Variable Frequency Drive Market Research Report 2021-2031
The variable frequency Drive market size is projected to reach US$ 34.01 billion by 2031 from US$ 22.03 billion in 2023. The market is expected to register a CAGR of 5.6% during 2023–2031. The growing digitalization and government initiatives to promote the adoption of energy-efficient solutions are likely to remain key trends in the market.
Variable Frequency Drive Market Analysis
A variable frequency drive (VFD) is a type of motor controller that regulates the frequency and voltage of an electric motor's power supply. The VFD can also control the motor's ramp-up and ramp-down during start and stop cycles, respectively. Even though the drive regulates the frequency and voltage of power supplied to the motor, it is commonly referred to as speed control because the consequence is an adjustment of motor speed. A few of the major reasons why VFDs are preferred over other motor controlling technologies, such as soft starters and across-the-line contactors, are: save energy and increase system efficiency, convert electricity for hybridization purposes, match the speed of the drive with the process requirements, match the torque or power of a drive with the process requirements, improve the work environment, reduced noise levels, such as from fans and pumps. These applications are the reason for the rising variable frequency drive market share in the overall motor control market. Energy saving is the most important factor considered when selecting VFDs for motor-driven systems. In the current market, fans, pumps, and compressor applications hold a major chunk of the variable frequency drive market forecast.
Variable Frequency Drive Market Overview
One of the major factors driving the variable frequency market growth is the need for energy savings in drive control systems used in industries. VFDs can dramatically cut energy use, lowering production costs. VFDs control pumps and fans in a system using an alternating current motor rather than valves and dampers. In the US, rotating machinery consumes 50% of the total electrical energy generated. Current estimates indicate that centrifugal or flow-related applications, such as fans, blowers, compressors, and pumps, require 65% of the total. Variable speed drive technology is a cost-effective way to tailor driver speed to load needs, resulting in lower operating costs and increased productivity. Major energy consumers such as chemical industries, oil and gas industries, refiners, automotive industries, and others are constantly investing in improving energy consumption. These industries are expected to be in a better position to replace conventional motor control systems with VFD. Variable frequency drives are predefined solutions for some applications, such as extruders, bigger reciprocating pumps, displacement pumps, and large agitators (up to 1 kW). However, in other applications, the use of variable frequency drives is proposed and investigated. If the machines are routinely operated at partial load, the savings potential increases. Individually, the use of a VFD can cut energy expenses by 40%.
Also, the variable frequency drive market is witnessing digital trends. Wireless diagnostics represent the future of VFDs, whether they are Wi-Fi, Bluetooth, or something else entirely. In a typical facility where access to a drive in a closed enclosure is limited, engineers can use the drive's wireless signal to connect directly to the system from a distance. The Internet of Things (IoT), a global trend across all industries, has had an impact on VFDs by speeding up and simplifying the flow of data from machine to technician and back. These variable frequencies drive market trends and further generate potential for the growth of the market.
Strategic Insights
Variable Frequency Drive Market Drivers and Opportunities
Increasing application in HVAC systems to Favor Market
VFDs are very beneficial for centrifugal loads like pumps and fans. Variable-loaded air compressors (usually rotary screw type), boiler and chiller feedwater pump motors, cooling tower fans, air handler supply and return fans, exhaust fans, and others are common commercial and industrial VFD uses. VFDs are especially useful in applications with long working hours since there are more opportunities to harvest energy savings and offset the cost of the equipment. Variable frequency drives (VFDs) are increasingly used in the HVAC sector for a variety of applications. They can control the motor speed very smoothly across a large range. Reduced motor speed leads to a considerable loss in motor power. VFDs have been used in building HVAC systems for more than 4 decades. However, variable frequency drives have only recently been implemented in a growing number of HVAC systems within buildings, owing to their improved energy-saving characteristics. The global HVAC industry is growing with a CAGR of about 8%. This rise in the HVAC market will significantly impact the variable frequency drive market trends as these are being increasingly used for energy efficiency in these systems. The variable frequency drive market report emphasizes such key factors driving the market and prominent players' developments.
