Manufacturing AI grows 24% annually: report

Manufacturing AI grows 24% annually: report
Artificial intelligence (AI) is gaining traction in the manufacturing sector, which is on track to invest US$13.2 billion annually on AI software, hardware and services by 2025, registering a 24.3% compound annual growth rate from the total investment of US$2.9 billion in 2018, market intelligence firm Tractica predicted.
 
Main drivers for manufacturing AI are the need for quality monitoring, yield improvement, predictive maintenance, energy management, and more. Tractica pointed out that the top use cases will be those that increase operational efficiencies and consequently cost reduction of production processes.
 
“As manufacturing becomes more cost-sensitive and customers demand quality, manufacturers are using AI to enhance the performance of equipment, reduce downtime, and improve the quantity and quality of products,” says Tractica's principal analyst Keith Kirkpatrick. “The overarching driver of AI technology is the ability to find insights in large data sources that would be too unwieldy for humans to analyze quickly.”
 
In the manufacturing sector, most of the activity around AI can be categorized as prediction machines run by statistical machine learning techniques. In specific cases, some manufacturers will deploy deep learning-enabled perception machines, generally to identify new patters or ways of looking at data.
 
Many AI systems also draw from other technologies like computer and machine vision, natural language processing and various information classification techniques. The goal is to harness the power of existing systems and combine the data output with machine learning or deep learning “to generate insights that can be interpreted and shaped via automated algorithms, instead of requiring humans to do the analysis of the myriad data points,” Tractica says in the Artificial Intelligence for Smart Manufacturing Applications report.

Manufacturing sector’s contradictions

The manufacturing industry exhibits some contradictions when it comes to automation and technology. On the one hand, manufacturing was among the first industries to integrate any type of technology more than a century ago, as companies incorporated tools to aid in the production process.
 
On the other hand, manufacturing companies are risk-averse when it comes to implementing new technology quickly, because a large amount of capital and time will be at stake.
 
“Given that even a few minutes of downtime on a production line can result in thousands of dollars lost. It is rare to see manufacturers incorporate new technology unless it has been tested extensively and shows that it can operate reliably and generate a ROI above the currently used production technology or methods,” Tractica says in the report Artificial Intelligence for Smart Manufacturing Applications.
 
Although well-capitalized and larger manufacturers are increasingly incorporating AI across a variety of use cases, Tractica believes the market is still largely in its infancy, albeit with significant growth potential.
 
AI, which includes the use of machine learning and deep learning is therefore projected to be incorporated within manufacturing environments “at a modest, yet steady pace,” Tractica says.

Asia Pacific grows the fastest

Of the US$13.2 global AI investment reached by 2025, AI services, which include installation, training, customization, application integration, support and maintenance, etc., will make up US$6.5 billion, followed by hardware at US$4.0 billion and software at US$2.7 billion.
 
From a regional perspective, much of the revenue will be generated within the Asia Pacific region, largely due to the prevalence of manufacturing activities. Tractica predicted that by 2025 revenues in Asia Pacific will reach US$4.9 billion, followed by North America’s US$3.9 billion and Europe’s US$3.0 billion.
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