cognitive Market Research
ResearchGate Profile: https://www.researchgate.net/profile/Kalyani-Raje
An optimistic Senior Research Analyst with years of experience in competitive assessment and business consulting. A seasoned professional and subject-matter expert (SME) in the Automobile and transportation vertical.
With a work experience of over 10+ years in the market research and strategy development. I have worked with diverse industries, including FMCG, IT, Telecom, Automotive, Electronics and many others. I also work closely with other departments such as sales, product development, and marketing to understand customer needs and preferences, and develop strategies to meet those needs.
I am committed to staying ahead in the rapidly evolving field of research and analysis. This involves regularly attending conferences, participating in webinars, and pursuing additional certifications to enhance my skill set. I played a crucial role in conducting market research and competitive analysis. I have a proven track record of distilling complex datasets into clear, concise reports that have guided key business initiatives. Collaborating closely with multidisciplinary teams, I contributed to the development of innovative solutions grounded in thorough research and analysis.
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Configuration | Shafted, Hollow-Shaft, Absolute, Multi-turn, Incremental |
Application | Healthcare Equipment, Consumer Electronics and Semiconductor Manufacturing Equipment, Robotics Equipment, Test & Measurement Equipment, Others |
Output Signal Format | Analog, Digital |
End User | Public Sector, Manufacturing Industry, IT and Telecommunication Industry, Others |
List of Competitors | Broadcom (US), New Japan Radio (Japan), SEIKO NPC (Japan), IC-Haus (Germany), PREMA Semiconductor (Germany), Hamamatsu (Japan) |
This chapter will help you gain GLOBAL Market Analysis of Optical Encoder ic. Further deep in this chapter, you will be able to review Global Optical Encoder ic Market Split by various segments and Geographical Split.
Chapter 1 Global Market Analysis
Global Market has been segmented on the basis 5 major regions such as North America, Europe, Asia-Pacific, Middle East & Africa, and Latin America.
You can purchase only the Executive Summary of Global Market (2019 vs 2024 vs 2031)
Global Market Dynamics, Trends, Drivers, Restraints, Opportunities, Only Pointers will be deliverable
This chapter will help you gain North America Market Analysis of Optical Encoder ic. Further deep in this chapter, you will be able to review North America Optical Encoder ic Market Split by various segments and Country Split.
Chapter 2 North America Market Analysis
This chapter will help you gain Europe Market Analysis of Optical Encoder ic. Further deep in this chapter, you will be able to review Europe Optical Encoder ic Market Split by various segments and Country Split.
Chapter 3 Europe Market Analysis
This chapter will help you gain Asia Pacific Market Analysis of Optical Encoder ic. Further deep in this chapter, you will be able to review Asia Pacific Optical Encoder ic Market Split by various segments and Country Split.
Chapter 4 Asia Pacific Market Analysis
This chapter will help you gain South America Market Analysis of Optical Encoder ic. Further deep in this chapter, you will be able to review South America Optical Encoder ic Market Split by various segments and Country Split.
Chapter 5 South America Market Analysis
This chapter will help you gain Middle East Market Analysis of Optical Encoder ic. Further deep in this chapter, you will be able to review Middle East Optical Encoder ic Market Split by various segments and Country Split.
Chapter 6 Middle East Market Analysis
This chapter will help you gain Middle East Market Analysis of Optical Encoder ic. Further deep in this chapter, you will be able to review Middle East Optical Encoder ic Market Split by various segments and Country Split.
Chapter 7 Africa Market Analysis
This chapter provides an in-depth analysis of the market share among key competitors of Optical Encoder ic. The analysis highlights each competitor's position in the market, growth trends, and financial performance, offering insights into competitive dynamics, and emerging players.
Chapter 8 Competitor Analysis (Subject to Data Availability (Private Players))
(Subject to Data Availability (Private Players))
Data Subject to Availability as we consider Top competitors and their market share will be delivered.
Data Subject to Availability as we consider Top competitors and their market share will be delivered.
Data Subject to Availability as we consider Top competitors and their market share will be delivered.
Data Subject to Availability as we consider Top competitors and their market share will be delivered.
Data Subject to Availability as we consider Top competitors and their market share will be delivered.
Data Subject to Availability as we consider Top competitors and their market share will be delivered.
This chapter would comprehensively cover market drivers, trends, restraints, opportunities, and various in-depth analyses like industrial chain, PESTEL, Porter’s Five Forces, and ESG, among others. It would also include product life cycle, technological advancements, and patent insights.
Chapter 9 Qualitative Analysis (Subject to Data Availability)
Segmentation Configuration Analysis 2019 -2031, will provide market size split by Configuration. This Information is provided at Global Level, Regional Level and Top Countries Level The report with the segmentation perspective mentioned under this chapters will be delivered to you On Demand. So please let us know if you would like to receive this additional data as well. No additional cost will be applicable for the same.
Chapter 10 Market Split by Configuration Analysis 2021 - 2033
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Chapter 11 Market Split by Application Analysis 2021 - 2033
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Chapter 12 Market Split by Output Signal Format Analysis 2021 - 2033
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Chapter 13 Market Split by End User Analysis 2021 - 2033
This chapter helps you understand the Key Takeaways and Analyst Point of View of the global Optical Encoder ic market
Chapter 14 Research Findings
Here the analyst will summarize the content of entire report and will share his view point on the current industry scenario and how the market is expected to perform in the near future. The points shared by the analyst are based on his/her detailed in-depth understanding of the market during the course of this report study. You will be provided exclusive rights to interact with the concerned analyst for unlimited time pre purchase as well as post purchase of the report.
Chapter 15 Research Methodology and Sources
Why Shafted have a significant impact on Optical Encoder ic market? |
What are the key factors affecting the Shafted and Hollow-Shaft of Optical Encoder ic Market? |
What is the CAGR/Growth Rate of Healthcare Equipment during the forecast period? |
By type, which segment accounted for largest share of the global Optical Encoder ic Market? |
Which region is expected to dominate the global Optical Encoder ic Market within the forecast period? |