The global AC drives market size stood at USD 10.39 billion in 2018 and is projected to reach USD 15.62 billion by 2026, exhibiting a CAGR of 5.2% during the forecast period.
The expansion and survival of the industrial sector are necessary for economic growth. To accomplish sustainable development and the total prosperity of the nation, sustainable industrialisation is crucial. Therefore, fierce rivalry, consumer purchasing power, mergers and acquisitions, partnerships and collaboration, investments, and the expansion of new projects are characteristics of industrial development. Industries like manufacturing and processing use a variety of equipment and parts, each with its own technology, mode of operation, and industry. The parts utilised in many industries, including power generation, oil and gas, metal and mining, food and beverage, and others, contain AC drives. They improve the industry’s energy efficiency by regulating and controlling rotating equipment utilised in industrial processes, such as fans, conveyors, machine spindles, and pumps.
They improve the industry’s energy efficiency by regulating and controlling rotating equipment utilised in industrial processes, such as fans, conveyors, machine spindles, and pumps. The two main causes propelling the expansion of the industrialization and urbanisation sectors are industrialization and urbanisation, respectively. Significant technological developments like the Industrial Internet of Things (IIoT) and progress in automation are viewed as possible opportunities for market expansion.
Due to its rapid industrialization and urbanisation, Asia Pacific is one of the top areas in the market for alternating current drives. According to the World Investment Report 2018, China and Singapore supplied the majority of the USD 671 billion in foreign direct investment that went into emerging economies in 2017. Additionally, as the industrial sector expands and consumer demand rises as a result, the need for AC drives is expected to rise throughout the projected period. For instance, according to the Central Intelligence Agency, as of 2019, the urban population in China, India, Malaysia, and Vietnam was 60.3 percent, 34.5 percent, 76.6 percent, and 36.6 percent, respectively, and it was growing at a pace of 2.4 percent, 2.4 percent, 2.1 percent, and 3 percent.
Industrialization and urbanisation at an Increasing Rate to Fuel the Market
The main drivers of market trends in the AC are the significant increase in urbanisation and the accelerating rate of industrialization. The need for AC drives will rise throughout the projection period as a consequence of rising consumer demand, which spurs growth in the industrial sector. For instance, according to the Central Intelligence Agency, as of 2019, the urban population in China, India, Malaysia, and Vietnam was 60.3 percent, 34.5 percent, 76.6 percent, and 36.6 percent, respectively, and it was growing at a pace of 2.4 percent, 2.4 percent, 2.1 percent, and 3 percent. The World Investment Report 2018 states that governments are concurrently concentrating on improving industrial rules and regulations to provide a favourable environment for exploring new sectors and increase competitor sustainability.
Supportive Government Regulations and Rising Energy Demand to Feed Growth
Government policies that are favourable and that encourage expansion in the industrial sector improve the market for AC drives Market. For instance, putting ISO 50001 (energy-management-system standard) into practise in the building & automation industry may hasten the integration of building automation systems. Numerous industrial businesses have been able to make sizable market expenditures because to the rising need for energy optimization. For instance, a prominent producer of solutions for power quality, Power Survey, received a USD 24 million investment in July 2017 for areas including connection, energy management, and energy optimization. Therefore, the product is expected to grow as a result of rising government rules that favour energy optimization.
The AC drive market is divided into low power drives, medium power drives, and high power drives based on the power rating sector. Low power drives are frequently used in a wide range of applications, including those involving fans, pumps, cranes, fluid machines, machine tools, printing presses, metal processing equipment, food processing equipment, and devices for the health and medical care industries, among others. The low power drive segment is anticipated to rule the market throughout the projected period because of its broad range of applications in vertical industries. In order to fulfil customer need, major industry players are predicting AC drive demand depending on application and technology environment. Siemens, TMEIC, Fuji Electric, Nidec Industrial Solutions, and other prominent companies are the main suppliers of the low power drive.
The need for AC drives is fueled by the usage of medium and high power drives for low and high power applications, both of which are expanding steadily. As a result, the low power drive category will be dominated by its broad range of applications, accelerating the expansion of the AC drive market.
The market for AC drives is divided into low voltage and middle voltage segments based on voltage. Due to its operational characteristics, such as its comprehensive solution for both low and high power applications, small size, greater power factor & availability, cheaper cost, and wide variety of manufacturers offering these devices as standard product, low voltage AC drive is driving demand. Because low and high voltage industrial demand is met by vertical businesses using medium voltage AC drives, this will support its dominance in the voltage category during the foreseeable period.
The AC drive market is divided into segments based on application, including pumps, conveyors, compressors, electric fans, extruders, and others. Numerous end-user sectors, including the chemical, mining, oil & gas, water & wastewater, and others, primarily employ pumps and electric fans. Therefore, when end-user industries expand, more pumps and electric fans will be used, which will raise the need for AC drives. Conveyor demand rises as the manufacturing and processing sectors expand, driving this market. Additionally, compressors are employed in a number of different sectors like oil and gas, energy, semiconductors and electronics, manufacturing, healthcare, and others. Consequently, the expansion of industries would spur an increase in the demand for compressors on the world market.
Food & beverage, oil & gas, power generation, building automation, metal & mining, water & wastewater, chemicals & petrochemicals, and others are the different end-user segments of the AC drive market. The market is being dominated by the electricity generating sector. The power generating business is expanding as a result of the rapid rise in the world’s need for electricity. The building automation sector also has a significant impact and contributes to the need for AC drives. For instance, according to the International Energy Agency, the demand for electricity rose by 4% in 2018, about twice as quickly as the worldwide demand for energy overall, with China and the U.S. being responsible for 70% of the growth.