An optical encoder is an electromechanical device which produces electrical output and is proportionate to the angular state of the input shaft. The optical encoder operates on the principle of optics which converts angular displacementor mechanical rotary motion of an input shaft into a digital signal. A light source from an infra-red or LED is passed through a rotating high-resolution code disk or encoded disk which contains a binary code or grey code. Photo sensors, which could be a phototransistor, photovoltaic cell, or silicon photodiode on the other side of the disc scans the rotating encoded disk and generates the output electric signal. The output signal from the photo sensors is a series of voltage pulses since the light from infra-red or LED source is interrupted by opaque areas of the encoder disc. Incremental encoders and absolute encoders are two basic types of optical encoders. Incremental encoder also known as relative rotary encoder produces the square wave pulses output signal. On the other hand, absolute encoders produce the unique output code for every rotating position of the input shaft and are more complex than incremental encoders. Optical encoders are usually used to monitor and control motion parameters including position, distance, direction, rate, and speed

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Growing adoption of advanced motion control systems and increased demand for excellent assertion in Surface Mount Technology (SMT) placement processes are primary factors driving the global optical encoder market. Over the last few years, use of advanced automation equipment and control systems have increased substantially owing to its provision of real time data, better accuracy, and increased productivity. Use of industrial optical encoders has grown in advanced automation equipment for monitoring the movement of various objects within a facility.  Also, rising demand from machine controls, robotics, medical diagnostics, and elevators are expected to boost the market over the forecast period. However, delicate parts involved and complex construction of encoders is likely to be limiting factors for market growth in the coming years.

The market is segmented on the basis of configuration, output signal, industry vertical, and region. On the basis of configuration, the optical encoders market is subdivided into incremental, single turn, multi-turn and others. By output signal, the market is classified as analog optical encoders and digital optical encoders. Due to advantages such as higher accuracy, better resolution, improved system reliability, and reduction in system cost provided by digital optical encoders, the segment is projected to show significant CAGR over the forecast period. On the basis of industry vertical, the market is segmented into IT &telecommunication, manufacturing, space and aviation, automobile, healthcare, consumer electronics and others. Telecommunication and IT industry is expected to witness significant adoption of optical encoders and is likely to hold substantial revenues share.

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