LONDON--Technavio’s latest heavy industry report covers the present scenario and growth prospects of the global variable frequency drives (VFD) market 2016-2020.
In this report, Technavio’s tools and components research experts announce their key market highlights for the global variable frequency drives market. Their findings include:
Increased need for automation in the metallurgy and processing industry to drive the global VFD market
According to Technavio’s latest report, the global VFD market is projected to reach USD 25.32 billion by 2020, growing at a CAGR of close to 8%. The growth of the market can be attributed to the need for optimizing manufacturing processes and reducing operational costs by monitoring energy consumption. Energy savings in fan and pump applications, better process control and system regulation, improved speeding up or slowing down of machines, and decreased maintenance costs are some of the advantages of VFDs. They also offer inherent power-factor correction, safe acceleration, protection from overload current, and emergency bypass capability.
“The need for industrial automation is one of the most important drivers that is positively impacting the growth of the global VFD market. The manufacturing sector has a great impact on global productivity, trade, and R&D activities. Manufacturers across industries are increasingly adopting automation to improve the quality, safety, productivity, and speed of various operations. Automation also helps them enhance market competitiveness and reduce costs,” says Anju Ajaykumar, a lead analyst at Technavio for the tools and components sector.
Global competition in subsectors of manufacturing has resulted in employee productivity tripling in the US, and doubling in the EU. This growth results in the additional benefit of substantial consumer surplus. “In the US, the cost of durable goods has decreased by one-tenth of the total consumer price inflation because of the increase in efficiency and technological advances since the 1980s,” adds Anju.
High adoption of AC drives across all industries leading to its dominance in the VFD market
The global VFD market is classified into three major product segments, including AC, DC, and servo. The AC VFD segment dominated the market in 2015 with more than 84% and is projected to continue its leadership during the forecast period.
The AC drives segment accounts for the maximum market share because of the drives' comprehensive use in all types of industries and induction motors to achieve multiple speeds of operation. In terms of application, AC drives used for pumps account for the largest market share. Other high-power AC VFDs are used in heavy industries such as metals and mining, oil and gas, cement, paper, power generation, wind energy, water and waste water, and marine. As these industries incur high capital and infrastructure expenditure, the use of AC drives can save money and reduce power consumption.
“AC drives have a wide range of applications, and are suited for harsh, corrosive, and wet environments, and conditions requiring special enclosures. The low maintenance costs incurred by them help them gain market share,” says Anju.
Key market trend: growing preference for next-generation drives
Advances in technology have enabled vendors in the global VFD market to develop next-generation drives, which have given them a competitive edge in the market. The changing demand from end-users has prompted vendors to develop advanced drives. For example, Siemens provides drives equipped with advanced network connections. The latest trend is the development of advanced integrated drives to provide energy efficiency while increasing overall productivity.
Fuji Electric is developing high-performance drives to boost positioning and enhance control functionality. The FRENIC-VG series has a speed response of 600 Hz, which is six times better than previous models. These drives have enhanced accuracy, such as enhanced torque accuracy and speed control accuracy when using a pulse generating card. All these gains in performance in the VG series can be attributed to the use of dual processors, resulting in doubling of the processing power available to speed up the control crunch algorithms.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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