Functional safety refers to the design of safety-related control systems in industries like automotive, medical, and manufacturing. Functional safety products and systems ensure high reliability and prevents failures that can cause accidents resulting in loss of life, injury, or environmental damage. Functional safety focuses on the ability of the system to detect and react to failure in a well-defined manner. With rapid globalization and rising automation levels in industries, functional safety has become increasingly important to prevent catastrophic failures.
The automotive industry is undergoing massive digital transformation with advanced driver-assistance systems, autonomous driving technologies, connected vehicles, and mobility services. However, such increasing vehicle automation and connectivity also raises serious functional safety concerns. Automakers are legally bound to ensure that the extensive software and electronic systems integrated in modern vehicles do not cause any unintended behavior or accidents. This is driving the demand for safety engineering processes and functional safety components that can detect defects or systematic faults and take corrective actions. Standards like ISO 26262 for road vehicles are also mandating rigorous risk assessment and management for automotive electronics.
The global Functional Safety Market is estimated to be valued at US$ 5767.57 Mn in 2023 and is expected to exhibit a CAGR of 5.3% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the major trends in the functional safety market is the increasing adoption of safety instrumentation systems (SIS). SIS are specialized control systems used in process industries and nuclear power plants to ensure safe and secure operation of critical processes like emergency shutdown. With aging infrastructure and rising complexity of process plants, SIS deployments are increasing significantly. SIS offer a wide range of instrumentation and intelligent sensors to monitor plant conditions closely and facilitate foolproof isolation or trip of unsafe processes. The growing popularity of SIS is expected to drive revenues for safety component manufacturers in the forecast period.
Threat of new entrants: The threat of new entrants is moderate as the functional safety market requires high R&D investments and certification. However, partnerships and acquisitions can help new players enter the market.
Bargaining power of buyers: The bargaining power of buyers is high as functional safety solutions are available from numerous global and regional players. Buyers can negotiate on price and demand additional services.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as key raw materials such as initiators, catalysts and engineered plastics used in functional safety have few substitutes. Suppliers have some control over pricing.
Threat of new substitutes: The threat of substitutes is low as functional safety solutions are specialized and required across industries for critical applications. Alternatives can comply but not completely replace functional safety needs.
Competitive rivalry: The competition is high among global players to gain market share through product innovation, partnerships and geographical expansion.
The Global Functional Safety Market Size is expected to witness high growth over the forecast period supported by increasing safety requirements across industries. The market size is projected to reach US$ 5767.57 Mn by 2024 with a CAGR of 5.3% during the forecast period.
Regional analysis: North America dominates the functional safety market currently owing to stringent regulatory standards and early adoption. Asia Pacific is expected to grow at the fastest pace due to the expansion of manufacturing industry and increasing investments in process automation.
Key players: Key players operating in the functional safety market are DowDuPont, Inc., Lanxess AG, United Initiators, Ansin Chemical Co Ltd., Shangyu Jie Hua Chemical Co., Ltd. Merck KGaA, and Lonza. Players are focusing on new product launches, partnerships and geographical expansion to gain market share.