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The global digital isolator market size was valued at USD 2.12 billion in 2021. The market is projected to grow from USD 2.22 billion in 2022 to USD 3.88 billion by 2029, exhibiting a CAGR of 8.3% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with digital isolator experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global digital isolator market exhibited a decline of 2.6% in 2020 as compared to 2019.
Digital isolators are electronic chips that transfer digital signals using the isolation barrier. These isolators employ radio frequency coupling techniques that transmit digital information across the isolation barrier. It acts as a substitute for optocouplers. Texas Instruments Inc. offers several isolator chips, such as ISO1042-Q1, an isolated CAN transceiver with 70 V fault protection and varying data rates. It is comparatively less prone to error and faster in speed for data transfer.
It has many applications, including gate drivers, DC-DC converters, ADCs, USB, and other communication devices. These isolators are used in automotive, medical devices, telecommunications, and industrial segments.
The rise in demand for noise-free consumer electronics and the increased usage of advanced technology-based connected devices drive the growth of isolator products. Also, rising investments and adoption of IoT devices have propelled the global demand for isolator products. According to the World Economic Forum Report in 2020, IoT investments among businesses reached USD 832 billion, and consumer spending on IoT solutions reached USD 236 billion in 2020. Such an increase in the adoption of connected devices and IoT solutions around the globe has created a massive demand for digital isolation products. Digital isolation is widely used in consumer electronics and IoT-connected appliances for easy information transfer.
Closure of Manufacturing Facilities Owing to Government Restrictions Hinders Market Growth
The COVID-19 pandemic has shown a downfall in the demand for global isolation products due to the restrictions on manufacturing electronic goods. Amid the pandemic, the consumer electronics components' supply chain was disrupted due to the government's regulations and lockdown measures. The COVID-19 outbreak has declined the demand for consumer electronics raw materials owing to the closure of manufacturing activities. In 2020, the global industrialized economies such as China, India, the U.S., and others registered a decline in manufacturing activities by 2.5%.
However, the manufacturing output remained unchanged among the Asia Pacific economies, owing to the solid production from China, South Korea, and Taiwan. The global market showed a slight decline in the market size by 2.6% in 2020 compared to 2019. In terms of revenue, the market witnessed a decrease in revenue to USD 2.04 billion in 2020.
Post-COVID-19 pandemic, the leading players in the market are developing advanced isolators for industrial automation and data center applications. For instance,
The advanced products streamline the designs and easily integrate with isolation for safety. It is a compact solution that encounters the standard medical requirement and isolates the high-fidelity industrial automation requirements. Isolation is widely used for end-user applications, including industrial automation systems, medical equipment, motor drives, solar inverters, and power supplies.
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Rising Trend of Industrial Automation to be a Driving Factor for the Market Growth
The increasing adoption of industrial automation across the manufacturing sector is a driving trend in the market. This isolator eliminates errors due to the ground loop in the industrial automation components. According to Fortune Business Insights, in 2021, the global industrial automation market size was valued at USD 191.89 billion and is expected to reach USD 395.09 billion by 2029, with 9.8% CAGR during the forecast period. It is widely used for industrial automation product manufacturing, which acts as an isolation barrier and avoids noise. It has low latency, noise reduction, and high data rate transfer capabilities. Several leading players have increased their production capacity by launching advanced isolators through merger and acquisition strategies. For instance,
Such increase in production and adoption of the isolator across industrial automation propelled the global market growth.
Increasing Adoption in the Industrial Robots and Consumers Electronics Industry Aids Market Growth
The rising demand for isolation products across consumer electronics and robotics product manufacturing is driving market growth. According to the World Economic Forum, the global consumer electronics market is expected to be valued at USD 1 trillion by 2030, and is growing fast. This primarily results from a surge in disposable income and consumer spending on advanced technology-based devices. These are widely used in electronics circuit design, especially robotics, and consumer electronics products. These devices are equipped with DC isolation type to prevent the potentially high voltage from harming the users and system. Industrial electronic equipment operates stably in harsh environments.
