Status : Published Published On : Sep, 2022 Report Code : VREP3006 Industry : Energy & Power Available Format : Page : 120
2022
2030

Global Variable Frequency Drive (VFD) Market – Analysis and Forecast (2022-2030)
Industry Insights by Type (AC, DC, and Servo), by Voltage (Low, Medium), by Power Range (Micro, Low, Medium, High), by Application (Pumps, Fans, Compressors, Conveyors) by End-User (Industrial, Infrastructure, Oil & Gas, and Power Generation)

Industry Overview

The size of the global variable frequency drive market was estimated at USD 24.9 billion in 2021, and it is anticipated to increase at a CAGR of 5.5% from 2022 to 2030. Growing demand for variable frequency drives (VFD) due to their benefits such as adjustable speed, dynamic torque control, and energy-saving from sectors such as power generation, automotive, and oil & gas are crucial factors expected to fuel the market growth. These factors also include increasing penetration of connected devices in various sectors such as commercial, industrial, and residential sectors. The demand for HVAC systems is also rising as a result of rising infrastructure development investments, which necessitates the development of solutions to increase building energy efficiency. This aspect is anticipated to have a beneficial impact on the target market's expansion.

Covid-19 Impact

Due to supply chain interruptions, the COVID-19 pandemic has had a large negative immediate impact on the electric motor manufacturing industry. Players in the industry are preparing for delivery and construction delays, either as a result of the stoppage of industrial operations to stop the virus' spread or because workers have tested positive. China, the US, and several European nations supply many of the parts and components required in the production of electric motors. The manufacture of variable frequency drives has been affected over the past two years by the downturn in industrial operations in the US and China. In addition, the supply-demand imbalance cost component and part of producers’ money.

Market Segment

Insight by Type

Based on type, the market is split into three categories: AC, DC, and other servos. The AC Drive industry is predicted to experience the highest CAGR during the projection period. The benefits of AC drives, such as their high power, ease of installation in comparison to other systems, and minimal maintenance needs, can be credited for this increase. To increase operational effectiveness, these benefits are luring many end-users from industries including food and beverage, automotive, and power generation. As a result of the industrial sector's rapid growth, there is a high demand for AC drives, which is anticipated to support the segment's growth.

The DC drive category in the target market is anticipated to increase moderately, with a CAGR of 4.8% between 2022 and 2030. Due to their higher maintenance costs when compared to AC technology, DC technology is only occasionally used in industrial settings.

Insight by voltage

Based on the voltage range the VFD market is segmented into low-level, medium-level, and high-level voltage. By accounting for more than 40% of market sales in 2021, the low power range segment led the world market. Low voltage frequency drives are used by end-use industries to power machineries such as centrifugal compressors, belt conveyors, pumps, fans, and pumps. High-performance, small-in-size, low-temperature low voltage drives are currently the focus of significant manufacturing investment. Thus, it is anticipated that the category would continue to dominate market growth due to factors like the extensive implementation of low voltage frequency drive-in industry verticals and rising R&D spending.

Insight by power range

On the basis of power range the VFD market is categorized into micro (< 6 KW), low (6Kw to 40 kW), medium (41-200Kw), and high (>200Kw) power drives. A sizeable portion of revenue was contributed by the medium power range frequency drive, which is anticipated to grow at a CAGR of 5.7% between 2022 and 2030. The advantages of 41-200 kW power range frequency drives are increased operating flexibility and better control. These are a big part of why their demand is raising across a variety of industries, including wastewater treatment facilities, petrochemical, mining, etc. The petrochemical industry's strong demand is also anticipated to assist the segment's expansion.

Insight by application

Pumps, fans, compressors, conveyors, and other components are the application market of the global VFD market. The pump segment has the largest VFD market share as it is used in water treatment applications in various industries. During the projected period HAVC market is also estimated to contribute with a remarkable CAGR of 6.8%. The demand for HVAC systems is predicted to expand due to the rapid rise in residential and commercial development activity. By regulating the speed of blower fans, pumps, or compressors, a VFD connected to the HVAC system aids in improving energy efficiency.

Insight by an end-user

With a 20% revenue share in 2021, the oil & gas segment held the majority of the market. At the production site, large pumps and motors are used by the oil and gas industry for a variety of purposes, including extraction, pumping, distribution, etc. The output is increased by reducing energy consumption when the variable frequency drive is integrated with the motors. As a result, it is anticipated that the demand for VFD will be fueled by players' strategies for maximizing profit by improving efficiency. In the target market, a sizable portion of revenue is anticipated to come from the industrial category.

