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The global computer-aided engineering (CAE) market is experiencing significant growth, fueled by technological advancements and an increasing shift towards digitalization across various industries. In 2023, the CAE market was valued at USD 10,175.4 million, and projections indicate a compound annual growth rate (CAGR) of 12.8% from 2024 to 2030. This rapid expansion is attributed to the outsourcing of manufacturing processes to emerging economies such as China, India, and Russia, as well as the growing demand for efficient product development processes that CAE solutions facilitate.
The Rise of CAD and CAE
Computer-Aided Design (CAD) emerged as a powerful tool in the late 20th century, enabling engineers and designers to create detailed 2D and 3D models of products and structures. CAD software allowed for precise geometric modeling, enabling engineers to visualize and refine their designs in a digital environment. This shift from manual drafting to digital modeling marked the beginning of a new era in engineering.
In today’s world, engineering plays a part in almost everything that surrounds us, and with innovations continuously being brought to market, engineering is experiencing a steady growth extending to all of its wide-ranging facets. Computer-aided engineering (CAE) is the broad usage of computer software to aid in engineering analysis tasks. Building on the foundation laid by CAD, Computer-Aided Engineering (CAE) introduced advanced analytical capabilities to the design process. CAE tools enabled engineers to simulate and analyze the behavior of their designs under various conditions, such as stress, heat, and fluid dynamics. This ability to virtually test and validate designs before physical prototyping significantly reduced development time and costs. Simply put, you can create 2D and 3D objects using CAD, while you can analyze how that object will behave using CAE tools. The automated design tools provided by CAE have transformed engineering analysis from a ‘hands-on’ experience to virtual simulation.
CAE Market
The global computer-aided engineering (CAE) market, valued at USD 8.0 billion in 2023, is projected to grow to USD 8.91 billion in 2024 and reach USD 21.60 billion by 2032, with a compound annual growth rate (CAGR) of 11.7% during the forecast period (2024-2032). CAE refers to the use of computer software to simulate performance, optimize product designs, and solve technical problems across various industries. This technology includes validation, simulation, and optimization of products, processes, and manufacturing tools. By integrating these software solutions, companies can reduce the need for multiple prototypes and product recalls, thereby significantly lowering associated costs.
Key Drivers of Market Growth
One of the primary drivers of the CAE market is the integration of software solutions that reduce the need for multiple prototypes and alleviate concerns about product recalls. By simulating and optimizing designs before physical prototypes are created, businesses can significantly reduce costs and accelerate time-to-market. Additionally, the use of Computational Fluid Dynamics (CFD) software to analyze temperature in battery modules and enhance battery life and performance is expected to further drive market growth.
The growing trend of customers quantifying their software contributions has led companies to embrace higher licensing fees for software that enhances low-value processes. This shift has prompted the development of alternative pricing and delivery models, similar to Software as a Service (SaaS), allowing customers to opt for pay-as-you-go subscriptions. However, these new pricing models are anticipated to impact software providers’ revenue recognition, cash flow, and financials, particularly through the use of reference architectures and the ability to place data views atop business processes. These architectures are essential for modeling information, especially in product and manufacturing contexts.
Emerging Trends in the CAE Market
The market is also witnessing a shift from on-premise computing to cloud-based computing. Cloud-based CAE solutions offer numerous advantages, including reduced costs related to hardware acquisition, software licensing, and maintenance. Furthermore, companies are increasingly adopting Hyper-Converged Infrastructure (HCI) platforms to build private clouds, enabling advanced computation and storage services that enhance CAE capabilities.
The adoption of hyper-converged infrastructure (HCI) platforms to establish private clouds offering advanced storage and computation services is expected to drive market growth. Additionally, the rising use of computational fluid dynamics (CFD) software for evaluating temperature, performance, and extending battery life in battery units is projected to boost the market. The increasing adoption of CFD, which helps reduce the charging time of electric vehicles, is anticipated to create lucrative growth opportunities from 2024 to 2032.
A notable trend in the CAE market is the shift towards flexible pricing models, such as Software as a Service (SaaS). This approach allows customers to opt for pay-as-you-go subscription plans, which are increasingly popular among businesses looking to manage costs more effectively. However, this shift in pricing models poses challenges for software providers in terms of cash flow, revenue recognition, and financial planning.
The market for value-added resellers (VARs) is also expected to experience significant growth. VARs play a crucial role in bridging the gap between end-users and suppliers, offering certifications and training that enhance their credibility and drive market expansion.
Rising Adoption in Aircraft Design to Drive Demand
The increasing sales and production of energy-efficient aircraft and the expansion of commercial aviation are expected to create substantial demand for CAE solutions during the forecast period. According to the Federal Aviation Administration, there will be approximately 34,000 civil airplanes worldwide by 2036. Additionally, Deloitte reported that China’s commercial aircraft production reached around 1,900 units in 2020, an increase of 1,450 units from 2019.
