Variable Frequency Drive Market Trends, Size, Share by 2030

Coverage: Variable Frequency Drive Market covers analysis By Type (AC Drives, DC Drives, and Servo Drives); Voltage (Low Voltage (Up to 690 V) and Medium Voltage (more than 690 V)), Application (Pumps, Fans, Compressor, Conveyors, and Others), End Users (Infrastructure, Power Generation, Industrial, Oil and Gas, Others)

Publication Month : Apr 2024

  • Report Code : TIPTE100000488
  • Category : Electronics and Semiconductor
  • Status : Upcoming
  • No. of Pages : 150
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[Research Report] The Variable Frequency Drive Market size is expected to grow from US$ 20.14 billion in 2022 to US$ 29.98 billion by 2030; it is estimated to grow at a CAGR of 5.1% from 2022 to 2030.

Analyst Perspective:

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.

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Variable Frequency Drive Market: Strategic Insights

variable-frequency-drive-market
Market Size Value inUS$ 20.14 billion in 2022
Market Size Value byUS$ 29.98 billion by 2030
Growth rateCAGR of 5.1% from 2022 to 2030
Forecast Period2022-2030
Base Year2022
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Variable Frequency Drive Market Driver:

Increasing application in HVAC systems to Drive Growth of Variable Frequency Drive 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.

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Variable Frequency Drive Market Segmental Analysis:

Based on application, the Variable Frequency Drive Market is segmented into pumps, fans, compressors, conveyors, and others. Variable frequency drives are used to regulate the speed of electric motors in order to meet the actual demands of the process, hence improving energy efficiency and performance in any industrial application or building worldwide. When used in conjunction with an existing pump, fan, or compressor motor, a drive can often cut power consumption by up to 25%. There has been a rising need to increase the energy efficiency of drive systems installed in major manufacturing establishments. Electric drive systems account for a considerable portion of total electricity consumption. As a result, increasing motor efficiency will result in significant energy savings and a decrease in CO2 emissions into the environment. According to the IEA's Efficient World Scenario, current cost-effective technologies are adequate to quadruple global energy efficiency by 2040. VFD is one such cost-effective technology increasingly used to control the power usage on motor-driven systems such as fans, pumps, conveyors, and others. VFDs manage the speed and torque of motors, potentially increasing energy efficiency by up to 80%. By adding a VFD to a motor, one will not only assure correct industry application operations that lessen stress on the machine and system but also be able to optimize the speed of your machine, lowering energy usage if necessary. Thus, a rising focus on energy conservation strategies in motor drives will influence the variable frequency market trends in the future.

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Variable Frequency Drive Market Regional Analysis:

Geographically, the variable frequency drivemarket report is primarily divided into North America, Europe, Asia Pacific, Middle East and Africa, and South and 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.
  • The Chinese government has lofty ambitions for improving energy efficiency in the forthcoming years. In its 14th Five-Year Plan (2021-2025), the government aimed to reduce energy consumption per unit of GDP by 13.5% and CO2 emissions per unit of GDP by 18% from 2020 levels.

The Asia Pacific variable frequency drive market growth is further fueled by the rising number of manufacturers for VFD in the region.

Variable Frequency Drive Market Key Player Analysis:

The Variable Frequency Drive Market analysis consists of players such as ABB, Siemens, Schneider Electric, Danfoss, Rockwell Automation, Hitachi Ltd., and WEG SA are among the key Variable Frequency Drive Market players profiled in the report.

Variable Frequency Drive Market Recent Developments:

Inorganic and organic strategies such as mergers and acquisitions are highly adopted by companies in the Variable Frequency Drive Market. The strategic presence of key players positions Asia Pacific and Europe as a key region for the variable frequency drive market growth. A few market developments are listed below:

  • In May 2023, ABB India increased its production presence by introducing a new line for variable speed drive modules at the Peenya factory in Bengaluru. The new line will produce drives ranging from 75 kW to 250 kW, catering to all main industrial sectors. ABB's variable speed drives are used to adapt the speed of electric motors to the real demands of the process, hence improving energy efficiency and performance in any industrial application or building worldwide. When used in conjunction with an existing pump, fan, or compressor motor, a drive can often cut power consumption by up to 25%.
  • In October 2022, Rockwell Automation announced additional upgrades to its medium voltage PowerFlex 6000T variable frequency drives. PowerFlex 6000T drives featuring TotalFORCE technology provide more than just high-performance motor control. The VFDs provide real-time operating system data, which can aid with productivity and energy savings.
Report Coverage
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered
Segment Covered

Type, Voltage, Application, End Users

Regional Scope
Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope
Country Scope

This text is related
to country scope.

Companies Mentioned

1. Fuji Electric Co., Ltd
2. Mitsubishi Electric Corporation
3. Siemens AG
4. ABB Ltd.
5. American Electric Technologies Inc. (AETI)
6. General Electric Company
7. Hitachi Limited
8. Honeywell International Inc.
9. Rockwell Automation Inc.
10. Johnson Controls Inc.
11. Emerson Industrial Automation
12. Toshiba International Corporation
13. Schneider Electric

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. 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.

  1. 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:

Research Methodology

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.

  1. 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.

  1. 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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