The soft magnetic composite market is projected to reach USD 44.4 billion by 2025 and is expected to expand significantly to USD 81.9 billion by 2035, growing at a CAGR of 6.3% during the forecast period. Asia-Pacific is poised to be the most lucrative regional market, registering the highest CAGR of 10.3%, while the United States will remain the largest individual market in terms of revenue in 2025.
This growth trajectory is underpinned by large-scale electrification initiatives, surging EV adoption, and rapid industrial automation. Favorable government policies, technological advancements, and increased renewable energy integration further reinforce long-term market potential.
The market is being shaped by increasing adoption of electric vehicles (EVs), accelerated electrification of industrial systems, and growing reliance on renewable energy. Soft magnetic composites (SMCs) offer key advantages such as low eddy current losses and enhanced magnetic performance, making them vital in motors, transformers, and energy-efficient systems.
The shift toward smart grids, EV propulsion systems, and miniaturized electronic devices further fuels demand. Particularly, soft ferrites are gaining popularity for their high-frequency performance, affordability, and application in advanced telecommunications. However, high manufacturing costs and price volatility of critical raw materials such as cobalt and iron are limiting widespread adoption. Despite these challenges, manufacturers are focusing on advanced powder metallurgy, new material compositions, and strategic OEM collaborations to enhance efficiency and reduce costs.
Looking forward, the 2025 to 2035 period will see the soft magnetic composite market driven by trends like Industry 4.0 adoption, nanostructured material development, and AI-enabled design automation. The integration of 3D printing in component manufacturing is expected to lower production complexity while enhancing customization and performance.
Sustainability initiatives such as closed-loop recycling, bio-based binders, and reduced dependency on rare earth elements will open new growth avenues. Additionally, emerging applications in fusion energy, IoT devices, robotics, and aerospace systems will further propel market expansion, positioning SMCs as foundational materials in the next generation of electrified, smart infrastructure.
The global soft magnetic composite market is segmented by material into electrical steel, soft ferrite, and iron powder; by type into 1P, 3P, and 5P; by application into electrical coils, motors, generators, transformers, inductors, sensors, and others (including electromagnetic interference suppression components and solenoids); by end use into automotive, industrial machinery and equipment, consumer goods, power generation, and others (such as aerospace, defense, and research laboratories); and by region into North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia Pacific, and the Middle East and Africa.
Electrical steel is expected to remain the most lucrative material segment in the soft magnetic composite market from 2025 to 2035, registering a CAGR of 6.6%, outperforming the global average. This growth is directly correlated with surging demand for high-efficiency transformers and motors, particularly in power transmission infrastructure and EV propulsion systems. Electrical steel’s high magnetic permeability and low hysteresis loss make it indispensable for large-scale grid upgrades and utility-scale renewable integration.
In comparison, soft ferrite, while gaining traction due to its high-frequency stability, is more commonly deployed in compact, cost-sensitive applications like EMI suppression and power electronics. Iron powder, although used in additive manufacturing and prototyping, lags in scalability and performance relative to the other two categories, limiting its market penetration. Given the substantial capital investments into electrification of both transport and energy grids, electrical steel's material properties and deployment versatility ensure it captures the lion’s share of material-based revenues through 2035.
| Material Segment | CAGR (2025 to 2035) |
|---|---|
| Electrical Steel | 6.6% |
Among the type-based segments 5P soft magnetic composites are poised to be the fastest-growing category between 2025 and 2035 and is estimated to account for 22% of the market and projected to grow at a CAGR of 7.1%. These high-density, multi-phase materials are optimized for performance-critical applications like electric traction motors and advanced generators in EVs and industrial systems. With enhanced permeability, minimal core losses, and improved thermal stability, 5P materials are gaining preference in next-generation designs.
In contrast, 1P materials often used in low-performance consumer electronics are approaching saturation, with limited room for innovation or cost reduction. 3P composites, while moderately evolving, continue to serve mid-range industrial applications but lack the specialization required for high-efficiency systems, capping their growth potential.
| Type Segment | CAGR (2025 to 2035) |
|---|---|
| 5P | 7.1% |
The motors segment in the application category is projected to be the most lucrative in the soft magnetic composite market from 2025 to 2035, translating to a strong CAGR of 6.9%, notably above the market average. This growth is propelled by the accelerating global demand for electric vehicles (EVs), industrial automation, and robotics, all of which rely heavily on high-efficiency motors designed with soft magnetic composites to minimize core losses and improve flux density.