CAE solutions are instrumental in designing electric battery-driven airplane engines and low-emission planes with solar panels on their wings. These solutions have been used to create cutting-edge passenger aircraft and environmentally friendly next-generation designs. For instance, the structural deformation of the A350’s wings, designed using CAE, occurs during high-altitude flight, with fuel consumption based on the aircraft’s weight as it balances the flaps to fine-tune its center of gravity. The A350 uses 25% less fuel than other commercial aircraft, reducing carbon emissions and the overall carbon footprint of passengers. Additionally, CAE simulations have improved engine fan performance, resulting in a 40% reduction in engine noise compared to equivalent aircraft engines, further supporting market growth.
Increased Adoption of IoT and 3D Printing to Fuel Growth
The rising use of digital technologies such as the Internet of Things (IoT), artificial intelligence (AI), machine learning (ML), automation, and cloud computing in product design enhances product quality and durability. To minimize product development time and costs, users are increasingly adopting CAE solutions, which is expected to drive market growth.
Emerging engineering methods like building information modeling (BIM), 3D printing, and concurrent engineering are influencing CAE trends. 3D printing, a form of additive manufacturing, allows users to print objects as 3D images, reducing production costs and enabling new production methods. The ease of use and unlimited customization capabilities are significant factors driving the 3D printing market, which is expected to positively impact CAE adoption.
3D printing is gaining traction across various industry verticals, including consumer electronics, aerospace & defense, automotive, and healthcare. In the healthcare sector, 3D printing has led to the development of more robust and customized surgical tools, medical devices, and lab equipment, such as eyeglasses, drug delivery devices, hearing aids, exoskeletons, and more. Additionally, additive manufacturing methods have improved patient-specific and prosthetic implants in dental and orthopedic surgeries, increasing the need for CAE solutions.
RESTRAINING FACTORS
High Installation Costs and Lack of Technical Expertise as Challenges
Open-source platforms, such as Linux, provide open-architecture software, while CAE software is readily available online. However, CAE solution providers charge high fees for support, customization, and maintenance services, which may drive users toward open-source alternatives, potentially restraining market growth. Additionally, a lack of technical expertise in deploying CAE software is projected to hinder market expansion.
Users often find that accurate results only appear later in the product design cycle, making it challenging to drive the design of more complex parts. Companies are continuously improving tools and processes to address this challenge. Other potential drawbacks of CAE include hardware failures leading to data loss, the need for staff training to operate the software, security risks such as viruses or hacking, regular system updates, and the high cost of new systems. These factors may limit CAE adoption and demand to some extent.
COMPUTER-AIDED ENGINEERING MARKET SEGMENTATION ANALYSIS
The CAE market is segmented into software and services. In 2023, the software segment held the largest market share, driven by its benefits such as data safety, reliability, and uninterrupted testing. Finite Element Analysis (FEA), a key software type, accounted for more than 51% of the market share and is anticipated to dominate the market during the forecast period. FEA is crucial for determining the strength of products under various loading conditions and is widely used in industries such as automotive, aerospace, and electronics.
The services segment is expected to register the highest CAGR over the forecast period, reflecting the growing awareness of virtually enabled processes for product development among companies and governments. Design and consulting, implementation, and maintenance services are gaining popularity, contributing to the overall growth of the CAE market.
By Deployment: Cloud Segment Leads Amid Rapid Digital Transformation
The market is segmented into cloud and on-premise deployments. The cloud segment dominates the market share and is expected to record the highest CAGR from 2024 to 2032. Cloud deployment offers faster distribution, cost reductions, lower maintenance, and enhanced scalability. Conversely, the on-premise segment held a notable market share in 2023, though the deployment model increases software implementation and upgrade costs.
By Type: Finite Element Analysis Segment to Dominate
The market is classified into finite element analysis (FEA), computational fluid dynamics (CFD), thermal analysis, multibody dynamics, and others. FEA is expected to dominate revenue share during 2024-2032 due to its capabilities, such as higher accuracy, easy access, and prevention of future failures, which are driving its adoption in critical structural engineering. Its ability to predict product performance is gaining traction across various industries.
Multibody dynamics are predicted to witness rapid growth over the forecast period, driven by the low cost of investment in analyzing virtual prototypes versus physical tests, which is expected to fuel the CAE market share.
Deployment Models and End-Use Applications
The CAE market is also segmented based on deployment models, including on-premise and cloud-based solutions. In 2023, the on-premise segment held a market share exceeding 63%, but cloud-based deployment is expected to grow rapidly due to its advantages in cost reduction, scalability, and ease of access.
By End-User: Automotive Segment to Lead Due to Rising Demand for Evaluating Real Modules
The market is segmented by end-user into automotive, medical devices, industrial equipment, defense & aerospace, electronics, and others. The automotive segment is expected to gain the largest share during 2024-2032 due to the increasing need to evaluate heat dissipation methods, such as ventilation, cooling, and aerodynamics, particularly in the Asia Pacific region. Countries like Brazil and Argentina are key automotive manufacturers, driving demand for CAE software.
In terms of end-use applications, the automotive industry held the largest market share in 2023, driven by the need for design optimization, safety compliance, and the transition to electric mobility. The defense and aerospace industries are also expected to experience substantial growth, with CAE software playing a critical role in structural analysis, CFD, and electromagnetic analysis.