It avoids unstable factors, including high solid electromagnetic fields, high current surges, high noise, and fast transients. It ensures that the device is operated without faults for long and is reliable with a digital isolation circuit.
High Manufacturing Cost and Fluctuating Raw Material Pricing Hinder the Market Growth
The high cost of manufacturing isolation products and changing the raw material pricing hinder the digital isolator market growth. There are several small and medium-sized players in the global market, and leading players have acquired the maximum market share. These players face intense competition from large-size manufacturers. The size of the digital isolator is small and compact, requiring precise machinery to manufacture. Also, the price of the raw materials required to manufacture these isolation products varies per the industrial requirement. These factors hinder the global market growth.
Rising Adoption of Inductive Isolator Demand across the Consumer Electronics Industry Drives Market Growth
The market includes capacitive coupling, magnetic coupling, giant magnetoresistive, and others (inductive coupling) by technology. Capacitive coupling is expected to have the largest share in 2021. This is primarily attributed to the rising adoption of these products across consumer electronics and industrial automation. Increasing sale of consumer electronics and IoT devices drives the capacitive isolator market growth. According to the IoT Analytics Report 2021, IoT device adoption increased by 8% in 2021, reaching 12.2 billion active connections.
The use of inductive isolators in the industrial automation sector is growing at the highest CAGR over the forecast period due to increased equipment safety and high-speed data transfer requirements. Integrating inductive isolators in the consumer electronics sector is a driving trend in the market.
Rising Silicon Dioxide-based Isolator for the Protection of Robotics Products Drives Market Growth
The market includes polyimide-based, silicon dioxide (Sio2)-based, and others by insulating material. Silicon dioxide (Sio2)-based is expected to have the largest share in 2021. This is primarily attributed to the rising product adoption across the robotics industry. It is widely used in industrial robotics manufacturing to avoid current faults. This material is used in manufacturing the digital isolators offered by key players, including Texas Instruments and Analog Devices Inc.
The polyimide-based segment is expected to grow with the highest CAGR during the forecast period. This segmental growth is propelled owing to its high performance, protection capabilities, and longer life than other materials.
Rising Adoption and Consumer Spending on Connected Devices Aids the Market Growth
The market scope includes up to 25 Mbps, 25 – 75 Mbps, and above 75 Mbps based on data rate. The 25 – 75 Mbps segment is projected to hold the largest market share due to rising adoption across small-sized connected device applications. Increasing disposable income and consumer spending on adopting advanced technology-connected devices drive the market growth. Consumer spending on connected IoT devices reached USD 749 billion and is expected to reach USD 1 trillion by 2022.
The above 75 Mbps segment is expected to grow with the highest CAGR during the forecast period. This is primarily owing to the rising demand for high-speed data transfer devices during the COVID-19 pandemic. The manufacturers have increased the production of isolation products that transfer high-speed data rates above 75 Mbps.
Rising Dual Channel Isolation Products Production by Leading Players Aids the Market Growth
The market scope includes channel 2, channel 4, channel 6, channel 8, and others (channel 3, channel 1) based on channel type.
Channel 2 is expected to have the largest market share in 2021 owing to the leading players' rising developments for dual-channel isolators. Manufacturers of different consumer electronics and heavy machinery are opting for safety standards for their machines. Dual channels have low cost, are readily available for machine components requirements, and decrease the load downtime.
Others segment is growing with the highest CAGR during the forecast period owing to rising adoption across high-end applications such as data center and telecom equipment manufacturing.
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Rising Electric Automotive Sale with Government Initiatives for Leading Players Aids the Market Growth
The market scope includes medical devices, automotive, IT and telecommunications, aerospace & defense, consumer electronics, energy & power, and others based on industry vertical.
Automotive held the largest market share in 2021 owing to the rising sale of electric vehicles. It is widely used to manufacture the electronic components of electric cars. The automobile manufacturers have planned to launch several types of electric vehicles, such as Plug-In Hybrid Electric Vehicles (PHEVs), Battery Electric Vehicles (BEVs), and Fuel Cell-based Hybrid Electric Vehicles (FHEVs).
