Digital Twin Market Analysis | 2023-2028

Market Insights

The digital twin market was estimated at USD 10.36 billion in 2022 and is likely to grow at a CAGR of 44.01% during 2023-2028 to reach USD 92.44 billion in 2028.

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Market Dynamics

Introduction

A digital twin refers to a replica or a digital avatar of a living or non-living physical object. It serves as a proxy for the current condition of anything it represents. This helps in attaining real-time data with which one can see the current progress or bottlenecks and plan ways to resolve or improve them. When a twin of a physical product is created and displayed digitally, smart sensors are used to collect and create real-time representation from the real product to the digital twin. This transferred data not only replicates the physical product but also mimics its behavior.

COVID-19 IMPACT

The COVID-19 pandemic has positively impacted the global digital twin market. During the pandemic, major manufacturers used a variety of strategies to increase their market share in the broader marketplace, including product launches, product improvements, and R&D spending.

Market Drivers

The digital twin market is driven by several factors, one of which is the increased demand for predictive maintenance and asset optimization solutions across industries. Below are a few more drivers:

• The increasing adoption of IoT and cloud technologies is a significant driver of digital twin market growth. IoT sensors enable real-time data collection from physical assets, while cloud platforms offer scalable storage and processing capabilities essential for creating and managing digital replicas. Integrating IoT platforms with software that complies with digital twin standards allows for real-time, two-way communication, improving monitoring and support capabilities, as highlighted by the National Institute of Standards and Technology (NIST).
• Increased demand for predictive maintenance: Digital twins are used to monitor and predict the performance of assets in different industries. This helps to prevent unplanned downtime and reduce maintenance costs. According to General Electric Power (GE), leveraging digital twin solutions can help reduce reactive maintenance in less than 1 year by 40%, reduce time to achieve outcomes by 75%, and save up to $11 million by detecting and preventing failures.
• The adoption of Industry 4.0 and smart manufacturing is significantly accelerating the adoption of digital twin technologies. According to the National Institute of Standards and Technology (NIST), pursuing Industry 4.0 contributes approximately 4–5% to the forecasted cumulative growth in digital twin adoption from 2022 to 2027.
• Regulatory compliance requirements: In some industries, there are regulatory requirements that mandate the use of digital twins. For example, in the healthcare industry, digital twins can be used to simulate the performance of medical devices, which can help to ensure that they meet safety standards. The FDA approved the use of digital twins to simulate the performance of a new medical device, which helped to speed up the approval process.
• Growing Adoption in Multiple Industries: Owing to its benefits, digital twin technology has found applications across various industries, including manufacturing, healthcare, automotive, aerospace, energy, infrastructure, etc. This widespread adoption is driving market growth as more organizations recognize the benefits of digital twins in improving their operations, optimizing asset performance, and delivering better customer experiences.

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Challenges

High Implementation Costs: Developing and deploying digital twins requires significant investment in sensors, connectivity, software platforms, and skilled personnel—posing a barrier for small and medium enterprises.

Data Security and Privacy Concerns: Digital twins depend on vast amounts of real-time data, making them vulnerable to cyberattacks, unauthorized access, and data breaches, especially in critical infrastructure sectors.

Segment Analysis

By Industry Type

The digital twin market is segmented as aerospace & defense, automotive & transportation, home & commercial, healthcare, energy & utilities, oil & gas, and others. The automotive & transportation segment leads the market owing to its usage for designing, production, simulation, maintenance, repair, overhaul, and after-service. In 2022, the automotive and transportation segments will account for more than 15% of the market. The automotive & transportation industry has adopted this technology for a long time which is also a major reason for the dominance of this segment.

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By Digital Twin Type

The market is segmented as product digital twin, process digital twin, and system digital twin. The process segment is expected to grow at the fastest rate, with a CAGR of more than 35% in 2022.

The system digital twin segment is expected to remain dominant during the next five years due to increasing demand for digital systems in various industries, as the system digital twin is a combination of both, product and process, and either of the tasks can be performed by system type.

Regional Insights

North America is estimated to be the largest market, whereas Asia-Pacific is estimated to be the fastest-growing market with a CAGR of more than 40% in 2022, owing to the highly developed infrastructure in North America and the presence of a large number of digital twin providers in the region. The USA is not only a major country in North America but also in the world. China and India are the growth engines of the Asia-Pacific region.

