Europe Smart Factory Market
Europe Smart Factory Market By Component (Industrial Sensors, Industrial Robots, Industrial 3D Printing, Machine Vision Systems), Solution (SCADA, Manufacturing Execution Systems (MES), Plant Asset Management, Industrial Safety) - Forecast to 2032
OVERVIEW
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
The Europe smart factory market is projected to grow from USD 24.13 billion in 2025 to USD 45.60 billion by 2030, growing at a CAGR of 9.5%. The Europe smart factory market is growing steadily as manufacturers invest in automation, industrial AI, and connected production systems to improve efficiency and flexibility. Strong demand from automotive, aerospace, and consumer goods industries, along with increasing focus on energy efficiency and sustainability, continues to drive market expansion.
KEY TAKEAWAYS
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BY COUNTRYGermany is expected to dominate the Europe smart factory market with a 31.2% share in 2025.
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BY COMPONENTBy component, the industrial sensors segment is expected to dominate the Europe smart factory market in 2025.
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BY SOLUTIONBy solution, the plant asset management (PAM) segment is expected to record a high CAGR during the forecast period.
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BY INDUSTRYThe process industries held largest share of the Europe smart factory market in 2024.
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COMPETITIVE LANDSCAPE - KEY PLAYERSSiemens, Schneider Electric, and ABB were identified as star players in the Europe smart factory market, given their strong market share and product footprint.
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COMPETITIVE LANDSCAPE - STARTUPS/SMESPilz GmbH & Co. KG, Ing. Punzenberger COPA-DATA GmbH, and Sprecher Automation GmbH, among others, have distinguished themselves as startups and SMEs by securing strong footholds in specialized niche areas, underscoring their potential as emerging market leaders.
The Europe smart factory market is witnessing steady growth as manufacturers accelerate digitalization to improve productivity, flexibility, and operational efficiency. Increasing adoption of automation, industrial AI, robotics, and connected factory systems is supporting the modernization of both greenfield and brownfield facilities. Strong investments from automotive, aerospace, food & beverages, and electronics industries are driving demand for advanced manufacturing solutions. Additionally, rising focus on energy efficiency, sustainability, and regulatory compliance continues to support market expansion across Europe.
TRENDS & DISRUPTIONS IMPACTING CUSTOMERS' CUSTOMERS
The Europe smart factory market is undergoing a significant transformation as manufacturers move from traditional automation toward data-driven, connected, and intelligent production environments. Emerging trends such as industrial AI, edge computing, advanced robotics, digital twins, and smart asset management are reshaping operational models across the region. These technologies are enabling real-time control, predictive maintenance, and flexible production in industries such as automotive, aerospace, electronics, and consumer goods. Growing emphasis on energy efficiency, sustainability, and regulatory compliance is further accelerating adoption. Together, these trends are driving new revenue streams and redefining how factories operate across Europe.
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
MARKET DYNAMICS
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Expansion of automotive, EV, and high-precision manufacturing sectors
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Increased investments in digitalization of legacy factories
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High upfront investment required for automation and digital factory upgrades
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Complexity in integrating smart technologies with legacy systems
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Increased use of digital twins and simulation in production planning
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Adoption of edge computing and industrial AI for real-time factory intelligence
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Balancing automation with workforce reskilling requirements
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Maintaining system reliability in highly connected factory environments
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
Driver: Expansion of automotive, EV, and high-precision manufacturing sectors
Growth in automotive and EV manufacturing across Europe is accelerating demand for smart factory technologies. High-precision industries such as electronics, machinery, and aerospace are increasingly adopting automation to improve quality and consistency. These sectors require advanced control, robotics, and digital production systems, driving sustained market growth.
Restraint: High upfront investment required for automation and digital factory upgrades
Smart factory implementation requires significant capital investment in equipment, software, and system integration. Many manufacturers, particularly small and mid-sized enterprises, face budget constraints when upgrading legacy facilities. This slows adoption and often leads to phased or selective deployment of smart technologies.
