Model-Based Manufacturing Technologies Market to Reach $118.6 Bn by 2036

Market expected to expand at 7.0% CAGR driven by regulatory compliance and digital transformation

Mar. 24, 2026 at 10:03am

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The global Model-Based Manufacturing Technologies Market, valued at $60.3 billion in 2025, is projected to reach $118.6 billion by 2036, expanding at a steady 7.0% CAGR. This growth is driven by the transition from physical prototyping to high-fidelity virtual validation, as well as new regulatory requirements like the European Union's Digital Product Passport mandate.

Why it matters

The surge in demand for Model-Based Systems Engineering (MBSE) and Digital Twin platforms is no longer just about operational efficiency, but a matter of regulatory compliance. As model-based tools become essential for market access, organizations must navigate a complex landscape of vendor consolidation and deployment options to ensure readiness.

The details

The primary drivers behind the market's growth include the European Union's Digital Product Passport (DPP) mandate starting in 2026, which is making model-based tools essential for market access. Additionally, the 2025 acquisitions of Altair by Siemens and Ansys by Synopsys have created 'simulation powerhouses' that are reshaping vendor ecosystems and licensing structures. While on-premises solutions still dominate, a rapid migration toward hybrid and cloud models is underway, particularly in the automotive and medical device sectors.

  • The European Union's Digital Product Passport (DPP) mandate starts in 2026.
  • Siemens acquired Altair and Synopsys acquired Ansys in 2025.

The players

Siemens

A global industrial conglomerate that acquired Altair, a leading provider of simulation software, in 2025.

Synopsys

A semiconductor design software company that acquired Ansys, a leading provider of engineering simulation software, in 2025.

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What they’re saying

“We are moving into an era where a digital twin is no longer a luxury—it's a regulatory requirement.”

— Shambhu Nath Jha, Principal Consultant at Fact.MR

What’s next

CXOs must decide between committing to consolidated vendor ecosystems or seeking agile, cloud-native alternatives as they navigate the complex post-acquisition landscape.

The takeaway

The window for 'wait-and-see' on model-based manufacturing is closing as simulation-based certification becomes the global standard. Early adopters will secure a significant lead in both time-to-market and regulatory readiness.