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MARKET
BY TYPE (AC, DC, Servo), POWER RANGE
(Micro, Low, Medium, High), VOLTAGE
(Low Medium), APPLICATION (Pump, Fan,
Compressor, Conveyor, Elevator, Extruder)
GEOGRAPHY
— Global Trends Forecast To 2019
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Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
MarketsandMarkets is a global market research and consulting company based in the U.S. We publish strategically analyzed market research reports and serve as a business intelligence partner to Fortune 500 companies across the world. MarketsandMarkets also provides multi-client reports, company profiles, databases, and custom research services.
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Copyright © 2014 MarketsandMarkets
All Rights Reserved. This document contains highly confidential information and is the sole property of MarketsandMarkets. No part of it may be circulated, copied, quoted, or otherwise reproduced without the approval of MarketsandMarkets.
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2Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
1MARKET ANALYSIS
1.1 MARKET DYNAMICS
There are a number of factors affecting the variable frequency drives market directly or indirectly. These include issues such as rising energy and electricity prices, development and modernization of infrastructure, and implementation costs. These have been categorized under drivers, restraints, and opportunities.
1.1.1 RESTRAINTS
1.1.1.1 Implementation costs
VFD costs vary according to size, power rating, and applications in which these are used. The capital cost involved in its implementation in the industry is significant, when it comes to larger applications and higher power rating. Downtime involved with implementation and attachment of VFDs to the already existing systems also cause significant losses to the company using them. This is one of the significant factors that restrain growth in the VFD market. On the other hand, new installations typically do not have physical-fit problems, so they can be engineered to achieve significant benefits when a multi-disciplinary approach to appropriately apply VFDs is taken. Every large VFD system requires a specialist engineer or operator to ensure that the equipment is working properly. The system also requires proper maintenance and upkeep, adding to the overall capital and operating cost of VFDs. All these factors together prove to be a deterrent to the VFD market.
1.1.1.2 Lag in implementation of standards and directives
Globally, various standards and directives are in place to ensure that energy efficiency is achieved and proper equipment is used in all the processes, but industries bypass these directives and ignore them. The following factors are cause of such insensitivity towards the standards and directives in place: VFD technology does not fit well into existing installations physically or organizationally.
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3Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
VFDs cannot be installed without major rearrangement of electrical equipment and at time building additions. In practice, one discipline is not solely responsible, so VFDs tend not to be applied. These factors create a lag in implementation of standards and directives, and therefore, also come across as a growth barrier in the VFD market.
1.1.2 OPPORTUNITIES
1.1.2.1 Huge Market Potential For VFDs
At present, the global VFD industry is facing increasingly fierce competition. Since the market is very attractive at present, its potential capacity becomes very impressive. The market is drawing more industry participants. Development in the drives technology is expected to make application in electric power, cement, elevator, mining, metallurgical, transportation, and other modern areas very convenient and cheap, thereby offering numerous advantages to the industry where they are being utilized.
Due to increasing needs of the user and progress and diversification of consumer, the VFD market will experience huge surge in the future. In recent years, China’s AC drives market has observed a XX%- XX % growth rate. At least in the next five years; the drives market demand will continue to grow at over XX %.
According to relevant statistics, China's potential market space general AC drive is about $ XX billion to $ XX billion. In Europe, the drive penetration is XX % while in the U.S., the drive's penetration is very less. According to ARC Advisory Group’s research, the total medium voltage
AC drives market in India will exceed $ XX million in 2015. All these factors provide a huge opportunity for VFD market as a whole.
1.1.2.2 Growing Environmental Concerns
Global climate change poses greatest economic, political, developmental, and environmental challenge all over the world.
At present, there is an opportunity to use energy more efficiently. Energy efficiency offers the cheapest and guaranteed means of curbing carbon emissions, and money thus saved can be put into other productive uses. Supplying energy for sustainable economic development is a MarketsandMarkets
4Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019 goal that is shared by developed and developing countries alike. Demand for global energy services to support economic growth has grown by XX % since 1980, and is expected to grow another XX % by 2030.
A study estimates that in the current scenario, about XX million tons of carbon dioxide has been released by industries across Europe, and despite several measures this has projected an increase annually. The need for energy has been rising steadily, and as per International
Energy Agency’s (IEA’s) publication, if the current policies were to be in effect in the future, the emission is expected to increase by XX % by 2050, while oil demand is anticipated to rise by XX %. Global warming has already started showing adverse effects on the environment.
Numerous long-term changes have already been recorded, for example increase in global average air and ocean temperatures and meltdown of Arctic and Antarctic snow and ice leading to rising sea level.