Opportunity: Increased use of digital twins and simulation in production planning
European manufacturers are increasingly adopting digital twins to simulate production lines and optimize workflows before deployment. These tools help reduce errors, improve asset utilization, and shorten commissioning timelines. Growing focus on efficiency and flexibility is expected to further boost adoption of simulation-based planning solutions.
Challenge: Balancing automation with workforce reskilling requirements
The transition to smart factories is increasing demand for digitally skilled workers. Many manufacturers face challenges in reskilling existing employees to operate and manage advanced automation systems. Ensuring workforce readiness while maintaining productivity remains a key challenge across Europe.
EUROPE SMART FACTORY MARKET: COMMERCIAL USE CASES ACROSS INDUSTRIES
| COMPANY | USE CASE DESCRIPTION | BENEFITS |
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Implementation of IIoT and AI in the Amberg electronics factory in Germany for autonomous decision-making and real-time workflow optimization | Achieved 99.98% product quality rate, drastically improving precision and efficiency in manufacturing |
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Collaborated with Ericsson to build a 5G testbed in the smart factory in Kista, Sweden, to explore 5G enhancements for manufacturing use cases, focusing on robotics with wireless communication enabling mobile robotics and software offload to cloud | Enhanced manufacturing processes through wireless 5G, enabling mobile robotics and cloud-based software offload |
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Deployment of Nexeed industrial IoT software and connected systems in multiple European plants, including the Blaichach plant in Germany for ABS/ESP production and the Dresden wafer fab as a fully connected AIoT factory with 5G capabilities | Increased productivity by up to 24% globally | reduced maintenance costs by 25% | improved machine availability by 15% | enhanced efficiency through real-time data and predictive maintenance |
Logos and trademarks shown above are the property of their respective owners. Their use here is for informational and illustrative purposes only.
MARKET ECOSYSTEM
The Europe smart factory market ecosystem is supported by a strong network of automation and digital technology providers working closely with industrial end users to drive manufacturing modernization. The ecosystem spans smart factory component and solution providers. These players offer automation systems, industrial software, robotics, sensors, and advanced manufacturing solutions. Adoption is led by end-use industries such as automotive, aerospace, and consumer goods, which are investing in flexible, data-driven production. Ongoing collaboration across the ecosystem supports efficient deployment of smart factory technologies across Europe.
Logos and trademarks shown above are the property of their respective owners. Their use here is for informational and illustrative purposes only.
MARKET SEGMENTS
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
Europe Smart Factory Market, By Component
Industrial sensors dominated the Europe smart factory market in 2024 due to their widespread use across automation, quality control, and condition monitoring applications. Strong demand from automotive, machinery, and process industries accelerated deployment of vision sensors, proximity sensors, and smart measurement devices. Increasing focus on real-time data collection and predictive maintenance further supported high adoption. Sensors also serve as a foundational layer for advanced analytics and industrial AI use cases.
Europe Smart Factory Market, By Solution
Plant asset management solutions are expected to record a high growth rate in Europe as manufacturers prioritize asset reliability and maintenance optimization. PAM platforms enable predictive and condition-based maintenance, helping reduce unplanned downtime and maintenance costs. Rising adoption of industrial IoT and analytics is improving asset visibility across geographically distributed plants. This growth is further supported by aging industrial infrastructure across Europe.
Europe Smart Factory Market, By Industry
Discrete industries are projected to grow at a higher rate in the Europe smart factory market, driven by automation investments in automotive, electronics, and machinery manufacturing. These industries require flexible production lines, high precision, and rapid changeovers, increasing demand for robotics, machine vision systems, and digital control systems. Smart factory technologies help improve productivity while addressing skilled labor shortages. Growing EV and advanced manufacturing initiatives further support adoption.
REGION
Germany to record highest growth rate in Europe smart factory market during forecast period.