The medical devices segment is expected to experience rapid growth, driven by increased government focus on healthcare systems, leading manufacturers to invest in CAE software for its ability to produce accurate products.
REGIONAL INSIGHTS
The market is divided into five key regions: North America, Europe, South America, Asia Pacific, and the Middle East & Africa. North America dominated the CAE market in 2023, with a market share of more than 33%. The region’s leadership is supported by increasing automation in the manufacturing sector, rising concerns about greenhouse gas emissions, and evolving battery technologies. The Asia-Pacific (APAC) region is expected to witness exponential growth, driven by government investments in manufacturing and renewable energy, as well as the automation of industrial equipment.
Europe: Europe accounted for the highest market share in 2023, driven by the presence of key market players and a robust automotive industry. The increasing number of developers of virtual vehicles and connected car providers investing in reliable engineering tools is expected to further fuel market growth.
Asia Pacific: The Asia Pacific region is expected to capture a significant market share during the forecast period, supported by increased government spending on manufacturing industry development and renewable energy production capacity. The region has shown a rebound in sales and manufacturing, driven by global demand for hardware and devices.
South America: Countries such as Argentina, Brazil, Chile, and Colombia are updating industrial policies to boost market revenue. The Agenda for Sustainable Development 2030 aims to promote sustainable industrial development, creating growth opportunities for the CAE market in the region.
Middle East & Africa: The growing productivity in the manufacturing industry across the Middle East and Africa is expected to create opportunities for CAE software providers. Manufacturing industries have become key economic indicators for MEA countries in recent years.
North America: Companies in North America, including ANSYS, Inc., Altair Engineering Inc., Dassault Systèmes, and Bentley Systems, Inc., are heavily invested in the digital revolution and are early adopters of next-generation technologies such as IoT, AI, automation, and cloud computing. The continued adoption of these technologies is driving the market in the region.
Competitive Landscape
Key players in the CAE market include Siemens Group, Rockwell Automation, Dassault Systèmes, and Hexagon AB. These companies are leading the charge in developing advanced CAE solutions that cater to various industries, including automotive, aerospace, electronics, and medical devices. Their continued focus on innovation and strategic partnerships will be critical in sustaining market growth.
The global computer-aided engineering (CAE) market is supported by a diverse range of key players, each contributing to advancements in simulation and engineering software. ESI Group (France) is a leader in virtual prototyping, offering solutions that help companies predict the performance of their products and processes. Siemens AG (Germany) is renowned for its comprehensive digitalization portfolio, which includes advanced CAE tools integrated within its PLM (Product Lifecycle Management) software suite. Hexagon AB (Sweden) stands out for its smart digital reality solutions that combine CAE with metrology and geospatial tools to optimize industrial operations.
The Aveva Group (U.K.) specializes in industrial software, bridging the gap between CAE and operational technology, especially in industries such as energy and manufacturing. SimScale (Germany) offers a cloud-based CAE platform, democratizing access to simulation technology by making it more affordable and user-friendly. ANSYS, Inc. (U.S.) remains a heavyweight in the industry, known for its extensive simulation capabilities that span multiple disciplines, including structural mechanics, fluid dynamics, and electromagnetics.
Altair Engineering Inc. (U.S.) is another major player, focusing on high-performance computing and data analytics to enhance CAE processes. Autodesk, Inc. (Germany) is well-known for its design software, which includes robust CAE tools that integrate seamlessly with its CAD offerings, catering to industries ranging from architecture to manufacturing. Bentley Systems, Inc. (U.S.) provides comprehensive solutions for infrastructure engineering, where CAE plays a critical role in ensuring the safety and efficiency of large-scale projects.
Lastly, Dassault Systèmes (U.S.) is a global innovator with its 3DEXPERIENCE platform, which combines CAE with other digital tools to create a cohesive environment for product development and lifecycle management. Together, these companies are at the forefront of driving innovation and growth in the CAE market.
The global CAE market features a vibrant startup ecosystem, with over 100 startups anticipated to develop and innovate CAE solutions. This competitive landscape requires established companies to continuously update and implement new advances in their product offerings.
KEY INDUSTRY DEVELOPMENTS:
- May 2023: Velo3D partnered with PhysicsX to provide customers with access to PhysicsX’s AI-driven physics simulation workflows, accelerating the development of 3D printing parts for advanced projects.
- January 2023: ANSYS announced a new course at Arizona State University as part of its continued expansion of academic collaboration, focusing on educating students about advanced semiconductor fabrication.
Conclusion
The global computer-aided engineering market is poised for unprecedented growth, driven by technological advancements, digital transformation initiatives, and the increasing demand for efficient product development processes. As industries continue to embrace CAE solutions, the market is expected to evolve, offering new opportunities for innovation and growth. The shift towards cloud-based deployment, flexible pricing models, and the rise of value-added resellers will further shape the future of the CAE market, making it a critical component of the global industrial landscape.
References and Resources also include:
https://www.fortunebusinessinsights.com/computer-aided-engineering-market-106891
https://www.grandviewresearch.com/industry-analysis/computer-aided-engineering-cae-market
