Variable Frequency Drive Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The report covers Global Variable Frequency Drives Market Analysis & Size and the market is Segmented by Voltage Type (Low Voltage and Medium and High Voltage), End-user Industry (Infrastructure, Food Processing, Energy and Power, Mining and Metals, and Pulp and Paper), and Geography.

Variable Frequency Drive (VFD) Market Size

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Variable Frequency Drives Market Summary
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Study Period 2019 - 2029
Market Size (2024) USD 26.64 Billion
Market Size (2029) USD 34.04 Billion
CAGR (2024 - 2029) 5.02 %
Fastest Growing Market Asia Pacific
Largest Market Asia Pacific

Major Players

Variable Frequency Drives Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Variable Frequency Drive (VFD) Market Analysis

The Variable Frequency Drives Market size is estimated at USD 26.64 billion in 2024, and is expected to reach USD 34.04 billion by 2029, growing at a CAGR of 5.02% during the forecast period (2024-2029).

The variable frequency drives used to monitor the speed of motors have gained considerable traction due to their power to optimize energy usage in various industries. Apart from energy efficiency, the popularity of VFDs can also be attributed to their capacity to improve motor life and reduce maintenance by allowing distributed use across the life cycle, relieving it from constant use under the same parameters.

  • The market is characterized by various government directives focusing on making the industrial sector more energy efficient. The HVAC systems, especially chillers, a key deployer of VFD, are increasingly scrutinized by government bodies for their eco-friendliness. They have been regularized with time to comply with the updated policies.
  • Rapid industrialization in emerging economies like China, Japan, India, Brazil, and South Korea has boosted innovations and the adoption of efficient industrial equipment. For instance, according to the National Bureau of Statistics of China, in 2021, China's industrial production increased by about 9.6% compared to the previous year. China aims to achieve an automobile output of up to 35 million units by 2025, from 22.3 million units in 2018. With the recent tax incentives and the 'Made in China 2025' initiative, manufacturing units in the country are expected to increase rapidly. This provides several opportunities for the AMH equipment market in the country.
  • Energy efficiency has been of key focus for federal regulators and industry organizations. According to the International Energy Agency, electric motors consume 40% of the energy used in power industries. When these motors are deployed with VFDs in centrifugal load service, their efficiency increases. Due to the technological improvements in power electronics technology, the performance of VFDs is expected to improve, helping conserve energy.
  • The addition of VFDs in existing motors gives rise to several technical problems, which have created a barrier to adoption among numerous players in various industries. After integrating the drive with an existing motor, the speed of the motor shaft reduces, causing decreased cooling from the shaft-driven fan. The rotors in the VFD motors are very sensitive and can get damaged by frequent spinning, which occurs because of aggressive dynamic braking. When the rotors are stopped this way, the thermal expansion of the rotor produces a force that pulls the rotor shaft away from the stator, leading to bearing failure. This usually occurs when the VSD is not adequately cooled.
  • During the pandemic, the power sector received less traction with the shutting down of offices and the complete halt of activities in the industrial sector. With the reopening of the industries and offices in the post-COVID-19 period, the industry is anticipated to witness increasing demand for energy-efficient devices, creating an ancillary demand for VFDs. The energy and power sector has been exposed to several new regulations post the COVID-19 pandemic, highlighting the need for contingency plans to save energy to move toward a sustainable future. These directives are expected to propel the growth of the market over the forecast period.

Variable Frequency Drive (VFD) Market Trends

This section covers the major market trends shaping the Variable Frequency Drives Market according to our research experts:

Rapid Industrialization and Increased Use of VFDs Across Major Vertical Industries to Drive the Market

  • The rise of automation in the manufacturing sector has driven the growth of the market. For instance, according to the International Federation of Robotics, the annual installation of industrial robots increased from 382,000 in 2019 to 384,000 in 2020. According to the IFR forecasts, global adoption is expected to increase significantly, with 518,000 industrial robots operational across factories worldwide by 2024.
  • A significant trend impacting the market is the focus on smart manufacturing practices. According to the India Brand Equity Foundation (IBEF), the Government of India set an ambitious target of increasing manufacturing output contribution to 25% of the Gross Domestic Product (GDP) by 2025 from 16%. The Smart Advanced Manufacturing and Rapid Transformation Hub (SAMARTH) Udyog Bharat 4.0 initiative aims to enhance awareness about Industry 4.0 within the Indian manufacturing industry and enable stakeholders to address challenges related to automation material handling.
  • With the global impact of Industry 4.0, IoT, and smart manufacturing practices, the manufacturing industry is moving toward automation. VFDs are a right fit with this evolving trend.
  • The market is also witnessing an increased focus on process optimization. A VFD reduces downtime in the oil and gas industry because the gas turbines require frequent maintenance, while VFDs and motors require very little maintenance. This enables more production, lowers maintenance expense, and improves productivity, thus encouraging various oil and gas companies to incorporate VFDs.
  • Focusing on the energy-savings benefits of the VFDs, various governments partnered with manufacturers of VFDs and related products for installation in multiple sectors, which is driving the growth of the market studied. For instance, Danfoss partnered with the Kolkata Metro Rail Corporation (KMRC) and Chennai Metro Rail (CMRL) to offer varied drive solutions.
  • VFDs are being applied to several new applications. Applications with grid interfaces, like frequency converters and pump storage, employ VFDs. New industries like carbon capture, hydrogen generation, and transportation are also anticipated to rely on VFDs.
Variable Frequency Drives Market: Annual Installation of Industrial Robots, Shipment In Thousands Units, Global, 2019-2024

