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The global digital shipyard market size was USD 963.6 million in 2020. The market size is projected to grow from USD 1,129.6 million in 2021 to USD 3,444.5 million by 2028 at a CAGR of 17.27% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market had shown a decline of -9.50% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The adoption of industry 4.0 capabilities in designing, manufacturing, and maintaining marine vessels is known as digital shipyard. The shipyards use capabilities such as Internet of Things (IoT) and Cyber-Physical Systems (CPS) to upgrade the shipyards for a technologically advanced world. Systems such as 3D modelling, 3D scanning, 3D printing, digital twins, and others are utilized in digitalization of a shipyard. Rising demand for modernization in shipbuilding is expected to propel the growth of this market.
COVID-19 Pandemic had Adverse Effect on Shipping and Shipbuilding Industry
The COVID-19 pandemic, which has hit in 2020, caused losses in a number of businesses, including the marine industry. Shipyards, shipbuilding companies, and tier 2 and tier 3 suppliers were forced to adjust their working methods in order to comply with government laws and prohibitions, which resulted in the suspension of shipbuilding operations.
Furthermore, due to the decreased demand for marine transport and trade, new ship orders have been cancelled. Cruise ships are the most profitable section of shipbuilding for European shipyards. However, due a drop in sea passenger travel during the COVID-19 outbreak, cruise ships were tied and moored, causing cruise deliveries to be delayed and orders to be cancelled in a few cases.
Because of the decline in manufacturing operations, the pandemic halted the digitalization of shipyards.
This accident, on the other hand, is expected to be a digitalization catalyst, resulting in increased potential for advanced automated technologies in the shipbuilding industry. The demand for shipbuilding automation has surged in response to the labor shortage that arose during the pandemic.
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Increasing Demand for Additive Manufacturing is a Prominent Trend
Additive manufacturing also known as 3D printing can print the 3D digitally model in very less time. Recent technological advances in 3D printers have enabled printing larger components as well. The material of 3D printing is not limited to plastic anymore. The advanced printer systems can also create parts from metal, using a technique of high-velocity particle fusion. The adoption of additive manufacturing on shipyards can reduce system repair time as one can print and replace the damaged part.
Increased Industrial Internet of Things (IIoT) Use in Shipbuilding to Boost Growth
By merging the IoT's communication capabilities with machine learning and big data, the digital shipyard leverages the IIoT to improve its decision-making skills and manufacturing processes. The market is expected to rise due to the increasing usage of IIoT in the shipbuilding industry to boost output, minimize downtime, and improve operational efficiency.
In December 2019, Navantia, a European shipyard, chose Siemens Digital Industries Software as its technological partner to digitalize its shipbuilding process
Rising Implementation of Robot Technology in Shipbuilding Industry to Fuel Market Growth
Shipbuilding companies worldwide are focusing on automation of manufacturing operations such as cutting, welding, painting, assembly, and others to speed up the process and save cost. Several key players such as Hyundai Heavy Industries, Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering have implemented welding robots to reduce the production cost of the ship.
High Working Capital for Hardware and Software May Hamper Growth of Market
The early stage of automating a manufacturing plant includes procurement, accessories, programming, integration, and others. The huge capital expenditure at the beginning stage can be challenging for some businesses. The price of the industrial system, along with integration cost and maintenance cost makes the automation an expensive investment for small and medium sized shipbuilders. Many small and medium-scale shipbuilders find it tough to gather huge funds due to the low production volume and sluggish return on investment.
Moreover, the software cost is also high, which is anticipated to restrain the digital shipyard market growth.
Commercial Segment to Dominate the Market Owing to Increasing Maritime Trade
Based on shipyard type, the market is segmented into commercial and military. The commercial segment is predicted to be the largest segment in 2020 and is expected to be the fastest-growing segment throughout the forecast period. The growth is attributed to the rise in seaborne trade across the globe. As stated by the United Nations Conference on Trade and Development (UNCTAD), around 80% of the global trade by volume is carried out by sea, which increases ship procurement thus increasing the demand for digitalizing shipyards to speed up the manufacturing process.