The segments like transformers and inductors are also witnessing growth due to the rise in smart grid infrastructure and power electronics, their expansion remains more linear. Applications such as sensors and electrical coils are driven by steady demand in automotive and consumer electronics but do not match the capital intensity or volume growth of the motor segment.
Furthermore, within end-use industries, automotive remains the primary driver, followed by industrial machinery and power generation. Others in the application segment refers to electromagnetic interference suppression components and solenoids, while in end-use, it includes sectors like aerospace, defense systems, and research institutions.
| Application Segment | CAGR (2025 to 2035) |
|---|---|
| Motors | 6.9% |
Among end-use industries, the automotive sector is projected to be the most lucrative in the soft magnetic composite market from 2025 to 2035, reflecting a CAGR of 6.8%, which is significantly above the global average of 6.3%. This growth is primarily fueled by the rapid electrification of vehicles both EVs and HEVs as well as mandates for higher fuel efficiency and lower emissions. Soft magnetic composites (SMCs) are increasingly used in electric powertrains, motors, sensors, and onboard charging systems due to their low core losses and compact design advantages.
Industrial machinery and equipment are another major end-use category, benefiting from Industry 4.0 trends and increased automation. The power generation segment is driven by renewable energy expansion, particularly in transformers and inductors. Consumer goods continue to grow steadily with demand for compact electronics and appliances. The others category includes aerospace, defense systems, medical imaging equipment, and scientific research applications sectors that require precision components with superior magnetic performance.
| End-Use Segment | CAGR (2025 to 2035) |
|---|---|
| Automotive | 6.8% |
High Manufacturing Costs
Manufacturing soft magnetic composites calls for intricate manufacturing procedures since they mainly involve powder metallurgy and advanced sintering methods which are the determining factors behind high costs. The requirement for specific equipment and strict testing which are mandatory are part of the newly added expenses.
Also, getting a hold of the high-purity materials such as iron and cobalt is another circling factor to the production of course these materials are the main reasons behind the high scrutiny of pricing quoted to manufacturers in the areas that are affected by high competition. Companies must explore cost-effective manufacturing techniques and alternative materials to mitigate these expenses and maintain competitiveness in the industry.
Raw Material Price Fluctuations
The soft magnetic composite market is particularly exposed to changes of raw materials like iron, nickel, and cobalt, which can be highly volatile. The factors that play are the political conflicts, supply chain break, and the mining outputs that fluctuate which in turn constitute the costs of the specific materials.
Such uncertainty leads to difficulties for the manufacturers in keeping stability in the profit margins and pricing structure. The primary strategy that the players are outlining includes researching new material compositions, establishing long-term supplier collaborative, and sponsoring recycling plans to guarantee cost-effective and steady procurements of raw materials.
Advancements in Powder Metallurgy
Innovations in the field of powder metallurgy are not only making the production of soft magnetic composites more efficient but also less costly. Advances in manufacturing techniques, such as the incorporation of additive and high-density compaction, provide the opportunity for the industry to commoditize the enhanced mechanical strength and magnetic properties of the products.
The long-term benefits of these advancements will particularly be seen in high-performance applications like electric vehicles, industrial automation, and renewable energy systems. The constant breakthroughs in powder machining methods will open new avenues for enterprises to boost their ranges of products and fill the market need for magnetic materials with better energy consumption.
Integration with Industry 4.0 and Smart Manufacturing
The ongoing integration of Industry 4.0 technologies into sectors is responsible for the boost for high-performance materials such as soft magnetic composites. Smart manufacturing is being incorporated with tools like machine learning, robotics, and data analysis which are shifting things to a new level regarding the control of raw materials, lessening waste, and heightening the efficiency in production as a result.
The amalgamation of SMCs with innovative manufacturing applications not only is a possibility in new areas like robotics, IoT-enabled devices but also in telecommunications such as high-speed data. By the time the other sectors gatekeep digital transformation, the market of soft magnetic composites is anticipated not only to be stable on the same line but to grow significantly.
The United States soft magnetic composite (SMC) market is witnessing a consistent growth trend as a result of the increased utilization of energy-efficient electric motors and transformers that are mostly found in the flourishing electric vehicle (EV) sector and in the renewable energy sectors.
The government programs that are directed at the energy-saving and the continuing developments of the additive manufacturing process are the two other contributors that have an impact on the growth of the market. The transition from traditional to lightweight and high-tech materials in the manufacturing of industrial and consumer electronics is another characteristic determinant.