Asia-Pacific is Expected to be the Fastest-growing Market

  • The variable frequency drives market is anticipated to hold a significant share in China, owing to the increasing operations primarily across power generation and the oil and gas industry, along with bold spending toward establishing manufacturing facilities.
  • China's focus on infrastructural expansion has translated into FDI in numerous manufacturing and industrial sectors. Active backing from the Chinese government has empowered a higher number of value-addition industries, achieving overall industry growth, including several Chinese industrial sectors such as wind and solar power, telecommunications, automotive, petrochemical processing, and steel productions, among the top contributors to the progress of its economy. Therefore, these industries have the highest impact on the demand for variable frequency drives. As a result, China continues to be the most profitable market for VFDs.
  • The Indian VFD industry is entering a growth phase with increasing energy prices, leading to a necessity for energy and operational-efficient motor control systems and drives. End-user awareness of surplus drive benefits, such as enhanced process control performance, minimized maintenance requirements, and improved motor and equipment life, stimulate VFD adoption.
  • The market for residential ACs in Japan is one of the largest worldwide. Furthermore, the ownership of ACs in Japan is high due to expectations of thermal comfort and sociocultural preferences. Renewable energy generation in the country is taking place at a humongous rate. This needs to be integrated into the existing national grid, leading to the introduction of additional electrical infrastructure, which may ultimately drive the variable frequency drives industry.
  • There has been continuous regulation enforcement by government bodies within the Asia-Pacific countries in terms of energy consumption in the past few years. This may bring good growth opportunities for the variable frequency drives industry in the next 5-7 years.
Variable Frequency Drives Market - Growth Rate by Region

Variable Frequency Drive (VFD) Industry Overview

The variable frequency drives market is highly competitive due to the presence of many small and large players in the market. The market is observing a growing need for energy-efficient equipment, owing to which international players in the market are rapidly increasing their footprints, and local vendors are finding it difficult to compete with the major players in terms of quality, safety, and price. This factor is boosting the competition in the market. Some of the key players are Eaton Corporation, ABB Ltd, and Honeywell International Inc.

  • April 2022 - ABB introduced the latest compact, fully integrated design medium voltage VFD ACS1000i with an integrated input transformer, input contactor, and auxiliary power supply in response to the space-constrained needs of the water and power industries. The air-cooled ACS 1000i - rated from 315 kW to 1800 kW, voltage classes 3.3, 4.0/4.16, 6.0/6.6 kV - employs a standard drive cabinet with built-in input transformer and input contactor while keeping the compact design of its sister drive, the ACS 1000. The traditional water-cooled ACS 1000 VFD can still be used for higher power levels.

Variable Frequency Drive (VFD) Market Leaders

  1. Eaton Corporation PLC

  2. ABB Ltd.

  3. Crompton Greaves Ltd

  4. Honeywell International Inc.

  5. Rockwell Automations Inc.

*Disclaimer: Major Players sorted in no particular order

Variable Frequency Drives Market Concentration
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Variable Frequency Drive (VFD) Market News

  • April 2022 - Rockwell Automation Inc. launched a new Allen-Bradley Armor Powerflex AC VFD for industrial motor control applications. The newly launched on-machine motor drive provides simple commissioning, predictive maintenance, and quicker installation. This drive helps industrial companies to minimize costs and simplify the machine's design and time to deploy.
  • February 2022 - Mitsubishi Electric Corporation announced the upcoming release of a half-bridge driver high-voltage (600V) integrated circuit (HVIC) with a built-in bootstrap diode (BSD) function, which can aid in reducing the number of parts required in inverter systems. The new HVIC is intended for circuits that drive power semiconductors in low-capacity inverter systems. It will also aid in reducing power consumption in white goods, electric bikes, and other electrical products.