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Key Players

Some of the major digital twin manufacturers are:

• Ansys
• General Electric
• IBM
• Microsoft Corporation
• Oracle
• PTC
• Robert Bosch
• SAP
• Siemens AG
• SWIM AI Alubond U.S.A.

Note: The above list does not necessarily include all the top players in the market.

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Recent News & Developments

AUG 24: Collaboration of LG Innotek and Ansys for the Adaptation of ‘Digital Twin’ - Recently, LG Innotek, a leading manufacturer of various electronic parts, and Ansys, known as the leading engineering simulation company in the world, signed a business partnership for expanding the use of ‘Digital Twin’ technology.

MAR 24: Mumbai’s digital twin: BMC finally signs a deal for Rs 155 crore to develop a 3D model of the city.

FEB 24: India Government launches 'Sangam: the so-called ‘Digital Twin’ approach for future infrastructure planning and design - The ‘Digital Twin’ technology provides a response in the form of a virtual rendition of physical assets for monitoring, experimenting or simulating in real-time with feedback loops for updated execution to optimize results.

FEB 24: Capgemini acquires Unity’s Digital Twin Professional Services to enhance enterprises’ digital transformation through real-time 3D technology

In June 2023, Helixx selected Siemens digital-twin software to develop commercial EV manufacturing hubs. By utilizing Siemens's digital twin technologies, Helixx can integrate digital threads into its business model, reducing development costs and complexity by 20%.

In June 2023, SoftServe and Valeo teamed up with the help of Digital Twin with NVIDIA Omniverse to improve product design in the automotive sector. Through the use of computer models of Valeo’s lighting products, it becomes easier to customize products and gain client feedback in a shorter time thus cutting on the development time.

Research Methodology

This strategic assessment report, from Stratview Research, provides a comprehensive analysis that reflects today’s digital twin market realities and future market possibilities for the forecast period of 2023 to 2028. After a continuous interest in our digital twin market report from the industry stakeholders, we have tried to further accentuate our research scope to the digital twin market to provide the most crystal-clear picture of the market. The report segments and analyses the market in the most detailed manner to provide a panoramic view of the market. The vital data/information provided in the report can play a crucial role for the market participants as well as investors in the identification of the low-hanging fruits available in the market as well as to formulate the growth strategies to expedite their growth process.

This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools. More than 1000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data. We conducted more than 15 detailed primary interviews with the market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.

Report Features

This report provides market intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into market dynamics and will enable strategic decision-making for existing market players as well as those willing to enter the market. The following are the key features of the report:

• Market structure: Overview, industry life cycle analysis, supply chain analysis.
• Market environment analysis: Growth drivers and constraints, Porter’s five forces analysis, SWOT analysis.
• Market trend and forecast analysis.
• Market segment trend and forecast.
• Competitive landscape and dynamics: Market share, Service portfolio, New Product Launches, etc.
• COVID-19 impact and its recovery curve
• Attractive market segments and associated growth opportunities.
• Emerging trends.
• Strategic growth opportunities for the existing and new players.
• Key success factors.

Market Segmentation

This report studies the market, covering a period of 12 years of trends and forecasts. The report provides detailed insights into the market dynamics to enable informed business decision-making and growth strategy formulation based on the opportunities present in the market.

The digital twin market is segmented into the following categories:

By Technology Type

• IoT & IIot,
• Blockchain,
• Artificial Intelligence, and Machine Learning,
• Augmented Reality,
• Virtual Reality, and Mixed Reality
• Big Data Analytics
• 5G

By Digital Twin Type

• Product Digital Twin
• Process Digital Twin
• System Digital Twin

By Industry Type

• Aerospace & Defense,
• Automotive & Transportation
• Home & Commercial
• Healthcare
• Energy & Utilities
• Oil & Gas
• Others

By Region

• North America (Country Analysis: the USA, Canada, and Mexico)
• Europe (Country Analysis: Germany, France, the UK, Russia, Spain, and Rest of Europe)
• Asia-Pacific (Country Analysis: China, Japan, India, South Korea, and Rest of Asia-Pacific)
• Rest of the World (Sub-Region Analysis: Latin America, the Middle East, and Others)

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Report Customization Options

With this detailed report, Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to 3 players)
• SWOT analysis of key players (up to 3 players)

Market Segmentation

• Current market segmentation of any one of the technology types by industry type.

Competitive Benchmarking

• Benchmarking of key players on the following parameters: Product portfolio, geographical reach, regional presence, and strategic alliances.

Custom Research: Stratview Research offers custom research services across sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry to sales@stratviewresearch.com.