Market Overview

The domestic market of computer-aided engineering (CAE) for mechanical engineering (based on company sales) increased to 90,164 million yen in 2022, 106.5% of the size of the previous year. In 2022, Russia's invasion of Ukraine and the shortage of semiconductors caused the price of raw materials to soar, accelerating inflation and disrupting the supply network of automotive parts, which led to turmoil in Japan's manufacturing industry. Meanwhile, China continued its zero COVID policy through the end of the year, restricting conduct and entry into the country, causing economic stagnation and forcing a reduction in auto production.

In 2023, as semiconductor manufacturing capacity strengthened, demand for semiconductors flourished in a wide range of industries. In particular, in the automotive industry, where the electrification of vehicles has increased, the development of automotive batteries and the research and development on system on a chip (SoC) or on electronic control unit (ECU) integration have increased. The use of software in such automotive development has accelerated, providing a tailwind for the market of CAE for mechanical engineering.
In addition, as the European New Car Assessment Program (Euro NCAP) has introduced virtual testing (VT) to pre-investigate collision impacts, new demand for mechanical engineering CAE for collision analysis has been generated. The domestic market of CAE for mechanical engineering is estimated at 97,014 million yen for 2023, 107.6% of the size of the previous year.  

Noteworthy Topics

Backed by Gigacasting, Virtual Testing, and Use of Software, CAE for Mechanical Engineering Shows Expansion Primarily in Automotive Industry

For many mechanical engineering CAE manufacturers, the automotive industry is one of the most important customers, so its development significantly affects the mechanical engineering CAE market.
In such a situation, the automotive industry proactively adopts CAE for mechanical engineering for various reasons. Here are three reasons:

First, as more software is used in automotive development, R&D on SoCs has increased worldwide to provide more functionality and performance with each software upgrade, which has contributed to the growing demand for semiconductors. 
Second, major automakers have started to deploy gigacasting (an advanced manufacturing process that produces large automotive parts at once by die casting, in which molten aluminum is injected into a precision mold), making the demand for mechanical engineering CAE widespread among the R&D and production sites.
Third, as the European New Car Assessment Program (Euro NCAP) has adopted virtual testing (VT), its use for frontal and side collision impacts from 2026 is likely to trigger an increase in the number of items and levels required for the triennial assessment. Driven by this demand for collision analysis, the mechanical engineering CAE business is projected to grow.

Future Outlook

In 2024, the demand for semiconductors has been steady, and the demand related to software and VT in the automotive industry continues, together with increased moves for gigacasting deployment, the demand for mechanical engineering CAE in R&D as well as production sites is constantly expanding. Therefore, the mechanical engineering CAE market is projected to reach 104,183 million yen in 2024, up 7.4% year on year.

Research Outline