Smart Manufacturing Sensors: Strategic Guidance for Anticipating the Demands of the IIoT

Demand for data, and therefore sensors, has soared since the start of the Industrial Internet of Things (IIoT) revolution. Even before that, manufacturers started to switch from analog to digital sensors to improve access to data, and approximately 70% have already made that switch. At first, the increase in the number of sensors applied to motion, position, environmental, and current sensors. Now, the types of sensors have started to vary further to include acoustic, ultrasonic, infrared, video, and industrial machine vision equipment. The demand for more and more varied sensors has boomed because manufacturers need them to support new use cases ranging from digital twins to digital products and process inspection and monitoring.

Several companies and visionaries saw this boom coming, which has meant that competition among industrial sensor suppliers has intensified. More industrial automation companies such as ABB, Emerson, Rockwell Automation, and Texas Instruments joined Analog Devices, Bosch, and Honeywell in supplying aftermarket sensors for their products. Some existing semiconductor and sensor companies including Infineon and NXP joined STMicroelectronics in the industrial space. In addition, some startups have started to make some noise including 3DSignals, which specializes in acoustic and ultrasonic sensing for predictive maintenance. We expect that none of the above companies joined the party too late, and this boom will continue.

Ultimately, sensor suppliers should aim to give their clients the tools they need to provide the most accurate and complete view of reality, both in the present and in the future. This goal culminates in digital twins. As more manufacturers adopt more condition-based monitoring solutions to feed into digital twins, they will also buy more sensors. Manufacturers will scale digital twin solutions across their enterprises, resulting in 11.95 billion industrial sensors installed by 2026.

These sensors will generate US$1.8 billion in revenues for sensor suppliers globally that year alone. That global total rises from US$389 million in 2017, with a CAGR of 19% over the forecast period. The United States will lead the way as so many of the above-mentioned companies have their businesses based there.China lags slightly behind the United States currently as cheaper Chinese labor acts as a substitute for sensors and connectivity; however, China will grow the fastest of any individual country, with a CAGR of 22% in sensor revenue over the forecast period. The Alliance of Industrial Internet (AII) and similar initiatives, along with the Chinese government, will push the adoption of IIoT platforms in China. At the same time, the Industrial Internet Consortium (IIC) and its testbeds will promote IIoT applications in the United States and around the globe.

To take advantage of this continued growth in sensor revenue, ABI Research believes that sensor suppliers should consider the following recommendations:

• Go to market with gateway suppliers that can provide extra headspace in computing power to process the extra data from more types of sensors on premises.As manufacturers and platform providers start to implement more advanced and predictive analytics and third-party apps, they will require more types of sensor data, including acoustic, video, and infrared. These types of sensor data take a lot more computing and processing power.
• Improve access to current and legacy sensor data. Right now, manufacturers still struggle with extracting and ingesting sensor data. As a result, data ingestion software such as PTC’s Kepware and Cisco Kinetic have made a serious business out of breaching data walls and bridging IT and OT. Sensor suppliers have an opportunity to work with companies such as PTC and Cisco, gateway suppliers such as HPE and Dell, and the manufacturers themselves to figure out how to connect their sensors to the gateways more easily.
• Partner with simulation specialists, edge processing specialists, and digital twin specialists.These companies constantly recommend that their clients get new types of sensors to maximize the utility of their products. Most do not have a preferred sensor supplier. Sensor suppliers should go knock down the doors of these software companies to find out how to better serve their needs and earn the title of preferred sensor supplier.
• Connect sensors directly to gateways, wirelessly. Near real-time sensor data will empower sensor fusion software to combine images from smartglasses with sensor data to allow the wearer to literally look inside machines, see defects, and load repair instructions on-site. We don’t expect to see enterprises scaling this use case in the next 3 years, partly because sensors rarely send readings directly to gateways at present. Manufacturers need more low-latency wireless connectivity from sensors to gateways to make this possible.

Following this strategic guidance should help sensor suppliers better prepare for the future opportunities that transformative technologies will bring.

For more insights and perspectives on manufacturing and the Industrial Internet, please check out ABI Research’s Smart Manufacturing Research Service.