Rising Demand for Energy Efficiency Among Industries
Industries across the globe are transforming their operations towards the adoption of sustainable and energy-efficient infrastructure for mitigating and reducing environmental impact. This increases the demand for variable frequency drives for enhancing energy efficiency in industrial processes. Industries increasingly demand variable frequency drives for precisely controlling motor speed and power consumption. Moreover, numerous industries such as infrastructure, power generation, industrial, oil and gas, and others are adopting variable frequency drives for ensuring precise temperature and ventilation, navigating complex terrain, and optimizing operations by promoting energy efficiency. These factors are anticipated to create significant growth opportunities for the market during the forecast period.
Variable Frequency Drive Market Report Segmentation Analysis
Key segments that contributed to the derivation of the variable frequency drive market analysis are type, voltage, application, and end user.
- Based on type, the variable frequency drive market is divided into AC drives, DC drives, and servo drives. The AC drives segment held a larger market share in 2023.
- By voltage, the market is segmented into low voltage (up to 690 V) and medium voltage (more than 690 V)). The low voltage (up to 690 V) segment is anticipated to expand during the forecast period.
- By application, the market is segmented into pumps, fans, compressor, conveyors, and others. The pumps segment is anticipated to expand during the forecast period.
- In terms of end users, the market is segmented into infrastructure, power generation, industrial, oil and gas, and others. The oil and gas segment is anticipated to expand during the forecast period.
Variable Frequency Drive Market Share Analysis by Geography
The geographic scope of the variable frequency drive market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South & Central America.
Asia Pacific holds one of the largest global variable frequency drive market share. Asia Pacific is the manufacturing hub of the world. Countries such as China, Japan, South Korea, and India, among others, are at the forefront of manufacturing activities and industrial investments. For instance, foreign direct investment in China's manufacturing industry increased by 1.9 percent year on year to 283.44 billion yuan (US$39.47 billion) in the first 10 months of 2023, while high-tech manufacturing increased by 9.5 percent, according to China's Ministry of Commerce data. Similarly, according to the 8th annual "State of Smart Manufacturing Report" by Rockwell Automation, a major share of manufacturers in India are investing in advanced technologies. Manufacturers in India invest 35% of their operational budgets in technology, outpacing the global average (23%) and countries such as the United States (27%) and Japan (24%).
Major manufacturers in the Asia Pacific are increasingly turning their focus on energy-efficient operations in their manufacturing establishments. This initiative creates a potential for the variable frequency to drive market growth in this region. Some of the instances signifying this trend are,
In 2021, ADB approved a new energy policy to assist developing member countries (DMCs) in accelerating Asia-Pacific's low-carbon transition. The energy strategy identifies a number of major priorities and technologies that our DMCs should investigate, notably those related to energy efficiency and renewable energy.
Variable Frequency Drive Market Report Scope
Variable Frequency Drive Market News and Recent Developments
The variable frequency drive market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the variable frequency drive market are listed below:
- Siemens AG launched Sinamics G220, a new high-performance frequency drives that join the Sinamics family in the run-up to Hannover Messe 2023. The innovative frequency drives are equipped with so-called clean power technology. This reduces harmonics by up to 97 percent without the need for line harmonic chokes or DC link chokes. (Source: Siemens AG, Company Website, March 2023)
Variable Frequency Drive Market Report Coverage and Deliverables
The “Variable Frequency Drive Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:
- Variable frequency drive market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
- Variable frequency drive market trends as well as market dynamics such as drivers, restraints, and key opportunities
- Detailed PEST/Porter’s Five Forces and SWOT analysis
- Variable frequency drive market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments
- Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the variable frequency drive market
- Detailed company profiles
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Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Type, Voltage, Application, End Users
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
This text is related
to country scope.
Frequently Asked Questions
The global variable frequency drive market is estimated to register a CAGR of 5.6% during the forecast period 2023–2031.
Expanding industries and increasing application in HVAC systems are the major factors that propel the global variable frequency drive market.
The growing digitalization and government initiatives to promote the adoption of energy-efficient solutions to play a significant role in the global variable frequency drive market in the coming years.
The key players holding majority shares in the global variable frequency drive market are Fuji Electric Co., Ltd, Mitsubishi Electric Corporation, Siemens AG, ABB Ltd., American Electric Technologies Inc. (AETI), General Electric Company, Hitachi Limited, Honeywell International Inc., Rockwell Automation Inc., and Johnson Controls Inc.
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Some of the customization options available based on the request are additional 3–5 company profiles and country-specific analysis of 3–5 countries of your choice. Customizations are to be requested/discussed before making final order confirmation, as our team would review the same and check the feasibility.
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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