Variable Frequency Drive (VFD) Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Value Chain Analysis

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitutes

      5. 4.3.5 Degree of Competition

    4. 4.4 Technology Snapshot

      1. 4.4.1 By Type

        1. 4.4.1.1 AC Drives

        2. 4.4.1.2 DC Drives

    5. 4.5 Assessment of the Impact of COVID-19 on the Market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Rapid Industrialization and Increased Use of VFDs across Major Vertical Industries

      2. 5.1.2 Growing Demand for Energy Efficiency

    2. 5.2 Market Restraints

      1. 5.2.1 Technical Concerns of the Equipment

      2. 5.2.2 High Cost of the Equipment

      3. 5.2.3 Cybersecurity Apprehensions

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Voltage Type

      1. 6.1.1 Low Voltage

      2. 6.1.2 Medium and High Voltage

    2. 6.2 By End-user Industry

      1. 6.2.1 Infrastructure

      2. 6.2.2 Food Processing

      3. 6.2.3 Energy and Power

      4. 6.2.4 Mining and Metals

      5. 6.2.5 Pulp and Paper

      6. 6.2.6 Other End-user Industries

    3. 6.3 By Geography

      1. 6.3.1 North America

        1. 6.3.1.1 United States

        2. 6.3.1.2 Canada

      2. 6.3.2 Europe

        1. 6.3.2.1 United Kingdom

        2. 6.3.2.2 Germany

        3. 6.3.2.3 France

        4. 6.3.2.4 Rest of Europe

      3. 6.3.3 Asia-Pacific

        1. 6.3.3.1 China

        2. 6.3.3.2 India

        3. 6.3.3.3 Japan

        4. 6.3.3.4 Rest of Asia-Pacific

      4. 6.3.4 Latin America

      5. 6.3.5 Middle-East and Africa

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 Eaton Corporation

      2. 7.1.2 ABB Ltd (GE Industrial)

      3. 7.1.3 Crompton Greaves Ltd

      4. 7.1.4 Honeywell International Inc.

      5. 7.1.5 Rockwell Automations Inc.

      6. 7.1.6 Hitachi Group

      7. 7.1.7 Siemens AG

      8. 7.1.8 Mitsubishi Corporation

      9. 7.1.9 Toshiba Corporation

      10. 7.1.10 Schneider Electric SE

      11. 7.1.11 Johnson Controls Inc.

      12. 7.1.12 Nidec Corporation

      13. 7.1.13 Danfoss AS

    2. *List Not Exhaustive
  8. 8. INVESTMENT ANALYSIS

  9. 9. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability
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Variable Frequency Drive (VFD) Industry Segmentation

A variable frequency drive (VFD) is a motor controller that drives an electric motor by varying the frequency and voltage of its power supply. The VFD can also control the motor's ramp-up and ramp-down during start or stop, respectively. Although the drive controls the voltage and frequency of power supplied to the motor, it is often referred to as speed control since the result is a motor speed adjustment. Variable frequency drives (VFD) are used in combination with electric motors to monitor the speed of motors.

The market size for variable frequency drives is evaluated by analyzing different voltage types of VFDs, such as low voltage and medium and high voltage VFDs. The study was also analyzed for various end-user industries, including infrastructure, food processing, energy and power, mining and metals, and pulp and paper, considered in North America, Europe, Asia-Pacific, Latin America, and Middle-East and Africa. The competitive landscape has been taken to calculate the penetration of variable frequency drives and how players involve themselves in organic and inorganic growth strategies. Additionally, these companies continuously innovate their products to increase their market share and profitability. The market study has also focused on the impact of the COVID-19 pandemic on the market's ecosystem.

By Voltage Type
Low Voltage
Medium and High Voltage
By End-user Industry
Infrastructure
Food Processing
Energy and Power
Mining and Metals
Pulp and Paper
Other End-user Industries
By Geography
North America
United States
Canada
Europe
United Kingdom
Germany
France
Rest of Europe
Asia-Pacific
China
India
Japan
Rest of Asia-Pacific
Latin America
Middle-East and Africa
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Variable Frequency Drive (VFD) Market Research FAQs

The Variable Frequency Drives Market size is expected to reach USD 26.64 billion in 2024 and grow at a CAGR of 5.02% to reach USD 34.04 billion by 2029.

In 2024, the Variable Frequency Drives Market size is expected to reach USD 26.64 billion.

Eaton Corporation PLC, ABB Ltd., Crompton Greaves Ltd, Honeywell International Inc. and Rockwell Automations Inc. are the major companies operating in the Variable Frequency Drives Market.

Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).

In 2024, the Asia Pacific accounts for the largest market share in Variable Frequency Drives Market.

In 2023, the Variable Frequency Drives Market size was estimated at USD 25.37 billion. The report covers the Variable Frequency Drives Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Variable Frequency Drives Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

Variable Frequency Drive Industry Report

Statistics for the 2024 Variable Frequency Drive market share, size and revenue growth rate, created by Mordor Intelligenceā„¢ Industry Reports. Variable Frequency Drive analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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Variable Frequency Drive Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)