Japan Factory Automation and Industrial Controls Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Japanese Factory Automation and Industrial Controls Market is expected to grow at a CAGR of 11.02% over the forecast period (2021-2026). The outbreak of COVID-19 has triggered the manufacturing sector in Japan to re-evaluate its conventional production processes, primarily driving the digital transformation and factory automation practices across the production lines. The manufacturers are also collectively forced to devise and deploy multiple new and agile approaches to monitor product and quality control.​

Key Highlights

• Further, the manufacturing sector of Japan contributes nearly 20% of the nominal GDP, which is close to 10% for other developed countries. According to the IMF, owing to enhanced ITC adoption, the manufacturing sector of Japan has gained significantly high industrial productivity over the services sector.
• Japan has been a pioneer in transforming into an automated industrial economy. The Industrial version 4.0 is being adopted at a faster pace. The country has emerged as a manufacturing hub for factory automation products and supplies them to other regional markets in the Asia-Pacific region alongside international markets.
• Industry 4.0 has fueled the development of new technologies, like collaborative robots, AI-enabled robots have enabled industries to use robots to streamline many processes, increase efficiency, and eliminate errors. Increased workplace safety and improved production capabilities have further driven industries to invest in robotic systems.​
• Japan is a prominent player in the production of robots and factory automation systems. Five of the Top 10 producers in the robots and factory automation market are Japanese, and among them, they have almost 30% of the market worldwide. Japan's present leadership in robotics was built on a long history of technological leadership in manufacturing. At present, Japanese automation companies are benefiting from strong growth in demand for their products.
• Japan can be regarded as one of the leaders in the employment of robotics and automation in the production processes with the highly developed robotic sector and automation technologies. According to the latest IFR report published in 2020, Japan stands second in the world with 49.9 thousand annual installation industrial robots after China, with 140.5 thousand annual installations. The country is also the largest manufacturer of industrial robots catering to 52% of the global demand.

Key Market Trends

Distributed Control Systems Expected to Witness Significant Growth

• DCS are process-oriented platforms that depend on a network of interconnected sensors, controllers, terminals, and actuators to act as a centralized master controller for all of a facility’s production operations. Thus, a DCS focuses on controlling and monitoring processes and offering facility operators the ability to see all facility operations in one place.
• DCS allows implementing more advanced process automation strategies because it operates on a closed-loop control platform. This makes DCS ideal for controlling operations at a single facility or factory. Additionally, a DCS is critical for maximizing the visibility of a facility’s day-to-day operational processes.
• The control architecture comprises a supervisory level of control, overseeing multiply-integrated sub-systems, which are responsible for controlling the details of a localized process. These are connected to sensors and actuators and use setpoint control, to control the flow of material through the plant.
• One of the significant benefits of the DCS systems is that the digital communication between distributed controllers, workstations, and other computing elements follows the peer-to-peer access principle. In order to achieve greater precision and control in process industries, like the petrochemical, nuclear, and oil and gas industries, there is an increasing demand for controllers, which offer specified process tolerance around an identified set point.
• These requirements have driven the adoption of DCS, as these systems provide lower operational complexity and project risk, as well as functionalities, like flexibility for agile manufacturing in highly-demanding applications. The ability of DCS to integrate PLCs, turbomachinerycontrols, safety systems, third-party controls, and various other plant process controls for heat exchangers, feedwater heaters, water quality, among others, further drive the adoption of DCS in the energy sector.

Industrial Robots to Dominate the Market

• Japan is a prominent player in the production of robots and factory automation systems. Five of the Top 10 producers in the robots and factory automation market are Japanese, and among them, they have almost 30% of the market worldwide. Japan's present leadership in robotics was built on a long history of technological leadership in manufacturing. At present, Japanese automation companies are benefiting from strong growth in demand for their products.
• Increased demand across economies, product manufacturers are adopting robots to automate some of the repetitive processes.The industrial robots market has been witnessing a huge demand over the past decade, owing to the rising adoption of smart factory systems, of which these robots play a vital part.
• Industry 4.0, the newest industrial revolution, has fueled the development of new technologies, like collaborative robots, AI-enabled robots, etc., and have enabled industries to use robots to streamline many processes, increase efficiency, and eliminate errors. Increased workplace safety and improved production capabilities have further driven industries to invest in robotic systems.
• Industrial robots (IR) becoming smaller and cheaper without compromising on the quality, the market is becoming more attractive for key players in the end-user industry. However, higher investments may hinder the growth of the market.
• The rising demand for industrial robots was triggered by shortage of workers, who remained off duty due to COVID-19-related lockdowns, and an upgrade of traditional industries.

Competitive Landscape

The Japanese Factory automation and Indutrial Control Market is a moderately fragmented market with many firms in the market with each a having only a small level of market dominance. Industry 4.0, along with digitalization initiatives across regions, provides lucrative opportunities in the industrial robots market.

• October 2020 - Rockwell Automation, Inc. announced partnership with Microsoft Corp. to develop integrated, market-ready solutions that help industrial customers improve digital agility through cloud technology. They are together to deliver innovative edge-to-cloud-based solutions that connect information between development, operations and maintenance teams through a singular, trusted data environment.

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