Variable Frequency Drive Market

Variable Frequency Drive Market Size (2024-2029):

The Global Variable Frequency Drive Market was valued at USD 23.11 billion in 2023 and is projected to reach USD 31.26 billion by 2029, growing at a CAGR of 5.16% from 2024 to 2029.

Market Overview:

The Internet of Things (IoT) could be a global trend in every industry, having an impact on VFDs by speeding and simplifying the flow of data from the machine to the technician and back again. A variable frequency drive (VFD) is a powerful device that's capable of regulating the speed of an AC motor by adjusting the frequency alongside the voltage of the electric power supplied to that motor. With the assistance of VFDs, otherwise, high-power-consuming appliances and motors can save energy. VFD is especially utilized in high-voltage AC devices, which don't require a continuous flow of current, and there's a high requirement for speed control. The main advantages of VFD include energy savings, low motor starting current, managing devices at various speeds, easy installations, operations at high power factor, etc.

Market Drivers:

Variable frequency drives are finding increasing applications within the industrial, power, and infrastructure sectors. They are majorly used in areas that include fans, utility pumps, process pumps, fans, blowers, conveyors, air compressors, process compressors, coolers, cooling system fans, and chippers. The housing sector generates the very best demand for cement, accounting for about 67% of the entire consumption.

Market Restraints:

The cost factor has a direct impact on variable frequency drive market growth, which includes installation and application of variable frequency drive. Harmonics is the gap between the motor and drive; input line quality and system efficiency are the prominent factors liable for the higher cost of Variable frequency drive. The high cost of the kit, operation, installation, and maintenance power quality are key parameters driving the value to the upper side. Hence, the use of high equipment costs is the major factor that restrains the variable frequency driving market growth within the forthcoming years.

Market Opportunities:

The Internet of Things (IoT) has caused a revolution within the industrial sector by improving industrial processes through the introduction of smart machines, inventory systems, and production machinery. It's also increased the utilization of automated equipment like variable frequency drives, which may be connected to the web and monitored and controlled remotely as per the method requirement. Additionally, it provides machine builders the flexibility with which they have to accommodate the end-user requirements. This includes the ability to regulate interfaces like communication field buses, pulse trains, and digital or analog I/O modules. Variable frequency drives that support web services are used to bring IoT connectivity to the device level and will enable machine builders to research and improve their applications or perform diagnostics at remote locations. This enables them to implement fixes while testing and avoid the occurrence of unexpected downtime in the future, thereby providing growth opportunities for the variable frequency drive market.

VARIABLE FREQUENCY DRIVE MARKET REPORT COVERAGE:

Market Segmentation:

Variable Frequency Drive Market - By Product Type:

• AC Drive
• DC Drive 
• Servo Drive

The AC drives segment accounted for a dominant share in 2019 and is estimated to expand at the very best CAGR of 7.8% from 2023 to 2029. The widespread application of AC drives in medium and heavy industries, like oil and gas, food and beverages, power generation, pulp and paper, infrastructure, and automotive, is predicted to boost segment growth over the forecast period. Additionally, AC drivers offer easy integration, low maintenance cost, and reduced levels of vibrations and noise, thus further increasing the demand for variable frequency drives.

Variable Frequency Drive Market - By Power Range:

• Micro
• Low
• Medium
• High

The low power range segment accounts for quite 40% of the revenue share and is anticipated to dominate the variable frequency drive market throughout the forecast period. Low-power variable frequency drives are majorly used for applications like machine tools, pumps, fluid machines, fans, cranes, metal processing machines, and food processing machines. Hence, due to the widespread adoption in various sectors, the low-power segment is estimated to dominate the variable frequency drive market over the given period.

Variable Frequency Drive Market - By Application:

• Pumps
• Conveyors 
• HVAC
• Electric Fans 
• Others

The pumps segment is expected to account for a dominant share of the variable frequency drive market. In industries like oil and gas, wastewater, etc., the hydraulic drives connected with pumps are being replaced by variable frequency drives to smoothen the operations of the motors and simultaneously lower energy consumption. Besides, the variable frequency drive also eliminates the necessity for a throttling valve, cuts maintenance costs, and simplifies piping installation and style. Thus, increasing advantages related to the mixing of the VFD with pumps, including growing demand from major end-use industries, are predicted to support variable frequency market growth.

The HVAC application segment is estimated to expand at the highest CAGR of 8.0% over the forecast period. Increasing residential and non-residential construction across developed and emerging economies is expected to increase the demand for HVAC systems. Thus, the rise in demand for HVAC systems is anticipated to surge the demand for VFDs over the forecast period.

Variable Frequency Drive Market - By End User Industry:

• Food & Beverage 
• Oil & Gas
• Infrastructure 
• Agriculture
• Others

Based on the end-user, the variable frequency market is broadly categorized into food & beverage, oil & gas, power generation, infrastructure, agriculture, mining, etc. The increasing production and exploration activities, and therefore the rising number of discoveries of the latest hydrocarbon reserves, are predicted to contribute to the expansion of the oil & gas industry segment. Additionally, to this, the growing initiatives for increasing productivity by using lift methods are expected to favor the industry.

Market Regional Analysis:

• Asia Pacific
• Europe
• North America
• Latin America
• The Middle East and Africa

The variable-frequency drive market is predicted to expand at an outstanding pace during the forecast period due to automation in the power industry and the increasing infrastructure sector. Asia Pacific region is predicted to dominate the variable frequency drive market share within the variable frequency drive market. China, India, South Korea, Japan, and Indonesia are the fastest-growing nations and are the most important markets for infrastructure and industrial sectors. Industries including oil & gas, metals, and mining are adopting the drives to scale back energy consumption and limit Carbon dioxide emissions. In the European region, the progressing automotive sector is predicted to steer the variable frequency to drive market growth.

Impact of the COVID-19 pandemic on the Variable Frequency Drive Market:

The COVID-19 pandemic has slowed the expansion of the facility industry. This is often primarily thanks to nationwide lockdowns that are imposed to stop further spikes in the spread of the disease. Renewable energy, which was growing at a greater pace, was slowed down because of economic contractions, which have resulted in the reduction of power demand from various end-user industries. With the decrease in power demand, it's estimated that there would be very negligible investments from utilities for replacing aging grid infrastructure and new renewable installations.

Market Key Players:

The main players operating in the Variable Frequency Drive Market globally are

1. ABB Ltd. (Switzerland),
2. Siemens AG (Germany), 
3. Rockwell Automation, Inc. (U.S.), 
4. WEG (Brazil), 
5. Yaskawa Electric Corporation (Japan),
6. Eaton Corporation Plc. (Ireland). 
7. General Electric (U.S.), 
8. Emerson Electric Co. (U.S.), 
9. Hitachi, Ltd. (Japan), 
10. Mitsubishi Electric Corporation (Japan), 
11. Schneider Electric (U.S.), 
12. Honeywell International (U.S)

Market Recent Developments:

• In December 2020, Kinetix 5100 was re-launched by Rockwell Automation which is useful in various applications like packaging, converting, print & web, and machines with the availability voltage of 480V.
• In January 2020, ACS880 industrial drives and ACH580 Ultra-Low Harmonic (ULH) HVAC drives launched ABB which is expected to level up the portfolio of the company.