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SE Asian manufacturers’ digital transformation investment-$301.6B by 2028

Digital transformation investment in Industry 4.0 solutions by Southeast Asian manufacturers is expected to grow steadily to reach US$301.6 billion in 2028, marking a 32.9% CAGR, according to global technology intelligence firm ABI Research. With most Southeast Asian manufacturers still in the early stages of digital transformation, this growth in spending will significantly improve the efficiency and impact of manufacturing in the region, with the share of manufacturing factories that have implemented smart solutions growing from 6.3% currently to 32.8% by 2028 (representing an average year-on-year growth of 31.6%).

“Thailand, Malaysia, and Singapore are currently leading the way for digital transformation among manufacturers and are expected to continue for the next five years. Successful implementations and demonstrations of improved efficiency and Operational Cost Savings (OCS) because of these deployments will catalyze greater digital implementation in the manufacturing sector across the Southeast Asian region,” explains Benjamin Chan, a Research Analyst at ABI Research. “This represents an attractive opportunity for key industry players, such as System Integrators (SIs) and technology vendors, which are keen to tap into the growing interest in smart manufacturing solutions in the region.”

Industry 4.0 solutions in today’s manufacturing sector integrate and implement a significant network of interconnected solutions and systems, such as Industrial Internet of Things (IIoT), low-latency 5G-enabled monitoring devices, Artificial Intelligence (AI) and Machine Learning (ML) modules, and other solutions that include but are not limited to data analytics, robotics, and worker enablement. With the growing appetite for AI-based solutions and data analytics in manufacturing processes, implementing effective solutions directly targeted at identified operational pain points will be a key driver to incentivize smart solution spending. By capitalizing on various analytical outcomes based on data, manufacturers can leverage a wide range of Industry 4.0 solutions that exponentially increase productivity and OCS. Some successful case examples include Smart Automation Manufacturing with Mitsubishi Electric in its e-F@ctory Thailand facilities.

Additionally, technology solutions providers like Groundup.AI have demonstrated adaptability by providing retrofitted AI-powered sound sensors in traditional manufacturing equipment used in Singapore, Malaysia, and Vietnam. This proves that the Southeast Asian market can be untapped for innovators looking to introduce disruptive technologies into the manufacturing sector.

“The general digital maturity of the Southeast Asian manufacturing industry, while improving, is still comparatively low,” says Chan. “However, even though digital transformation has yet to become prevalent in Southeast Asia, enterprises and businesses will overcome the inertia as more innovators and innovative companies lead the way in unlocking demand for smart manufacturing. If they do not, manufacturers in North-East Asia and the USA will leave them in their wake.” ABI Research

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