Smart Manufacturing Dominates AIoT Application Market, Projected $80 Billion by 2025

According to the international market research firm MarketsandMarkets, smart manufacturing is projected to retain its top position in the Artificial Intelligence of Things (AIoT) application market in 2025, with an estimated market size of $80 billion. Following closely behind are digital twin and AI technologies, with market sizes of $19.7 billion and $17.2 billion, respectively.

In an interview with Economic Daily News, Tsai Ya-Hui, Deputy Section Chief of the Mechanical and Mechatronics Systems Lab at the Industrial Technology Research Institute (ITRI), highlighted Taiwan's manufacturers' ability to effectively navigate the challenges posed by the pandemic and financial market disruptions last year. Tsai attributed this success to various transformations and upgrades implemented by manufacturers. These measures, she emphasized, played a crucial role in shielding the market from the pandemic's impacts and enabling it to overcome prevailing difficulties. Regarding the practice of digital transformation, Tsai candidly stated that every company in the market must prioritize digitization before embarking on digital transformation and smart manufacturing. This digitization process serves as a fundamental threshold, as enterprises need to complete it before integrating relevant software or AI technology.

Based on the latest data from international market research firm MarketsandMarkets, the smart manufacturing market is projected to experience significant growth by 2025. Industrial AI applications are expected to lead this growth, with a nearly seven-fold increase in market size and a compound annual growth rate (CAGR) of 50.9%. Following closely behind are digital twin applications, forecasted to see a 5.6-fold increase in market size and a CAGR of 45.7%. Despite the global machine tool market reaching an upper limit of US$90~100 billion, the smart manufacturing market still offers ample room for expansion.

According to research data from ITRI, smart manufacturing will continue to have a significant impact on the machine tool industry for at least the next two years. In the future, manufacturing processes will increasingly rely on emerging technologies such as AIoT, cloud applications, AI, and 5G. Additionally, there will be a shift towards using sensing, information processing, analysis, judgment, decision-making, future prediction, virtual applications, and software-driven hardware sales models. This transformation will replace the traditional approach of single-machine equipment sales. Moreover, the supply chain dynamics will evolve from a clear upstream and downstream system to a more interconnected horizontal ecosystem.