The Global Variable Frequency Drive Market to Experience a Boost Owing to the Growing Demand for Efficient Energy Systems in the MarketDownload Sample Reports Overview
The global variable frequency drive market is estimated to be valued at $25,180.00 million by 2027, surging from $17,574.60 million in 2019 at a healthy CAGR of 4.8%.
Impact Analysis of COVID-19 on the Variable Frequency Drive Market
The global market for variable frequency drive is predicted to experience a healthy growth during the COVID-19 pandemic. This growth is projected to be due to continuous production of variable frequency drives in the key sectors such as power generation, mining, and construction as these sectors were exempted from restrictions by the lockdown rules imposed by the governments across the globe.
Moreover, companies working in the domain of electrical engineering machinery are supplying variable frequency drives to firms involved in the manufacturing of medical devices where these drives are required, thus aiding the medical sector for restraining the effect of COVID-19. For instance, in April 2020, an UK based variable frequency drive manufacturer, Invertek Drive Limited, prioritized the orders it received for making variable frequency drives for supplying them to companies involved in manufacturing medical devices including ventilators and personal protective equipment during the COVID-19. Such factors are predicted to positively impact the global variable frequency drive market.
Global Variable Frequency Drive Market Analysis
The implementation of energy standards by global organizations for manufacturing and utilization of electrical equipment with better energy efficiency while operating is anticipated to drive the market. For example, IEC 60364 is a set of energy standards applicable for electrical equipment utilized in buildings, which are issued by "International Electrotechnical Commission", a global body for preparation and implementation of energy standards for electrical equipment. The "International Electrotechnical Commission” was founded in 1906 and headquartered in Geneva, Switzerland. The implementation of the stringent energy consumption regulations is expected to set parameters for electrical consumption of various sectors, and this factor is predicted to drive the growth of the market.
Expensive installation of drives, along with high capital investment in businesses for setting up variable frequency drive manufacturing units and adhering with the stringent environmental and regulatory framework, can hamper the growth of the market.
The increasing prominence on technologies such as Internet Of things (IOT) is expected to create new scope of opportunities for the global variable frequency drive market for purposes such as predictive maintenance of devices such as pumps where variable frequency drives are utilized to avoid delays and damage while operations. Moreover, the growing emphasis on introducing innovation in variable frequency drive equipment is driving the market growth. For instance, in March 2021, a major American engineering firm operating in domains such as aerospace, building technologies, performance materials and technologies, “Honeywell”, stated about developing a power source, the Honeywell 1-Megawatt generator, that can be used in aviation. The product is anticipated to be launched in the third quarter of 2021 and the generator will be merged with the Honeywell HGT1700 auxiliary power unit, used in Airbus A350 XWB aircraft, to form a turbogenerator. Such technological advancements may further lead to lucrative market opportunities in the global variable frequency drive market in the upcoming years.
Global Variable Frequency Drive Market, Segmentation
The global variable frequency drive market is segmented based on type, power range, application, end-user, and region.
The type segment is further classified into web AC drive, DC drive and servo drive. Among these, servo drive sub-segment is predicted to have the fastest market growth, and it is expected that the market shall generate a revenue of $10,518.1 million by 2027, growing from $6,641.8 million in 2019 with a healthy CAGR of 6.1% in the forecast period. Servo drive sub-segment is expected to grow predominantly due to increasing use of automation for reducing human intervention in the manufacturing and operations, and this is expected to increase the utilization of servo drives in industries where precision and high operational efficiency are prerequisites. All these factors are anticipated to create a progressive impact on the sub-segment throughout the forecast period.
The power range segment is sub-categorized into micro, low, medium, and high-power range variable frequency drives. The medium power range sub-segment is projected to have a dominating market share in the global market and register a revenue of $8,879.3 million by 2027, with an increase from $6,091.3 million in 2019 and is expected to grow at a healthy CAGR of 5% during the forecast timeframe. The growing demand in the construction sector globally, where higher supply voltages and low energy losses are preferred for better efficiency of the electrical equipment, such as large pumps, cement mixers and others, is expected to increase the utilization of variable frequency drive-enabled electrical devices. The medium power range variable frequency drive fulfils these requirements, and the sub-segment is expected to grow in the forecast timeframe.