According to IEA’s World Energy Outlook 2013, over $ XX trillion has been invested in 2013 in energy supply. It also estimates that investments of $ XX trillion for energy supply will be needed to meet demand worldwide by the year 2030.The report estimates that an investment of $ XX trillion in energy supply and in energy efficiency. It estimates that an investment of $
XX trillion is expected to be required globally, to double the rate of energy efficiency improvement, $ XX trillion of which will be invested by the XX countries. These efficiency investments avoid new supply investments of $ XX trillion worldwide and $ XX trillion in the G8 countries, resulting in a net incremental investment of $ XX billion worldwide, and $ XX billion in the G8 countries.
The implementation level of VFDs across European industries had been estimated to be only about XX %- XX %. This resulted in a reduction of carbon dioxide emissions by XX million tons per annum. With increasing presence of VFDs in diverse markets across Europe, further reductions in carbon dioxide emission is inevitable. The return of investments for today’s advanced drives is less than a year. This makes the usage of VFDs relatively economical and enables companies to be environmentally responsible, thereby making the technology sustainable. All this provides huge impetus to the electrical/electronic equipment such as VFD that help in providing energy efficiency; thereby acting as a huge driver for this market.
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5Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
2VARIABLE FREQUENCY DRIVE MARKET, BY TYPE
2.1 MARKET ANALYSIS
This chapter analyzes global VFD market and its trends with respect to three types of drives, namely alternating current (AC) drives, direct current (DC) drives, and servo drives. AC drives occupy the maximum market share of the VFD market due to their wide applications in all types of industries, especially in the AC induction motors. The figure below gives estimates for type-wise revenue of VFD for 2013.
FIGURE 1 VFD MARKET SHARE(VALUE), BY TYPE, 2013
2013
XX%
XX%
Type 1
Type 2
Type 3
XX%
Source: Government Publications and MarketsandMarkets Analysis
AC drives, due to their wide areas of application are used in almost all industries such as manufacturing, mining, textiles, and steel, hence, they are expected to dominating the global
VFD market. They captured around XX% of the market share in 2013. DC drives stood second with XX % market share whereas, servo drives stood third with XX %.The figure below gives estimates for type of VFD for the year 2019
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6Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
2.1.1 AC DRIVES TO BOOST VFD MARKET
The table below provides estimates for market size of VFDs, by type, from 2012 to 2019.
TABLE 1 GLOBAL VFD MARKET SIZE, BY TYPE,
2012-2019 ($MILLION)
CAGR%
Type 2012 2013 2014-e 2019-p
(2014-2019)
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
AC Drives
DC Drives
Servo Drives
Total
Source:, Expert Interviews and MarketsandMarkets Analysis
AC drives offer significant advantages over other drive types. A key factor contributing to their wide spread application is the compatibility with the induction motors. AC drives, hence, dominate the market share in terms of value. These are estimated to have a market size of $
XX million in 2014 and are projected to be $ XX million by 2019, growing at a CAGR of XX % from 2014 to 2019. The servo drive segment is estimated to grow with a CAGR of XX % in the forecast period (2014-2019), due to the increased demand for precision and efficiency.
2.1.2 AC DRIVES
2.1.2.1 Asia-Pacific – Main Growth Driver
The global AC drives market was $ XX million in 2013 and is expected to be $ XX million in
2019. Asia-Pacific is the growth engine of global economy, with the prospering economies of China, India, Japan and Korea among others. The high degree of industrial growth in the region has resulted in increasing demand for the AC drives market. The region registered market size of $ XX million in 2012. The table below provides estimates of market size of AC drives, by geography.
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7Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
TABLE 2 AC VFD MARKET SIZE, BY GEOGRAPHY,
2012-2019 ($MILLION)
CAGR%
Region 2012 2013 2014-e 2019-p
(2014-2019)
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
Asia-Pacific
Europe
North America
Latin America
Middle East Africa
Total
Source: Expert Interviews and MarketsandMarkets Analysis
Global AC drives market is estimated to grow from $ XX million in 2014 to $ XX million by
2019, at a CAGR of XX % from 2014 to 2019. Asia-Pacific is estimated to have a CAGR of XX
% from 2014 to 2019, and is projected to be valued at $ XX million by 2019. The increase in size can be attributed to the rapid advancement of infrastructure and demand for greater efficiency. North America, with an estimated market size of $ XX million in 2014 is projected to increase to $ XX million by 2019, with a CAGR of XX % from 2014 to 2019. European region is projected to grow at a CAGR of XX % in the forecast period. The Middle East Africa is forecast to have the fastest growth with a CAGR of XX % from 2014 to 2019. This market is expected to increase from $ XX million in 2014 to $ XX million by 2019, due to an increased investment in infrastructure and also owing to expanding oil gas industry.