The USA market has an evaluation of growing at a rate of CAGR of 6.5% (2025 to 2035), maintained substantially above the global average due to the strong demand in the manufacturing sector as well as the new technologies in the field of magnetic materials.
| Country | CAGR (2025 to 2035) |
|---|---|
| United States | 6.5% |
Besides gaining benefits, the UK soft magnetic composite sector is boosted by financing in such fields as sustainable energies, electrification of transport, and developments that take place in modern power electronics. Due to strong pressure on the environment, SMCs have to be replaced with inductors and motors for section vehicles and wind energy applications in next-generation equipment, consequently, purchase them in high demand.
Furthermore, partner universities and industrial stakeholders have been the leading forces in this research trend. In the United Kingdom, the rise in the soft magnetic composite market is projected at 6.1% during the forecast period of 2025 to 2035, which is a little bit below the global figure due to the reason that the market is growing mature and there is a considerable need for raw material imports.
| Country | CAGR (2025 to 2035) |
|---|---|
| United Kingdom | 6.1% |
The SMC market of the European Union is largely influenced by the refereeing environmental regulations, the increasing of electric vehicles, and the growing investment in renewable energy. The lead demand for discrete semiconductor components (SMCs) comes from countries like Germany and France mainly in vehicle and industrial applications, whereas the most particular products are high-performance electric motors and transformers.
Research projects oriented on sustainable magnetic materials and circular economy principles promote even more the growth. According to the forecasts, the EU market will expand at a compound 6.4% annual growth rate (2025 to 2035) which is very similar to the global average since the government is providing plenty of money to the industry and there are technological advancements.
| Region | CAGR (2025 to 2035) |
|---|---|
| European Union | 6.4% |
Japan's SMC (Soft Magnetic Composites) market is secured by the nation's advanced manufacturing ecosystem and being at the top of the field in electric motor technology. The emphasis on miniaturization and high-efficiency power systems, especially for hybrid and electric vehicles, leads to an increase in the demand for soft magnetic composites in the avowed sector.
The robotics and electronics industries support this growth of SMC market very well. In contrast, the lack of raw materials and the old workforce are the burdens for the economy. Japan's SMC market is expected to rise at a CAGR of 5.9% from 2025 to 2035, slightly under the global average, mainly due to market saturation and high manufacturing costs.
| Country | CAGR (2025 to 2035) |
|---|---|
| Japan | 5.9% |
South Korea is emerging as a key player in the SMC market, fueled by its strong automotive, consumer electronics, and semiconductor industries. The remarkable development of EV and renewable energy infrastructures, along with government benefits for green technologies, inflates the demand for the business.
Progress in nanocrystalline and amorphous magnetic materials has a substantial impact on the competitiveness. South Korean SMC market, which is expected to expand at a 6.7% CAGR (2025 to 2035), is primarily driven by high-tech applications and export-oriented manufacturing. The market growth is above global average, due to the increase in R&D investment and industrial collaborations.
| Country | CAGR (2025 to 2035) |
|---|---|
| South Korea | 6.7% |
The Soft Magnetic Composite (SMC) sector is increasing very fast mainly due to more and more capacity for renewable energy sources, electric motors, and electromagnetic application projects. The main players in the sector lay emphasis on enhancing the quality of materials, improving the manufacturability and, in particular, decreasing the core losses in the magnetic components. The main trend in this market includes technological progress, green projects, and new partnerships between material suppliers and end-users, etc.
Höganäs AB
Höganäs AB is the most important player in the world of iron-based powder applications, especially in the field of soft magnetic composite solutions. The firm places the greatest emphasis on environment, health and social safety, productivity, and performance optimization the most in electric motors, and transformers.
Höganäs also keeps making investments in research and development, thus, bringing its portfolio to that level, which is necessary to cope with the expected surge in the demand for energy-efficient materials. Some of the recently promoted steps in this direction were taking up sustainable production methods and interacting with end-users to bring joint ideas to life.
By offsetting its share of various industries, the firm further strengthens its competitiveness and is enabled to stay on the forefront of the constantly transforming electromagnetic applications market.
Rio Tinto Metal Powders
Rio Tinto Metal Powders is among the most dominant producers in the metal SMC market and its focus is on high-density powder metallurgy. This giant takes advantage of its huge mining and processing facilities to function as the provider of metal powders with better magnetic properties than competing ones.
