AI Sensor Market

[227 Pages Report] The AI sensor market is projected to reach USD 22.1 billion by 2028, from USD 3.0 billion in 2022, at a CAGR of 41.6%. Factors such as the high installation and maintenance cost, lack of trust and awareness among end users, and complexity in data storage act as restraints for the growth of the market.

AI Sensor Market Forecast to 2028

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Market Dynamics

Smart infrastructure and digitalization to facilitate edge computing growth.

Rapid urbanization and digitalization significantly impact the growth of smart infrastructure. Edge computing is a critical technology increasingly used in smart infrastructure. It enables real-time data processing and analysis from smart sensors and other IoT devices. By processing data near the source, edge computing can reduce latency, increase reliability, and improve overall system performance. Smart infrastructure utilizes data and technology to optimize the performance of buildings, transportation systems, energy networks, and other essential infrastructure. With the help of smart sensors, IoT devices, and other digital tools, smart infrastructure can manage and monitor anything from traffic patterns to energy usage, enabling cities to make more informed decisions and provide better services to their residents.

The increasing urban population and rapid urbanization have increased the demand for more sustainable and efficient infrastructure solutions. Over 50% of the world’s population lives in urban areas. This is expected to grow by 1.5 times by 2045, which means nearly 75% of the global population will live in urban areas. This, in turn, will push the upgradation of manufacturing processes by implementing industry 4.0 norms that require AI sensors for operations. Furthermore, the development of smart cities, smart automotive, smart traffic systems, smart homes, smart factories, and smart transport systems depend on AI and IoT technologies and cannot be attained without AI sensors.

Restraint: High installation and maintenance cost

Cost plays a critical role in determining the growth of the AI sensor market. The huge capital requirement for the deployment and maintenance of integrated AI sensors can pose challenges for market players. Furthermore, additional expenditure on AI sensor software solutions, related software compatibility compliances, and software maintenance services make the deployment of AI sensors costly, limiting the adoption of these sensors. Artificial intelligence is still under development in some sectors as it cannot be applied to specific applications due to technical and implementation constraints. This, along with the high cost of ownership, may limit the growth of this market. End users also tend to be slightly more skeptical about the cost benefits of AI sensors across emerging use cases.

Opportunity: Growing preference for AI-sensor enabled wearables

Wearables based on AI sensors form one of the fastest-growing markets. Smartwatches and ear-worn devices are the leading market segments. This market is projected to account for USD 265.4 billion by 2026, registering a CAGR of 18.0% during the forecast period. Spending on hearables increased by 124% in 2020, and global shipments of wearable technology reached 570 million units in 2021 at a CAGR of 16.6% (Source: MarketsandMarkets). This growing preference for wearables will likely boost the market for AI sensors. The adoption of wearables is growing rapidly as users increasingly focus on improving their overall health and fitness, driving the demand for fitness and medical tracking equipment. This, in turn, drives the demand for AI sensors. These sensors are used in applications such as smart glasses/goggles; ring/fingerworn scanners; footwear such as athletic, fitness, and sports shoes; wristwear such as advanced electronic watches and wristbands; smart textiles; and headbands & neckwear. Bosch Sensortec (Germany) has started actively working on the wearable technology market. Bosch Sensortec has developed a revolutionary self-learning motion sensor, BHI260AP, that adds AI to portable devices. The sensor enables manufacturers of wearable and hearable devices to provide personalized fitness tracking through self-learning AI software in the sensor. This self-learning AI sensor will change how users interact with their fitness devices from a one-way approach to an interactive way of training.

Challenges: Lack of skilled workforce

The AI sensor market is growing rapidly, and there is a significant shortage of trained professionals with the skills and expertise necessary to develop and maintain AI sensor systems. This shortage of skilled workforce is a major challenge for companies operating in this market and can limit their ability to innovate and compete effectively. One of the main reasons for this shortage is the relatively new nature of the field, due to which few educational programs and training opportunities are available for those interested in pursuing careers in AI sensors. Additionally, the complexity of these systems requires a broad range of skills, including expertise in cognitive computing, machine learning, deep learning, image recognition technologies, data analytics, computer vision, and signal processing. Integrating AI solutions into existing systems requires extensive data processing to replicate the behavior of a human brain. Even minor errors can result in system failure or malfunctioning of a solution, affecting outcomes and desired results. This can make it difficult for companies to find individuals with the necessary skillsets to fill these roles.

AI sensor market Map:

Motion sensors in consumer electronics application to account for largest market share during forecast period.

Motion sensors are primarily used across consumer electronics applications. Major use cases for motion sensors lie across wearable electronic devices. Motion sensors, such as accelerometers, gyroscopes, MEMS, and a combination of these sensors, are the most used type of sensors incorporated in wearables. The market for these sensors is expected to grow due to consumers' increased focus on tracking real-time motion-sensing activities, such as step counting and walking distance covered. This generated data analysis provides users with specific results that can be used to define health and fitness goals.

Consumer electronics to account for second-largest market share of the AI sensor market during forecast period.

The consumer electronics segment is expected to hold the second-largest market share during the forecast period. Artificial intelligence has become pivotal in consumer electronics. Mobile devices, smart TVs, speakers, virtual personal assistants, and distributed and wearable sensors are among the many products and services benefiting from AI developments. With rapid urbanization and the rising use of the internet, consumer lifestyles are evolving, leading to changes in preferences. The growing inclination towards smart and intelligent devices has led to consumer electronics market growth at a fast rate. Moreover, the availability of low-cost AI chipsets also boosts the adoption of intelligent devices across the consumer electronics sector.

Asia Pacific to have the largest market share in the AI sensor market during the forecast period.

The Asia Pacific region is the market leader for AI sensors in various industries such as consumer electronics, automotive, and manufacturing sectors, with a huge demand coming from countries like China, Japan, and India. China has shown massive growth due to its rapidly expanding industrial sector and increasing adoption of smart home devices.

Japan is also expected to see a high growth in the AI sensor industry, driven by the country's strong focus on AI research and development. The Japanese government has launched several initiatives to promote the adoption of AI technology in various sectors, including healthcare, manufacturing, and transportation.

AI Sensor Market by Region

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Key Market Players

Robert Bosch GmbH (Germany),  Teledyne Technologies Incorporated (US),  Sensirion AG (Switzerland),  Sensata Technologies, Inc. (US),  Goertek Inc. (China), Hokuriku Electric Industry Co., Ltd. (Japan), MEMSIC Semiconductor Co., Ltd. (China), Movella Inc. (US), and Senodia Technologies (Shanghai) Co., Ltd. (China) are some AI sensor companies operating in the market.

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Scope of the Report

AI Sensor Market Highlights

This research report categorizes the AI sensor market based on Type, Sensor Type, Technology, Application, and Region

Recent Developments

• In April 2022, Robert Bosch GmbH acquired Five AI (France), which builds self-driving software components and development platforms to combat the biggest problems in the self-driving car space. This acquisition helped Robert Bosch GmbH boost its presence in the smart mobility solutions and autonomous vehicles markets.
• In May 2022, Sensata Technologies, Inc. partnered with Nanoprecise (Canada) to launch a new asset monitoring solution that enables predictive maintenance for rotary assets. This partnership will deliver actionable insights to plant managers with the help of Nanoprecise’s AI algorithm, which can extract data from the six sensors offered by the Sensata IQ platform.

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