Germany is expected to register the highest growth rate in the Europe smart factory market, supported by strong Industry 4.0 initiatives and advanced manufacturing capabilities. The country’s automotive and industrial machinery sectors are heavily investing in automation, industrial AI, and digital factory platforms. Continuous modernization of brownfield plants is accelerating the adoption of smart technologies. Germany also benefits from a strong ecosystem of automation technology providers and system integrators.
EUROPE SMART FACTORY MARKET: COMPANY EVALUATION MATRIX
In the Europe smart factory market matrix, Siemens (Star) and Schnieder Electric (Star) hold strong positions under the SCADA solution segment with their broad product portfolios, regional presence, and robust financial capabilities. Their continuous innovation and brand equity enable them to lead large-scale adoption of smart factory solutions in Europe.
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
KEY MARKET PLAYERS
- ABB (Switzerland)
- Emerson Electric Co. (US)
- GE Vernova (US)
- Siemens AG (Germany)
- Rockwell Automation Inc. (US)
- Schneider Electric (France)
- Honeywell International Inc. (US)
- Endress+Hauser Group Services AG (Switzerland)
- Yokogawa Electric Corporation (Japan)
- FANUC Corporation (Japan)
- ONLY THE FIRST FIVE NEED TO BE HYPERLINKED!
MARKET SCOPE
| REPORT METRIC | DETAILS |
|---|---|
| Market Size in 2024 (Value) | USD 22.51 Billion |
| Market Size in 2030 (Value) | USD 45.60 Billion |
| Growth Rate | CAGR of 9.5% from 2025 to 2032 |
| Years Considered | 2021–2032 |
| Base Year | 2024 |
| Forecast Period | 2025–2032 |
| Units Considered | Value (USD Billion), Volume (Million Units) |
| Report Coverage | Revenue Forecast, Company Ranking, Competitive Landscape, Growth Factors, and Trends |
| Segments Covered |
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| Country-level Scope | Europe (Germany, UK, France, Italy, Spain, Poland, Nordics, Rest of Europe) |
WHAT IS IN IT FOR YOU: EUROPE SMART FACTORY MARKET REPORT CONTENT GUIDE
DELIVERED CUSTOMIZATIONS
We have successfully delivered the following deep-dive customizations:
| CLIENT REQUEST | CUSTOMIZATION DELIVERED | VALUE ADDS |
|---|---|---|
| Comprehensive Smart Factory Ecosystem Mapping (Europe) | Mapped the Europe smart factory ecosystem covering automation hardware, industrial software, robotics, sensors, industrial networking, additive manufacturing, and digital platforms across key manufacturing hubs | Provides clear visibility into ecosystem structure, technology interdependencies, and regional growth pockets, supporting informed market entry and expansion strategies |
| Competitive Benchmarking of Smart Factory Vendors | Benchmarked leading global and European automation players based on product portfolios, software depth, Industry 4.0 readiness, regional presence, partner ecosystems, and end user adoption | Strengthens competitive intelligence, enables objective vendor comparison, and supports partnership, investment, and acquisition decisions |
| Country-level Market Assessment | Analyzed smart factory adoption, investment trends, and demand patterns across Germany, UK, France, Italy, Nordics, and Eastern Europe | Helps prioritize high-growth countries, align sales strategies, and optimize regional resource allocation |
| Industry-specific Use Case Analysis | Assessed high-value smart factory use cases across automotive, EV manufacturing, aerospace, food & beverages, pharmaceuticals, and electronics | Identifies revenue-generating opportunities, sharpens industry targeting, and improves go-to-market focus |
| Technology Roadmap & Adoption Maturity | Evaluated adoption maturity of industrial AI, edge computing, digital twins, robotics, MES, and OT–IT convergence across brownfield and greenfield factories | Supports long-term technology planning and aligns investment decisions with Europe’s digital transformation timelines |
RECENT DEVELOPMENTS
- December 2025 : ABB completed the acquisition of Gamesa Electric’s power electronics business in Spain from Siemens Gamesa, strengthening its renewable power conversion portfolio with wind converters, industrial battery energy storage (BESS), and solar inverters, expanding its serviceable industrial installed base and supporting grid-integrated factory power solutions in Europe.
