The Functional Safety Market is estimated to be valued at US$ 5767.57 Mn in 2023 and is expected to exhibit a CAGR of 11% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Functional safety is the aspect of an overall safety system, intended to ensure that the system reliably performs its specified safety functions under all foreseeable operating conditions. Functional safety systems and components are used in industrial, medical, transportation, and other applications to ensure that the system implements appropriate safety measures. Functional safety components play a critical role in monitoring processes, controlling machinery, and ensuring no harm comes to operators.
Market key trends:
One of the major trends driving the growth of the functional safety market is the increasing demand from the automotive industry. With the rising adoption of advanced driver-assistance systems, autonomous driving functions, and electrification of vehicles, the demand for functional safety components and systems has increased significantly in the automotive sector. According to QuEST Forum, over 90% of automotive functions require functional safety design. The growing automobile production across the globe coupled with stringent safety regulations is favoring the growth of the functional safety market. Advanced technologies such as machine learning and artificial intelligence are also boosting the demand for functional safety solutions.
Porter's Analysis
Threat of new entrants: The high capital requirements for R&D, manufacturing facilities and specialized equipment pose a barrier for new players to enter the functional safety market.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of various functional safety equipment and solutions from different vendors. However, compliance with industry standards restricts flexibility in choices.
Bargaining power of suppliers: Suppliers have low to moderate bargaining power due to the presence of several component manufacturers. However, suppliers of specialized components derive bargaining power from their technical expertise.
Threat of new substitutes: There exists low threat from substitutes due to lack of alternatives that can provide the level of reliability and functional safety required for monitoring critical industrial processes.
Competitive rivalry: Intense due to the presence of global and regional players competing on product innovation, quality, and pricing.
SWOT Analysis
Strengths: Growing industrial automation coupled with stringent safety regulations boost demand. Established players possess strong technological capabilities and distribution networks.
Weaknesses: High deployment and maintenance costs limit adoption in cost-sensitive industries. Component interoperability issues arise due to differing industry standards.
Opportunities: Integration of functional safety into smart manufacturing creates growth prospects. Acceptance of industry 4.0 and Industrial IoT technologies expands the addressable market size.
Threats: Economic slowdowns impact capital expenditure budgets of end-use industries. Decline in global oil & gas prices poses challenges for the energy vertical.
Key Takeaways
The Global Functional Safety Market Demand is expected to witness high growth at a CAGR of 11% over the forecast period, due to increasing industrial automation and stringent safety regulations mandating risk reduction systems. By 2030, the market size is projected to reach a value of US$ 12,432.65 Mn.
Regionally, North America dominated the global market in 2023 with a share of over 30%, backed by stringent functional safety standards and early adoption of industrial IoT technologies across automotive, energy & utilities, and pharmaceutical industries in the US and Canada. Asia Pacific is anticipated to emerge as the fastest growing market, advancing at a CAGR of 12.2% through 2030 on account of the rapidly expanding manufacturing industry in China, India, Indonesia and Vietnam coupled with supportive government initiatives for making production processes smart and safe.
Key players operating in the functional safety market are Banner Engineering Corporation, Rockwell Automation Inc., Pepperl+Fuchs SE, Emerson Electric Company, Panasonic Industry Europe GmbH (Panasonic Corporation), Honeywell International Inc., Sick AG, Yokogawa Electric Corporation, Omron Corporation, ABB Ltd., General Electric Company, Schneider Electric SE, and Siemens AG. These players are focused on delivering comprehensive safety solutions involving safety controllers, emergency stop devices, and safety sensors & switches tailored for applications across sectors.
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Implementing functional safety ensures that safety critical control and protective systems are appropriately specified, designed, installed, and maintained.
The adoption of standards such as IEC 61508 and IEC 61511 has increased the dependency on functional safety systems to achieve the required risk reduction targets.
IEC 61508 and IEC 61511 are performance-based standards that promote the concept of the functional safety life cycle.
Schneider (France), Rockwell (US), and Yokogawa (Japan) are the leading players in the functional safety market.
Its strong position in various markets that gives it a competitive advantage.
The ABB Group was founded in 1988 as a result of the merger between Asea AB (Sweden) and BBC Brown Boveri AG (Switzerland).
