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Market Overview

The functioanl safety market is expected to register a CAGR of over 8% over the forecast period (2020 - 2025). Functional Safety is applicable to all industries today and is increasingly in demand as manufacturers and end-users look to mitigate risk further.

  • With the growing use of automated equipment for manufacturing, test, and process control, the need to avoid equipment damage, injuries, and environmental damage is more critical than ever. Growing demands and expectations from governments and workers have led manufacturers and suppliers to use predictable ways to achieve and design equipment to meet certain safety requirements.
  • Rising standards of industrial safety are contributing to the market’s growth positively. The standards for functional safety depends on the market that is targeted. For instance, IEC 61508, IEC 62061, and IEC 13849 standards are applicable for Industrial and Medical applications, ISO 26262 for Automotive applications, and DO-254/DO178b for Aerospace & Defense applications. The safety standards make sure that the products are built, designed, implemented, and operated under their prescribed operating conditions.
  • Recent industrial disasters have driven the need for enhanced safety, and a growing number of industrial control systems require IEC 61508 safety certification. For instance, in June 2019, an explosion at the Philadelphia Energy Solutions refinery destroyed the alkylation unit, where crude oil is converted to high octane gas and also led to the planned closure of the financially troubled plant.
  • Additionally, Functional safety is also becoming more prevalent and stringent in markets such as solar energy and aviation, as well as FDA Class III medical. Electronics in industrial markets typically must operate with minimal faults in a harsh environment.
  • Compliance with international standards such as IEC 61508 and IEC 61511, which indicate an acceptable quality in design and management of safety controls across industries, drives the implementation of Safety Instrumented Systems.
  • SIS is being implemented across industries in order to complement their process control systems, to reduce the risk of accidents. There are many ways in which safety instrumentation is being deployed. An SIS is usually an independent system with components like sensors, logic solvers, and control elements.

Scope of the Report

Functional safety is part of the overall safety of the system or piece of equipment that depends on automatic protection. Functional safety systems are composed of electrical and electronic elements which are used for the fulfillment of safety function in most of the related sectors having its application in industries such as Automotive, Oil & Gas, Power Generation, Chemicals & Petrochemicals, Food & Beverages,Pharmaceuticals, and Metal & Mining among others as there is a high risk of related injuries.

Key Market Trends

Emergency Shutdown Systems (ESD) is Expected to Hold Significant Share

  • Emergency Shutdown Systems (ESD) are a vital component of industrial protection that helps the controllers to bring the production facilities to a safe state and protect the personnel, the environment, and the assets if hazardous situations occur.
  • These systems are highly deployed in the oil and gas industry, petrochemicals, power generating sector, and several other industries. Out of all the end-users, the oil and gas industry is one of the largest sources of demand for emergency shutdown systems. Oil & gas plants are prone to incidents that can adversely affect people and the environment. They can reduce the risk of accidents in oil & gas plants by initiating plant shutdown in emergencies.
  • Internationally recognized standards such as IEC 61508 and ANSI/ISA S84.01 serve as guidelines to ensure functional safety to avoid hazardous situations.
  • The increasing shale gas production combined with growing concerns for safety, emissions, and contamination, has created the demand for ESD systems in the Oil & Gas industry.
  • New projects in the oil and gas industry are expected to create opportunities for the vendors in the market. For instance, 400 emergency shutdown valves were installed in Oman’s new project in 2017 lead by Orpic, one of Oman’s largest companies and one of the most rapidly growing businesses in the Middle East oil industry.
  • Further, in many cases, security factors also alter the demand for Emergency Shutdown Systems, especially in the case of the oil and gas industry. For example, in countries like Mexico, where the pipelines are often prone to insurgent attacks and theft, there is a high demand for automated and robust emergency shutdown systems, which support remote operation. Additionally, the recent statistics released by the Bureau of Safety and Environmental Enforcement, US, show that 28% of the accidents like spill, gas releases, fire and explosion occurred in OCS offshore establishments could have been controlled by proper emergency shutdown systems.
  • The United States Chemical Safety Board has implemented stringent regulations for the installation of ESD in all oil & gas, chemical, and power generation industries for human and environmental safety.
  • The growing demand for industrial safety-certified ESD systems in process and discrete industries and the increasing implementation of industrial safety measures by numerous governments are boosting the market’s growth positively.

Asia-Pacific is Expected to Witness Highest Growth Rate

  • Asia-Pacific is expected to witness the highest growth rate owing to the increasing adoption of functional safety solutions in the process and discrete industries.
  • With the growing manufacturing and automotive sectors, China has become one of the countries witnessing the highest adoption of functional safety solutions in the region. For instance, the Government of China views its automotive industry, including the auto parts sector, as one of the country’s pillar industries. The Central Government of China expects that China’s automobile output will reach 30 million units by 2020 and 35 million units by 2025.
  • With China and India being among the largest manufacturing hubs across the globe, the governments in these countries are focusing on smart manufacturing techniques, by increasing automation and industrial control systems (ICS), like Supervisory Control and Data Acquisition (SCADA), Distributed Control System (DCS), and Programmable logic controller (PLCs).
  • Growing industrialization in economies such as China and India is contributing to the market’s growth positively. These countries have adopted functional safety solutions for various process applications such as oil & gas, and power generation. According to the Chinese government, Industrial IoT (IIoT) will grow to value around USD 65 billion by 2020.
  • The growing adoption of safety automation solutions in the process industries in this region is contributing to the growth of the market in the region. According to British Petroleum’s Statistical Review of World Energy, 2018, more than 33% of the global refining capacity is concentrated in the Asia Pacific region. Countries like China, India, Japan, and South Korea have one of the most active oil and gas downstream sectors in the region, which together are responsible for over 78% of the oil refining capacity of the Asia Pacific region.
  • In India, there are four main legislations that cover Occupational Safety and Health at the workplace. It includes The Factories Act, 1948, The Mines Act, 1952 and Mines Rules, 1955 for the mining industry, The Dock Workers (Safety, Health, and Welfare), and The Building & Other Construction Workers (Regulations of Employment and Conditions of Service) Act, 1996. Such government regulations, therefore, have driven the implementation of safety systems across new industrial constructions and even to update their existing systems.

Competitive Landscape

The functional safety market is witnessing consolidation, and players are offering solutions specific to each application, such as fire safety (fire and gas monitoring and control), pressure safety (high integrity pressure protection systems), and asset safety (Emergency Shutdown Systems) among others. The key players operating in the market are focusing on new product development strategies to strengthen their product portfolio and increase customer acquisition.

  • October 2019 - Schneider Electric SE announced the newest generation of its intelligent enclosures for EcoStruxure Triconex safety and EcoStruxure Foxboro distributed control systems. Designed for oil & gas, petrochemical, chemical, and other high-hazard industrial enterprises, the new enclosures speed project execution and decrease start-up costs.
  • June 2018 - Siemens AG announced that the company had entered into an agreement to acquire Austin, Texas-based Austemper Design Systems Inc., a startup company that provides analysis, auto-correction, and simulation technology. This technology allows the customers to test and harden IC designs for functional safety in applications such as automotive, industrial, and aerospace systems where functional safety and high reliability are mandatory for compliance to safety standards such as ISO 26262.

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