- November 2025 : Siemens AG completed the acquisition of ebm-papst’s industrial drive technology business, expanding its digital automation and flexible manufacturing solutions portfolio under the Siemens Xcelerator umbrella, strengthening capabilities for intelligent drive and power solutions in factory automation.
- October 2025 : Siemens AG and Capgemini strengthened their strategic partnership to co-develop AI-native digital solutions for manufacturing, embedding artificial intelligence into production engineering, operations, and sustainability workflows across European industrial sectors.
- July 2025 : Dassault Systèmes accelerated its factory virtual twin strategy by acquiring Ascon Qube’s AI-powered automation technology, enabling software-defined automation and enhanced simulation and optimization capabilities across smart manufacturing environments.
Table of Contents
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Methodology
The research study involved four major steps in estimating the size of the Europe Smart Factory Market . Exhaustive secondary research has been done to collect important information about the market and peer markets. The next step has been to validate these findings and assumptions and size them with the help of primary research with industry experts across the value chain. Both top-down and bottom-up approaches have been used to estimate the market size. After this, the market breakdown and data triangulation approaches have been adopted to estimate the market sizes of segments and subsegments.
Secondary Research
Various secondary sources were referred to in the secondary research process to identify and collect the information required for this study. These sources include annual reports, press releases, investor presentations of companies, white papers, and articles from recognized authors. Secondary research was mainly done to obtain key information about the market’s value chain, the pool of key market players, market segmentation according to industry trends, regional outlook, and developments from market and technology perspectives.
In the Europe Smart Factory Market report, the market size has been estimated using the top-down and bottom-up approaches, along with several other dependent submarkets. The major players in the market were identified using extensive secondary research, and their presence in the market was determined using secondary and primary research. All the percentage splits and breakdowns have been determined using secondary sources and verified through primary sources.
Primary Research
Extensive primary research has been conducted after understanding the Europe Smart Factory Market scenario through secondary research. Several primary interviews have been conducted with key opinion leaders from demand- and supply-side vendors across four major regions—North America, Europe, Asia Pacific, and RoW. Approximately 40% of the primary interviews were conducted with the demand-side vendors and 60% with the supply-side vendors. Primary data has been collected mainly through telephonic interviews, which consist of 80% of the total primary interviews; questionnaires and emails have also been used to collect the data.
After successful interaction with industry experts, brief sessions were conducted with highly experienced independent consultants to reinforce the findings of our primary research. This, along with the in-house subject matter experts’ opinions, led us to the findings described in the report. The breakdown of primary respondents is as follows:
Market Size Estimation
In the complete market engineering process, top-down and bottom-up approaches and several data triangulation methods have been used to estimate and forecast the overall market segments and subsegments listed in this report. The key players in the market have been identified through secondary research, and their market shares in the respective regions have been determined through primary and secondary research. This entire procedure includes the study of annual and financial reports of the top market players and extensive interviews for key insights (quantitative and qualitative) with industry experts (CEOs, VPs, directors, and marketing executives).
All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources. All the parameters affecting the markets covered in this research study have been accounted for, viewed in detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data. This data has been consolidated and supplemented with detailed inputs and analysis from MarketsandMarkets and presented in this report.