Industry Dynamics

Growth drivers

The main market factors influencing the market growth include the need for energy efficiency, rising VFD usage across a range of industries, and a supportive regulatory environment. Nearly 65% of the industry's power usage is caused by electric motors. This gadget can cut the facility's energy use by about 70%. Additionally, it raises product quality and can cut production costs. Different industry verticals' increased propensity for digitization, connection, and automation of industrial processes has led to an increase in demand for VFDs, which enables them to remotely manage the process. By monitoring and checking the motor by variable drives, transforming them into smart motors, and even allowing them to be controlled remotely or even automatically, the resulting data can be improved with a notable gain in competence and energy savings in complex industrial uses like the HVAC systems of large buildings, further enhancing performance, system efficiency, and energy savings.

Challenges

The prevalence of cheap, inferior products is the main issue in the market for VFD that has been identified as having the potential to restrain market growth over the anticipated timeframe. There are many low-cost imitations and cheap alternatives accessible on the market, which have the power to draw people and present a challenge. Due to supply chain interruptions, the COVID-19 pandemic has had a large negative immediate impact on the electric motor manufacturing industry. Players in the industry are preparing for delivery and construction delays, either as a result of the stoppage of industrial operations to stop the virus' spread or because workers have tested positive. China, the US, and several European nations supply many of the parts and components required in the production of electric motors. The manufacture of variable frequency drives has been affected over the past two years by the downturn in industrial operations in the US and China. In addition, the supply-demand imbalance cost component and part producer’s money.

Industry Ecosystem

Transmission and distribution (T&D) networks need to be dependable and stable to meet the rising demand for energy. The global decline in exploration and production activities in the oil and gas industry as a result of falling oil prices has had an impact on the market for variable frequency drives as well as the operations of major market participants.

Geographical Overview

The Asia Pacific market dominates the global VFD market and is attributed to be participating highest in the growth plan during the furcated period as well. The government's business-friendly policies, rapid industrialization in developing nations, and rising construction activity are all expected to boost regional market expansion. A surge in demand for VFDs to increase working efficiency and lower energy consumption is anticipated as a result of rapid commercialization, the presence of major automotive, water treatment, pulp, and food and beverage manufacturers operating in nations like India, China, and Japan, and strong and stable economic growth.

Latin America is anticipated to grow at a CAGR of 6.2% during the projection period in addition by taking the growth drive of privatization and urbanization occurring in nations like Brazil and Mexico. In addition, rising demand from a variety of end-use sectors, including cement, chemicals, and pulp, is anticipated to drive the expansion of the VFD market in this area.

News & Update

  • Siemens has released the innovative, powerful, and compact SINAMICS G115D drive system in April 2021 with a focus on horizontal conveyor applications. The drive system is available in two configurations—motor-mounted and wall-mounted—and combines the motor, drive, and gearbox in a single piece.
  • A variable speed drive called the Altivar 360, for applications requiring 0.37 to 22 kW/0.5 to 30 HP, was announced by Schneider Electric in February 2020. This drive is especially well-suited for applications involving industrial machines and some consumer machines because of its small size, durable design, simplicity of installation, based on the Plug & Play principle, integrated functionality, and macro setup.
  • A sizable quantity of AC drives and other products were anticipated to be supplied by Danfoss Drives and other Danfoss business segments to the research, product development, and manufacturing facility Smart Technology Hub of the technology firm Wartsila in November 2020.

Competitive Insight

The market's core players employ a variety of tactics to strengthen their position as the industry's leading businesses. One such key strategy is hiring businesses to increase brand value among customers. Regularly releasing cutting-edge products that will benefit users is another crucial tactic.

Some of the significant industry players with extensive regional reach control the majority of the variable frequency drive market. ABB, Eaton, General Electric, Hitachi Ltd., Rockwell Automation Inc., Schneider Electric, Siemens AG, The Danfoss Group, WEG S.A., and Yaskawa Electric Corporation are renowned key market players.

Variable Frequency Drive Market Analysis

Frequently Asked Questions

Countries such as India, China, and Japan are anticipated to be the largest contributor in the market growth, owing to the massive investment in the manufacturing industries by the government of these countries to support their economic growth.
Globally, Asia-Pacific is the largest variable frequency drive market and expected to register the highest growth in the market, owing to the significantly increasing investment in the renewable energy, positively affecting the growth of the market.
The global Variable Frequency Drive (VFD) Market Analysis and the Forecast period are 2022-2030.
On the basis of power range, the variable frequency drive market is classified into micro-power drive, low-power drive, medium-power drive, and high-power drive.

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Research Methodology

  •  Desk Research / Pilot Interviews
  •  Build Market Size Model
  •  Research and Analysis
  •  Final Deliverabvle

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