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8Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
3VARIABLE FREQUENCY DRIVES, BY GEOGRAPHY
3.1 MARKET ANALYSIS
3.1.1 VFD MARKET ANALYSIS, BY GEOGRAPHY
The table below provides the market size estimates for VFD market, by geography, from 2012 to 2019.
TABLE 3 VARIABLE FREQUENCY DRIVES MARKET SIZE,
BY GEOGRAPHY, 2012-2019 ($MILLION)
CAGR%
Region 2012 2013 2014 2019
(2014 - 2019)
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
Asia-Pacific
Europe
North America
Latin America
Middle East Africa
Total
Source: Expert Interviews and MarketsandMarkets Analysis
The variable frequency drives market was valued at $ XX million in 2013.It is projected to reach $ XX million by 2019 at a CAGR of XX % during the forecast period. Asia-Pacific is the largest market for variable frequency drives and accounted for a share of about XX % in 2013.
The Middle East African market is projected to be the fastest growing market at a CAGR of XX %.
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9Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
The table below provides the market size estimates in unit shipments for VFD market, by geography, from 2012 to 2019.
TABLE 4 VARIABLE FREQUENCY DRIVES MARKET SIZE,
BY GEOGRAPHY, 2012-2019 (000’ UNITS)
CAGR%
Region 2012 2013 2014 2019
(2014 - 2019)
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
Asia-Pacific
Europe
North America
Latin America
Middle East Africa
Total
Source: Expert Interviews and MarketsandMarkets Analysis
The global shipment of VFD is estimated to be XX thousand units in 2014 and is projected to grow at a CAGR of XX % from 2014 to 2019. Asia-Pacific is expected to lead the market with shipment estimated at XX thousand units in 2014. It is projected to increase to XX thousand units, growing at a CAGR of XX % from 2014-2019. The growth is attributed to low-priced manufacturing cost in China and an increase in the demand for variable frequency drives from developing countries which do not have manufacturing units and depend on exports of these supplies. The Latin American market is expected to have the highest CAGR of XX % from 2014 to 2019 due to rising infrastructure expenditure.
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10 Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
3.2 ASIA –PACIFIC TO DRIVE THE GLOBAL MARKET
3.2.1 CHINA
China’s focus on infrastructural development has translated into FDI in several industrial and manufacturing sectors. Active support from the Chinese Government has enabled accommodation of higher number of value-addition industries, translating into overall industry growth, several Chinese industrial sectors such as telecommunications, wind and solar power, petrochemical processing, automotive, and steel productions are among the top contributors to the growth of its economy. Hence, they exhibit the highest impact on the demand for VFDs.
Thus, China continues to be the most lucrative market for VFDs.
The table below provides the market size estimates for the Chinese VFD market, by power range, from 2012 to 2019.
TABLE 5 CHINA: VARIABLE FREQUENCY DRIVES MARKET SIZE,
BY POWER RANGE, 2012-2019 ($MILLION)
CAGR%
Power Range 2012 2013 2014 2019
(2014-2019)
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
XX XX XX XX XX
Micro Drives
Low Power Drives
Medium Drives
High Drives
Total
Source: Expert Interviews and MarketsandMarkets Analysis
The Chinese VFD market, by power range, was valued at $ XX million in 2013. It is projected to reach $ XX million by 2019 at a CAGR of XX % from 2014 to 2019. High drives alone hold
XX % in 2013 of the Chinese VFD market and is projected to grow at a CAGR of XX % from
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11 Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
2014 to 2019. The micro drives market is projected to grow at the highest CAGR of XX % from
2014 to 2019 due to low base effect.
The table below provides the market size estimates for the Chinese VFD market, by voltage range, from 2012 to 2019.
TABLE 6 CHINA: VARIABLE FREQUENCY DRIVES MARKET SIZE,
BY VOLTAGE RANGE, 2012-2019 ($MILLION)
CAGR%
Voltage Range 2012 2013 2014 2019
(2014-2019)
Low Voltage (690 V and XX XX XX XX XX below))
XX XX XX XX XX
XX XX XX XX XX
Medium Voltage (above 690 V)
Total
Source: Expert Interviews and MarketsandMarkets Analysis
Low voltage drives commanded the largest market share of XX % in the Chinese VFD market, by voltage range, in 2013. The medium voltage drives market is estimated to grow at a CAGR of XX % from 2014 to 2019 to reach $ XX million by 2019 due to increasing industrial demand.
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12 Variable Frequency Drives Market - By Type, Power Range, Voltage, Application
Geography — Global Trends Forecast To 2019
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