Variable Frequency Drive Market Size To Worth USD 30.61 Bn By 2032

Published Date : 30 Dec 2022

The global variable frequency drive market size is expected to be worth around USD 30.61 billion by 2032 from USD 20.78 billion in 2022, growing at a CAGR of 4%. during the forecast period 2023 to 2032.

In the past few years, the variable frequency drives (VFD) market has seen substantial growth, due to the high potential for infrastructure development in developing nations, which has boosted the supply for heating and ventilation systems. VFD research is currently shifting toward supplying industry-specific technologies with the goal of lowering costs and reducing practical downtime, generating a flurry of vendor advances. Buildings and industrial infrastructure monopolies primarily electricity consumption as energy, and electric-driven motors are expected to utilize roughly 45 percent of the electricity in the world in buildings and industrial purposes. 

The increased awareness campaigns of the need for climate change action including the use of green technologies is believed to enhance the environment more, while the world's economy will create a market for VFDs, as introducing additional variable speed drives, particularly in the pump, fan, or compressor systems that are common throughout all industries and housing developments, can typically improve energy efficiency by an additional 25%. The architecture of contemporary, high-efficiency rotors combined with variable-speed drives is adaptable and dependable, resulting in the drives being used for HVAC systems in buildings with advanced energy-saving features.

Report Insights:

  • By product, the North America variable frequency drive market was valued at USD 5.7 billion in 2021 and is expected to grow at a CAGR of 5.3% from 2022 to 2030.
  • By end-use industry, the food processing sector was valued at US$ 5.3 billion in 2021.
  • By product, the AC drives segment held 69% of total sales. 
  • The DC drive product segment is estimated to grow at a CAGR of 4.9% during the forecast period. 
  • Based on power range, the low power range segment garnered a revenue share of 41% and the medium power range frequency drive is predicted to grow at a CAGR of 5.8% from 2022 to 2030.
  • By Application, the pumps section contributed for 30% of total sales in 2021. 
  • The HVAC application segment is estimated to grow at a CAGR of 6.9%.
  • In 2021, the Asia Pacific region's market was worth USD 8.7 billion.
  • Latin America is predicted to grow at a CAGR of 6.6% over the projection period.

Regional Snapshot

During the forecast period, the Asia Pacific region is predicted to lead the variable frequency drive market, trailed by North America and Europe. In 2021, Asia Pacific held the greatest proportion of the worldwide variable frequency drive market. Asian countries such as India, China, Japan, South Korea, Indonesia, and the rest of Asia Pacific are driving the expansion of the APAC Region. The petroleum & gas, commercial, electricity, and infrastructure industries are the primary end consumers of variable frequency drives in this zone. The region's expanding privatization of the manufacturing industry is boosting demand for variable frequency drives. 

The Middle East and African nations are in the process of developing infrastructure. Saudi Arabia recently launched its 2030 vision strategy for long-term prosperity. South Africa has become one of the richest mining regions in the world. These company operations are expected to drive the market in the area.

Variable Frequency Drive Market Report Scope

Report Coverage Details
Market Size in 2023 USD 20.78 Billion
Market Size by 2032 USD 30.61 Billion
Growth Rate from 2023 to 2032

CAGR of 4.00%

Asia Pacific Market Share in 2021 46%
Fastest Growing Market  Latin America 
Base Year 2022
Forecast Period 2023 to 2032
Segments Covered Product, Power Range, Voltage Type, Application, and End User
Regions Covered  North America, Europe, Asia-Pacific, Latin America and Middle East & Africa
Companies Mentioned ABB Ltd, Siemens AG, Danfoss A/S, Rockwell Automation, GE Energy Power Conversion, Toshiba International Corporation, Schneider Electric, Mitsubishi Electric Corporation, Honeywell International Inc., Emerson Industrial Automation,  Fuji Electric Co. Ltd, Johnson Controls Inc., Eaton PLC, Hitachi Ltd


Market Dynamics

Driver: Greater than ever industrialisation and growing demand for energy efficiency

Variable frequency drives (VFDs) are becoming more popular in the manufacturing and infrastructural sectors. Cement, biochemical, petrochemical, mineral extraction, petroleum, paper mills, and water & water treatment are among the key areas that employ variable frequency drives. Process compressors, coolers, cooling tower fans, Conveyors, fans, utility pumps, process pumps, fans, blowers, air compressors, chippers, grinders and crushers all use variable frequency drives.

China's cement and manufacturing sectors, as well as those in India, the United States, Iran, Indonesia, Saudi Arabia, Brazil, Russia, Turkey, and Egypt, present attractive potential for the variable frequency drive industry. With expanding initiatives have been undertaken in India, cement consumption is predicted to rise by 45 million tonnes over the next three to four years. It is expected to hit 550–600 million tonnes per year by 2025. The construction industry in India is the largest demand generator for cement, accounting for around 67 percent of overall utilization.

Restraint: Stagnant growth of oil & gas industries and decline in exploration and production activities

Oil and gas is a largest end industry for variable frequency drives. Due to falling petroleum exploration, the sector has seen lackluster development in recent years. In this business, the need for variable frequency drives is tied to exploratory, extraction, and production operations, as well as capital investment by oil and gas corporations. Natural gas and oil price fluctuations have a direct influence on these operations.

The variations happen as a result of changes in the quantity and demand for natural gas and oil, changes in government legislation, including those governing the discovery, extraction, and commercialization of oil and natural gas reserves, temperature fluctuations, natural catastrophes, and other causes. Because many large-scale development projects are for a long time, oil and gas corporations may cut or postpone big investments based on the impression of lengthy low oil and natural gas prices. Additionally, the drop in capital expenditures by petroleum operators and service providers has a direct impact on the growth of the variable frequency drives industry.

Opportunity: Transformation of power infrastructure

With rising power consumption, there is a greater requirement for robust and dependable generation & distribution (T&D) networks. According to the US Department of Energy (DOE), only a system capable of handling rapid voltage instability can provide continuous electricity. The primary causes of the growing frequency of blackouts include old infrastructure, low funding, and a lack of concrete plans to update the system. The United States experiences worse blackouts than any other developed nation. Power failures in the states last more than an hour and have gradually grown in recent years, losing American businesses over USD 150 billion each year. According to the Canadian Energy Association, the Canadian power industry requires USD 400 worth of investment in the next 20 years. As a result, the modernisation of power infrastructure is likely to stimulate requirement for variable frequency drives and generate profitable prospects for market participants.

Challenge: Shortage of components and parts due to supply chain distribution

The COVID-19 epidemic has had a substantial detrimental short-term effect on electric motor production owing to supply chain interruptions. Supply and construction delays are expected, either owing to the stoppage of manufacturing processes to prevent the transmission of the infection or because personnel have came back positive. Many of the components and materials used in the production of electric motors are sourced from China, the United States, and a few European nations. In the last two years, the downturn in industrial activity in China and the U.S. has affected the manufacture of variable frequency drives. Furthermore, the supply–demand imbalance caused financial damages for component/part producers.

Market Segmentation

By Product

  • AC Drives
  • DC Drives
  • Servo Drives

By Power Range

  • Micro
  • Low
  • Medium
  • High

By Voltage Type

  • Low Voltage
  • Medium Voltage

By Application

  • Pumps
  • Electric Fan
  • HVAC
  • Conveyors
  • Extruders
  • Others

By End User

  • Oil & gas
  • Industrial
  • Power
  • Infrastructure

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