A few of the latest projects were the expansion of the customer base through cooperation with major car makers and industrial producers regarding the solution of sustainable and efficient materials. Focusing on technology innovation, and effective supply chains, Rio Tinto launches the project to increase the performance of the electric motors, and the like, while helping the cost-management and material-wastage issues.
Hitachi Metals, Ltd.
Hitachi Metals, Ltd. stands out for its cutting-edge magnetic materials that serve in high-frequency applications. The firm highlights prominently the importance of the reduction of core losses and increased permeability related to the operation of electrical devices. Through the continuous investment in the R&D projects, Hitachi Metals have designed exclusive materials that possess unique features.
For instance, they find extensive use in electric-car and industrial plants automation tasks, the need to be optimal for such applications. Besides that, the strategic partnerships and the green initiatives are the main reasons why the company could enlarge its focus on the SMC market and become a significant player in it, thus contributing to the industry change towards energy-saving and eco-friendly solutions.
GKN Powder Metallurgy
GKN Powder Metallurgy is among the leaders in providing powder metal components and has managed it for many years by adapting to the automotive and industrial sectors changing needs in a very quick manner. The company, on the other hand, is developing a new model of soft magnetic composites that performs better. This is important for the automotive and renewable energy applications.
Utilizing the professional knowledge, it has, GKN Powder Metallurgy preciously manufactures products, thus, avoids excess production costs. The drive for innovation is evident through its significant investments in material science and automation technologies, which aim at product efficiency improvement and the promotion of an ecologically sustainable electromagnetic application in different parts of the world.
Sumitomo Electric Industries
Sumitomo Electric Industries is mainly standing for high-performance SMC materials for electrical and automotive applications. The concentration on miniaturization and improved efficiency has resulted in the invention of advanced materials that allow the realization of compact and high-frequency operation.
Sumitomo Electric is a company that is loaded with a development push through the expansion of research and production resources, which aims at eco-friendly and efficient soft magnetic composites targeted at the cutting-edge technological applications.
| Report Attributes | Details |
|---|---|
| Current Total Market Size (2025) | USD 44.4 billion |
| Projected Market Size (2035) | USD 81.9 billion |
| CAGR (2025 to 2035) | 6.3% |
| Base Year for Estimation | 2024 |
| Historical Period | 2019 to 2024 |
| Projections Period | 2025 to 2035 |
| Report Parameter | Revenue in USD billion |
| By Material | Electrical Steel, Soft Ferrite, Iron Powder |
| By Type | 1P, 3P, 5P |
| By Application | Electrical Coils, Motors, Generators, Transformers, Inductors, Sensors, Others |
| By End Use | Automotive, Industrial Machinery and Equipment, Consumer Goods, Power Generation, Others |
| Regions Covered | North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia Pacific, Middle East and Africa |
| Countries Covered | United States, Japan, Germany, India, United Kingdom, France, Italy, Brazil, Canada, South Korea, Australia, Spain, Netherlands, Saudi Arabia, Switzerland |
| Key Players | Höganäs AB, Rio Tinto Metal Powders, Hitachi Metals, Ltd., GKN Powder Metallurgy, Sumitomo Electric Industries, PMG Group, Carpenter Technology Corporation, Hitachi Chemical, Magnetec GmbH, Höfer Metall Technik GmbH, Other Major Players |
| Additional Attributes | Market driven by EV adoption, renewable energy expansion, and industrial automation; electrical steel dominates due to efficiency; Asia-Pacific leads growth with 10.3% CAGR; key players focus on R&D and strategic partnerships |
| Customization and Pricing | Available upon request |
In terms of Material, the industry is divided into Electrical Steel, Soft Ferrite, Iron Powder
In terms of Application, the industry is divided into Electrical Coils, Motors, Generators, Transformers, Inductors, Sensors, Others
The report covers key regions, including North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia, and the Middle East and Africa (MEA).
The global market is projected to reach USD 44.4 billion by the end of 2025.
The market is anticipated to grow at a CAGR of 6.3% over the forecast period.
By 2035, the market is expected to reach USD 81.9 billion.
The electrical steel segment is expected to dominate the market due to its high magnetic permeability, low core losses, and critical role in enhancing efficiency across motors, transformers, and generators.
Key players in the soft magnetic composite market include Höganäs AB, Rio Tinto Metal Powders, Hitachi Metals, Ltd., GKN Powder Metallurgy, Sumitomo Electric Industries.
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Soft Magnetic Composite Market
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