Medical devices segment is growing with the highest CAGR during the forecast period. This is primarily owing to the rising demand for advanced medical equipment such as electronic health control units, imaging, and X-ray systems. These are used in the electronic control units to deliver high system performance for demanding electrical environments.
Asia Pacific Digital Isolator Market Size, 2021 (USD Million)
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Geographically, the market for digital isolator is studied across Asia Pacific, North America, the Middle East & Africa, Europe, and South America. They are further classified into countries.
Asia Pacific is anticipated to account for the largest market share in the global market during the forecast period, owing to the presence of manufacturers of isolator products. ROHM Semiconductor, Advantech, Murata Manufacturing, and MORNSUN Guangzhou Science and Technology Firm are some of the major market players that have their headquarters in this region. Also, this area comprises several small and medium vital players that provide low-cost isolation products for the consumer electronics industry.
China and India are growing fast in terms of the development of the market in Asia Pacific. Asia Pacific has witnessed strong demand from EV manufacturers, primarily from South Korea, China, and Japan. The region has made a significant contribution to manufacturing electric automobiles.
North America is projected to grow with a moderate CAGR during the forecast period. This is owing to the rising demand for noise-free electronics and investment across the data centers and telecommunication sector. The U.S. comprises more than 2,670 data centers as of 2021, approximately 40% of the globe's data centers. These isolators are used in data center equipment manufacturing to avoid current and voltage breakdown and smooth data transfer rates.
Europe is expected to grow with moderate CAGR due to rising demand across France, Germany, the U.K., and Italy. In Europe, these countries are rapidly adopting advanced technologies-based connected devices. According to the Center of Promotion Import Report in 2021, IoT spending in European countries is increasing rapidly, reaching USD 184 billion in 2021. It is expected to grow by double-digit by 2025. Such an increase in IoT spending is the key driving factor for the Europe market growth.
South America, which includes countries, such as Argentina, Brazil, and others, is expected to grow with moderate CAGR during the forecast period. Increasing government initiatives and investment in consumer electronics and electric vehicle manufacturing drive market growth.
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The Middle East & Africa had the lowest share in 2021 due to fewer manufacturers of these products. However, Turkey, South Africa, Israel, and other Gulf Countries are growing fast during the forecast period.
Crucial Players in the Market are Expanding their Operations by Presenting Advanced Isolators
The global market is consolidated with leading players such as Texas Instruments, Inc., Analog Devices, Inc., Skyworks Solutions, Inc., Renesas Electronics Corporation, Broadcom, Inc., and others. These key players in the market are investing in expanding their production activities by adopting several strategies such as acquisitions, partnerships, product launches, mergers, and collaborations. For instance,
An Infographic Representation of Digital Isolator Market
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The research report offers qualitative and quantitative insights into the market and a detailed analysis of the size & growth rate for all possible segments in the market. It also elaborates on market research, dynamics, emerging trends, and the competitive landscape. Key insights offered in the report are the adoption of automation by individual segments, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.
Value (USD billion)
By Technology, Insulating Material, Data Rate, Channel Type, Industry Vertical, and Region
By Insulating Material
By Data Rate
By Channel Type
By Industry Vertical
The global market is predicted to reach USD 3.88 billion by 2029.
In 2021, the market value stood at USD 2.12 billion.
The market is projected to grow at a CAGR of 8.3% during the forecast period (2022-2029).
The polyimide-based isolator segment is expected to show the highest CAGR during the forecast period.
Asia Pacific dominated the market owing to rising investment in consumer electronics and the presence of automotive manufacturers.
By industry vertical, the automotive segment leads the market owing to the growing adoption of isolators in manufacturing electric vehicles.
High cost associated with manufacturing digital isolators for consumer electronics and industrial automation products is restraining the market growth.
Increased adoption of connected and IoT devices around the globe aids market growth.
Some of the top players in the market are Texas Instruments, Inc., Analog Devices, Inc. Skyworks Solutions, Inc., Broadcom Inc., Infineon Technologies, and others.
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