The application segment is further categorized into pumps, conveyors, HVAC systems and electric fans. The HVAC systems sub-segment is anticipated to being the fastest growing along with holding the maximum market share to reach $7,235.6 million by 2027, with a surge from $4,908.4 million in 2019 with a significant rate of CAGR 5.1% in the forecast timeframe. The increasing number of green buildings, where the energy consumption is less as compared to the conventional building structures is expected to increase the utilization of HVAC systems as these systems are installed for reducing the energy consumption levels. The surge in the number of ecofriendly green buildings globally is expected to increase the demand of HVAC systems in the forecast period.
The segment is further classified into food & beverage, oil & gas, power generation, infrastructure, and others. The infrastructure sub-segment is predicted to be the fastest growing along with the dominating segment and is estimated to reach $ 7,001.1 million by 2027, with a surge from $ 4,695.2 million in 2019 with a significant rate of CAGR 5.3% in the forecast timeframe. The infrastructure development and rapid construction projects such as commercial buildings, roadways, railways, and others in countries such as Saudi Arabia, United Arab Emirates, and China is aiding the growth of the infrastructure sub-segment. All these projects require equipment such as conveyors, lifts, centrifuges, mixers, and others in large numbers during construction. These devices operate with the help of variable frequency drives for energy efficiency and reduction in power losses. The growth in the construction sector and development projects such as railways in nations such as Saudi Arabia, United Arab Emirates, and China is expected to drive the infrastructure sub-segment in the forecast period.
The Asia-pacific region is projected to dominate the variable frequency drive market for the forecast period. This market generated a revenue of $ 6,114.3 million in 2019 and is projected to register a revenue of $8,256.7 million by 2027. This variable frequency drive market is projected to grow with a healthy CAGR of 4.00%.
The growing rate of industrial production in the emerging and developed countries of regions such as India, China, Japan, and South Korea, that are the major centers of production of industrial electrical equipment such as variable frequency drives, motors, pumps, compressors, and others is aiding the growth of the market in the region. In addition, there is a presence of major manufacturing hubs of electrical equipment such as China which holds a major share in the production of electrical equipment globally. These factors are expected to boost the market in the Asia-pacific region.
Key Players in the Global Variable Frequency Drive Market
Some of the leading global variable frequency drive market players are
- Honeywell International Inc.
- Rockwell Automation, Inc
- Johnson Controls International plc
- Eaton Corporation plc
- General Electric
- Schneider Electric
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Variable Frequency Drive Market:
- Bargaining Power of Suppliers: The suppliers in the variable frequency drive market are high in number. Several companies are working on new product technologies to avoid changing the supplier if the there is a hike in the price of a particular component.
Thus, the bargaining power suppliers is moderate.
- Bargaining Power of Buyers: Buyers have moderate bargaining power; they expect quality services as per the price. This enforces the variable frequency drive providers to offer the best service in a cost-effective way. Thus, buyers have the option to opt for the products that best fits their preference.
Thus, the bargaining power of the buyers is moderate.
- Threat of New Entrants: The demand in the variable frequency drive market is high so it is a highly lucrative market. But the investment required in this market is high as it requires infrastructure development at a large scale.
Thus, the threat of the new entrants is moderate.
- Threat of Substitutes: There is no alternative product currently for variable frequency drive solutions, which can be utilized at the scale of variable frequency drive.
Thus, the threat of substitutes is low.
- Competitive Rivalry in the Market: The competitive rivalry among industry leaders is high, majorly between the global players including Honeywell International Inc., Eaton Corporation plc, General Electric. These companies are launching their new products in the international market and strengthening the position worldwide.
Therefore, competitive rivalry in the market is high.