Smart Factory Retrofit Solutions Market 2025 – Market Size & Segments Analysis, Industry Trends, Manufacturers Analysis, Opportunities and Forecast 2034

The global market value of the Smart Factory Retrofit Solutions Market was estimated to be USD 152.2 billion in 2023 and is projected to grow at a CAGR of 10.5% during the forecast period. Increasing demand for automation and digital transformation is driving growth in the market.

The growing emphasis on energy efficiency and sustainability is driving growth in the market. Increasing technological advancements in AI, machine learning, and IoT are facilitating smarter decision-making. Smart factory retrofit solutions are gaining traction due to rising demand for industrial automation, and cost-effectiveness vs New Infrastructure.

Growth Drivers

Sustainability regulations are helping companies comply with carbon emissions targets by optimizing energy use. Adoption of smart HVAC, predictive maintenance, and energy-efficient systems is rising. Cloud-based and edge computing solutions enable real-time data analytics without overhauling infrastructure.

Smart sensors and IoT devices seamlessly integrate with existing machines, improving performance. Retrofitting enables better tracking, automation, and efficiency in production lines. Smart factories use RFID, AI, and block chain for improved inventory and supply chain visibility. Small and medium enterprises are increasingly adopting smart factory retrofits due to lower entry costs.

Scalable solutions allow gradual upgrades rather than full automation projects. Labor shortages in manufacturing are driving demand for automation and AI-driven efficiency. Retrofitting allows companies to improve productivity without relying heavily on manual labor. Many governments offer grants, subsidies, and tax incentives for smart factory upgrades.

Segmentation

Smart Factory Technology

·         Distributed Control Systems (DCS)

·         Enterprise Resource Planning (ERP)

·         Human Machine Interface (HMI)

·         Manufacturing Execution System (MES)

·         Product Life Cycle Management (PLM)

·         Program Logic Controller (PLC)

·         Supervisory Controller and Data Acquisition (SCADA)

·         Others

Smart Factory Field Devices

·         Sensors

·         Industrial Robotics

·         Machine Vision Systems

·         Others

Smart Factory Application

·         Aerospace & Defense

·         Automotive

·         Energy & Power

·         Food and Beverages

·         Healthcare

·         Semiconductor & Electronics

·         Oil & Gas

·         Others

By Regions

·         Asia Pacific

·         North America

·         Latin America

·         Middle East and Africa

·         Europe

Smart Factory Retrofits Solution Market by Technology Segmentation

On the basis of the technology, The Smart factory retrofits solution market is segmented into Distributed Control Systems (DCS), Enterprise Resource Planning (ERP), Human Machine Interface (HMI), Manufacturing Execution System (MES), Product Life Cycle Management (PLM), Program Logic Controller (PLC), Supervisory Controller and Data Acquisition (SCADA), and Others.

Distributed Control Systems is the leading segment in the market, and is expected to dominate the market during the forecast period due to its critical role in enhancing process control and operational efficiency across various industries. Manufacturing execution systems segment are essential for real-time monitoring, data-analytics, and process optimization, which enhances overall manufacturing efficiency.

Enterprise Resource Planning (ERP) is expected to dominate the market during the forecast period because they are expected to seek the growth as manufacturers seek comprehensive solutions for resource management, and strategic planning. Without relying heavily on manual labor, retrofitting provides the advantage of improving productivity.

Smart Factory Retrofits Solution Market by Application

On the basis of the application, the Smart Factory Retrofits Solution is segmented into Aerospace & Defense, Automotive, Energy & Power, Food and Beverages, Healthcare, Semiconductor & Electronics, Oil & Gas, and Others. The automotive sector is the leading market segment due to the industry’s rapid adoption of automation and advanced manufacturing technologies to enhance production efficiency, reduce costs, and improve product quality.

The growing emphasis on electric vehicles and sustainable manufacturing practices further drives the demand for innovative production techniques that smart factories provide. The oil and gas industry holds a significant share, commanding approximately 19% of the total market in 2024. This substantial position is driven by the increasing adoption of automation and control systems.

Food and beverages is another leading segment due to 3D food printing and machine vision, which are revolutionizing production processes in this industry, offering high-quality products while keeping maintenance, production, and distribution costs low. Healthcare, Semiconductor, and Electronics segment is also witnessing moderate growth during the forecast period.

Regional Outlook 

On the basis of the regions, the smart factory retrofits solution market is segmented into 5 regions: Asia Pacific, North America, Latin America, Middle East and Africa, and Europe. Due to rapid adoption of Industry 4.0 technologies, the North America region is the leading one and is expected to dominate the market during the forecast period. The focus on sustainability and integration of AI and IoT is further propelling the market growth. The region, especially the U.S. and Canada, has a well-established manufacturing sector with industries like automotive, aerospace, electronics, and pharmaceuticals investing heavily in modernization.

The U.S. has been at the forefront of Industry 4.0 adoption, integrating IoT, AI, robotics, and cloud computing into manufacturing processes. Many manufacturers in North America prefer retrofitting existing factories with smart solutions rather than building new ones due to cost efficiency and sustainability goals. The push for carbon neutrality and energy-efficient production encourages manufacturers to retrofit their factories with smart monitoring, automation, and AI-driven analytics.

Companies such as Rockwell Automation, Honeywell, and Siemens USA drive innovation in smart factory retrofitting solutions. Programs like U.S. advanced manufacturing initiatives and funding for smart manufacturing through organizations like NIST boost the market growth. The presence of key players in the market is driving demand significantly. The Asia Pacific region is also witnessing significant growth during the forecast period due to the presence of a robust manufacturing base, particularly in countries like China, Japan, and South Korea, which are heavily investing in smart manufacturing technologies to enhance efficiency and productivity.

Retrofitting existing manufacturing facilities with Internet of Things capabilities is a cost-effective strategy gaining traction in the region. Due to strong regulatory frameworks, Europe is also witnessing growth during the forecast period. The expansion is driven by strong regulatory frameworks and ambitious climate targets, such as the energy performance of buildings directive and the renovation wave initiative, which emphasize energy efficiency and sustainability. Technological innovations such as advancements in smart building technologies and renewable energy integration are further propelling the market.

Key Players

·         Siemens AG

·         Rockwell Automation Inc.

·         Honeywell, International, Inc.

·         ABB Ltd.

·         Mitsubishi Electric Corporation

·         Danfoss

·         Fanuc Corporation

·         Schiender Electric

·         GE Vernova

·         Other Players