Bottom-Up Approach
- Identifying various industries using or expected to deploy different types of smart factory solutions at their facilities
- Analyzing use cases across regions and companies
- Estimating the size of the Europe Smart Factory Market based on the demand from these industries and companies
- Tracking the ongoing and upcoming installation contracts, acquisitions, expansions, and product launches by various companies, and forecasting the market based on these developments and other critical parameters
- Conducting multiple discussions with key opinion leaders to understand smart factory components and solutions by companies in these industries, and analyzing the breakdown of the scope of work carried out by each major company providing smart factory components
- Arriving at the market estimates by analyzing the country-wise sales of smart factory solutions to companies, and combining this data to get the regional market estimates
- Verifying and cross-checking the estimates at each level through discussions with key opinion leaders, including CEOs, directors, operations managers, and domain experts at MarketsandMarkets
- Studying various paid and unpaid information sources, such as annual reports, press releases, and white papers
Top-Down Approach
- Information related to the revenue of key manufacturers and providers of smart factory components and solutions was studied and analyzed to estimate the size of the Europe Smart Factory Market .
- Multiple discussions were conducted with key opinion leaders to understand the demand for smart factory components and analyze the break-up of the scope of work carried out by each major company.
- Revenue, geographic presence, key industries served, and the diverse offerings of all identified players in the Europe Smart Factory Market were studied to estimate and arrive at the percentage split of different market segments.
- All major players in the Europe Smart Factory Market were identified through secondary research and verified through brief discussions with industry experts.
- Multiple discussions were conducted with key opinion leaders of all major companies involved in developing smart factory solutions to validate the market split based on component, solution, industry, and region.
- Geographic splits were estimated through secondary sources based on factors such as the number of players offering smart factory solutions in a specific country or region, and the industries for which these players offer solutions.
Data Triangulation
After arriving at the overall market size from the estimation process explained above, the overall market has been split into several segments and subsegments. The data triangulation procedure has been employed wherever applicable to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments. The data has been triangulated by studying various factors and trends from both the demand and supply sides. Additionally, the market size has been validated using top-down and bottom-up approaches.
Market Definition
A smart factory is a highly digitalized and automated production system connected throughout all the production processes in a facility. It can self-optimize performance across a broad network, self-adapt to changing production conditions and requirements in real time, and autonomously run an entire production system. The main advantage of a smart factory is its ability to evolve with the changing needs of the organization. A smart factory uses a network to connect the virtual and physical elements of the production process to manufacturing operations. It represents an autonomous manufacturing environment that can handle any technical issues in real time during production using fragmented information and communication structures for the optimum management of production processes.
Key Stakeholders
- End Users
- Government Bodies, Venture Capitalists, and Private Equity Firms
- Smart Factory Manufacturers
- Smart Factory Solution & Component Distributors
- Smart Factory Industry Associations
- Professional Service/Solution Providers
- Research Institutions and Organizations
- Standards, Organizations, and Regulatory Authorities in Europe Smart Factory Market
- System Integrators
- Technology Consultants
Report Objectives
- To describe and forecast the Europe Smart Factory Market , in terms of value, based on component, solution, and industry, in terms of value
- To forecast the market size for the three major North American Countries: US, Canada, Mexico, in terms of value
- To provide detailed information regarding the drivers, restraints, opportunities, and challenges influencing market growth
- To provide a detailed overview of the smart factory value chain and ecosystem
- To strategically analyze micromarkets with respect to individual growth trends, prospects, and contributions to the total market
- To strategically profile the key players and comprehensively analyze their market positions in terms of ranking and core competencies
- To analyze competitive developments, such as product launches, acquisitions, collaborations, agreements, and partnerships, in the Europe Smart Factory Market
- To provide ecosystem analysis, case study analysis, patent analysis, technology analysis, key conferences and events, Porter’s five forces analysis, regulatory landscape, impact of AI/Gen AI, and impact of the 2025 US Tariff on the Europe Smart Factory Market Available customizations:
With the given market data, MarketsandMarkets offers customizations according to the specific requirements of companies. The following customization options are available for the report:
- Detailed analysis and profiling of additional market players based on various blocks of the supply chain
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Growth opportunities and latent adjacency in Europe Smart Factory Market