The global variable frequency drive market is expected to grow at a compound annual growth rate of 4.65% over the forecast period to reach a market size of US$24.410 billion in 2026 from US$17.758 billion in 2019. In segmentation of variable frequency drive market by type, the market is segmented into AC, DC, and servo drives, among them AC drives are projected to have the largest market share in the forecast period as they can be used in a wide range of applications because of its adjustable characteristic which adjusts the power of the appliances according to the need. This in turn caters to the demand of the variable frequency drive in the forecasted period. Servo motors and drives growth is restrained by the limitations of these goods, such as the high cost which prevents the investment in this market. Apart from it, the lack of skilled labor is the major constraint in the development and growth of the servo market. While under segmentation by power voltage, the market is segmented into low, medium, and high voltage drives. The medium segment will have significant positive growth in the forecast period as it reduces the energy consumption and carbon dioxide emissions into the environment, hence, further increases the demand for the medium voltage drives. The market by application is segmented into compressors, conveyors, pumps, fans, and others. Among them, the compressors have significant potential growth in the forecast period, because the demand for energy efficiency increases the demand for the variable frequency drives in compressors to reduce the electrical stress and prevent damages. The major industries that are using the compressors are Oil & Gas, chemical, food & beverages, and building automation industries. The variable-frequency drive market is one of the major markets that work as an interconnection for the other markets, that are, switchgear market, electric motor market, substation equipment market, control panel market, power quality equipment market, and HDVC Transmission market.
The market growth is driven by the increasing demand in various industries such as Oil & Gas, increasing government regulations for energy effective consumption with reducing the wastage of the power transmission, and increasing demand for energy efficiency. Stagnant market growth in Oil & Gas Industry and fall in the production and research & development activities are adversely impacting the growth of the variable frequency drivers. This market has the potential growth in the research and development sector, which will bring innovative technology into the market, and that will be catered by the government. This brings some new opportunities for the companies, such as power infrastructure up-gradation, improving the Internet of Things to improvise the application and people can use it remotely without facing any issues. Though, this opportunity brings a challenge for the companies to compete with the gray market suppliers which are supplying at competitive prices, and hence, creating a hindrance for the potential companies.
Pandemic has impacted the global variable frequency market quite adversely as it impacted the supply side of the market as the manufacturing sector is unable to produce the drives due to lockdowns in the countries. While lockdowns increased the demand for energy consumption at a commercial level and industrial level, though the energy consumption at home has increased significantly as people started working at home, and people have to do their tasks on their own, shops need to improvise as per the pandemic needs, and so on, these demands increase the potential opportunities for the companies to grow through research and development in the production activities, coming up with the new innovations in the technology and products for the consumers to cater their demand.
Since 2019, though the pandemic has affected the market severely, few developments have been taking place. ABB has launched some drives to tackle the harmonic issues. Yaskawa Europe GmbH has expanded its product variation in industrial automation and acquired the factory automation process unit in Milan. Mitsubishi Electric Automation and Siemens have introduced new products for energy efficiency in 2019. Recently, Rockwell Automation has launched its product Kinetix 5100 servo drive in the market. CG Power and Industrial Solutions Limited have launched its new products into the variable speed drive market in a compact size with unique features in it for complex applications.
APAC to witness lucrative growth
The Asia Pacific is expected to have a substantial market share in the variable frequency drive market as this region is having an increasing population, which in turn, increases the demand for the consumption of power. Also, this region has rapid industrialization and urbanization, especially in China, India, South Korea, and Japan. That is why these countries are considered major manufacturers in the Asia Pacific region. Apart from it, the government is promoting the use of renewable sources of energy to protect the environment, which further boosts the demand for the variable frequency drive. There is potential growth for the companies to come up with innovative products to combine the recent energy generation with the current electrical infrastructure in an efficient way. There is potential growth in the transmission and distribution infrastructure sector of the Asia Pacific region due to the rapid industrialization and growth in renewable energy sources boosts the demand for effective energy consumption in the market. Though, this sector requires research & development and innovation by the companies.
After the Asia Pacific region, North America is expected to hold the second-largest market share in the variable frequency market due to an increase in the E&P activities, mainly for HVAC systems. While Europe has the potential growth in this market in building the infrastructure facilities and the Middle East and Africa market has the potential which is yet to be explored by the companies.
Frequently Asked Questions (FAQs)
Q1. What will be the variable frequency drive market size by 2026?
A1. The global variable frequency drive market is expected to reach a total market size of US$24.410 billion in 2026.
Q2. What are the growth prospects for the variable frequency drive market?
A2. The variable frequency drive market is expected to grow at a CAGR of 4.65% during the forecast period.
Q3. What is the size of the global variable frequency drive market?
A3. Variable Frequency Drive market was valued at US$17.758 billion in 2019.
Q4. Which region holds the largest market share in the variable frequency drive market?
A4. The Asia Pacific is expected to have a substantial share in the variable frequency drive market owing to the increasing population, which in turn, increases the demand for the consumption of power.
Q5. What factors are anticipated to drive the variable frequency drive market growth?
A5. The variable frequency drive market growth is driven by the increasing demand in various industries such as Oil & Gas, increasing government regulations for energy effective consumption with reducing the wastage of the power transmission, and increasing demand for energy efficiency.