The military segment is expected to grow significantly during the forecast period due to rising investment from the government of several countries for developing and implementing digital twin in defense technologies.
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Robotic Process Automation Category to Dominate the Market Due To Increased Demand for Automation.
The market is divided into robotic process automation, additive manufacturing, artificial intelligence and big data analytics, digital twin, blockchain, industrial Internet of Things (IIOT), and other categories based on technology platforms. Due to increased need for automation of many ship manufacturing processes including as welding, cutting, painting, and others, the robotic process automation segment is expected to dominate the market in 2020.
Due to the rising usage of artificial intelligence in robotic technology to automate the production process without human interference, the artificial intelligence segment is predicted to grow at a faster CAGR over the forecast period.
Fully Digital Shipyard Segment to Record High CAGR Led by Increased Adoption of Advanced Technologies
The market is categorized into semi and fully digital shipyards based on their level of digitalization. In 2020, the semi-digital shipyard is expected to be the largest segment. The dominance can be linked to shipbuilding businesses' growing awareness of the need to update their manufacturing processes. Due to the increased use of IIOT, augmented reality, digital twins, and other sophisticated technologies for marine vessel building, the fully digital shipyard is predicted to be the fastest expanding market over the projection period.
Asia Pacific Digital Shipyard Market Size, 2020 (USD Million)
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The global market is segmented based on region into North America, Europe, Asia Pacific, The Middle East & Africa, and South America.
With a market size of USD 323.3 million in 2020, Asia Pacific is expected to have the largest market share and grow at a faster compound annual growth rate during the projected period. Major shipbuilders like as Daewoo Shipbuilding, Marine Engineering, and China Shipbuilding Industry Corporation, among others, are responsible for the region's dominance in the digital shipbuilding sector.
According to a published report, 90 percent of global cargo ships are produced in South Korea, Japan, and China. As a result, the existence of shipbuilding enterprises in the region aids in the digitalization of shipyards.
The market in Europe is expected to develop significantly as European shipbuilders increase their investments in automated robotic technology for industrial operations.
The North America segment is expected to grow due to increased research and development initiatives for digitization of shipyards by key companies such as Altair Engineering Inc. and others.
Market Players Are Using Strategies Such as Investment, Collaboration, Partnerships, and Others to Increase Their Market Potential
Companies are concentrating on the automation of the manufacturing process over the last few years. Several companies are taking initiatives to adopt digitization in shipbuilding. There has been a rise in investments in the modernization of capabilities to increase efficiency and decrease costs. Players such as SAP and Accenture are collaborating to develop a new SAP cloud utility solution that will assist shipbuilding businesses to manage customer experiences and business processes efficiently. Market players are making R&D investments to design advanced robotic technology based on AI, IoT, and Augmented Reality (AR).
An Infographic Representation of Digital Shipyard Market
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The market research report provides a detailed analysis of the industry and focuses on key aspects, such as key players, shipyard types, technology platform, and digitalization Level of digital shipyards. Moreover, the research report offers insights on digital shipyard market trends, competitive landscape, market competition, product pricing, market status, and highlights key industry developments. In addition to the major factors mentioned above, it encompasses several direct and indirect factors that have contributed to the sizing of the global market over recent years.
Value (USD Million)
Shipyard Type, Technology Platform, Digitalization Level and Geography
By Shipyard Type
By Technology Platform
By Digitalization Level
Fortune Business Insights says that the global market size was USD 963.6 million in 2020 and is projected to reach USD 3,444.5 million by 2028.
Registering a CAGR of 17.27%, the market will exhibit steady growth in the forecast period (2021-2028).
The robotic process automation segment is expected to lead this market during the forecast period.
Dassault Systemes is the leading player in the global market.
Asia Pacific dominated the market in terms of share in 2020.
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