Global variable frequency drives market analysis and insights

The global Variable Frequency Drives (VFD) market estimated at US$23.73 billion in the year 2024 is now projected to grow at a CAGR of 4.80% and reach US$30.46 billion by 2030. The rise in demand for energy-efficient solutions across various industries such as cement, pulp, and paper, chemical, waste & wastewater is expected to drive the variable frequency drives market. VFD application areas include compressors, fans, pumps, conveyors, among others. Compared to conventional motor drives, VFD has greater functionality and operational capabilities.

With urbanization and industrialization on a rise, especially in developing countries, an increasing number of residential and commercial buildings are expected to come up, increasing usage of cement, variable frequency drive is used in the cement industry, and with this rise, its demand is also expected to boost.

Increasing demand for HVAC installation is further expected to boost the market. The use of high-performance HVAC equipment can lead to 10%–40% of energy savings. Thus, a rise in demand for smart homes is expected to increase demand for HVAC systems and thus, VFD.

Variable frequency drives have seen a rise in demand due to the increasing use of digitization, connectivity, and automation in industrial processes across a wide range of industries. The Industrial Internet of Things (IIoT) and other cutting-edge technologies are also being researched and developed by many industrial participants. Predictive and efficient machinery optimization and maintenance are just a few of the many benefits that can be gained with the use of advanced variable frequency drives.

Also, various governments have enabled energy-efficiency standards for industrial products such as pumps, compressors, electric motors, among others. Thus, with the rising number of stringent regulations surrounding energy efficiency across various industries and industrial products, demand for variable frequency drives is bound to increase.

Variable frequency drives market regional insights

North American variable frequency drives market is expected to grow significantly over the forecast period. This growth can be attributed to the presence of key OEMs. Besides, high potential for electronics manufacturing such as wafers, chips and power modules is widening growth prospects. Additionally, the market is also driven by extensive applications across the oil & gas segment. U.S. contributed around 78% of the total North American variable frequency drives market and is estimated to have a market value of US$6.56 billion in the year 2024. Among the other noteworthy geographic markets are Canada and Mexico, each forecast to grow at 4.21% and 2.94% respectively over the 2024-2030 period.

Asia-Pacific variable frequency drives market is anticipated to witness an upsurge owing to the rapid urbanization and industrialization in the region. In addition, the several government regulations and initiatives to reduce power consumption are supporting the growth of the variable frequency drives market. China is expected to dominate the Asia-Pacific market and reach a market size of US$5.75 billion by 2030.

Within Europe, Germany, Italy and France are the key countries responsible for the significant growth of the regional market. Germany is expected to grow at a fastest CAGR of 4.93% over the forecast period.

Meanwhile, the Middle East & Africa is expected to show limited growth due to the strong presence of under-developed countries in Africa who are still struggling to meet technology standards. However, any growth that the region experiences is expected to come from developing Gulf Cooperation Council nations such as Qatar, U.A.E, Saudi Arabia and Oman due to a similar growth pattern as the Asia Pacific.

Key players

Key players profiled in the report include ABB Ltd.; CG Power and Industrial Solutions Ltd.; Danfoss A/S; Eaton Corporation PLC; Emerson Electric Co; Fuji Electric Co., Ltd.; General Electric Co; Hitachi Hi-Rel Power Electronics Pvt. Ltd.; Nidec Corporation; Regal Beloit; Rockwell Automation, Inc.; Schneider Electric SA; Siemens AG; TMEIC Corporation; TECO Electric & Machinery Co., Ltd.; WEG SA; Yaskawa America, Inc., among others.

Competitive landscape

October 2022 – SFC Energy AG, a leading supplier of hydrogen and methanol fuel cells for stationary and mobile hybrid power solutions, secured another follow-up order from a Canadian oil producer for the supply of fully integrated frequency converters (VFDs). The order amounts to more than CAD 5.3 million and will be fully recognized in sales and earnings in fiscal year 2023. Already in October 2022, the customer from the Canadian province of Alberta ordered VFDs from SFC Energy with a total value of more than CAD 10 million.

August 2022 – ABB has signed an agreement to purchase Siemens’ low-voltage NEMA motor business. With manufacturing operations in Guadalajara, Mexico, this acquisition provides a well-regarded product portfolio; a longstanding North American customer base; and an experienced operations, sales and management team. The business employs around 600 people and generated revenues of approximately $63 million in 2021. Financial terms of the transaction were not disclosed. The transaction is expected to close in the second quarter of 2023.

Global variable frequency drives market scope

• By type
  • AC drives
  • DC drives
  • Servo drives

• By power range
  • Micro power
  • Low power
  • Medium power
  • High power

• By component
  • Controller/rectifier
  • DC bus
  • Inverter
  • Control board
  • Input/output filter
  • Braking unit
  • Others

• By application
  • Pumps
  • Compressors
  • Fans
  • Blowers
  • Conveyors
  • Lifts and escalators
  • Others

• By end-use industry
  • Energy & Power
  • Oil & gas
  • Manufacturing
  • Construction
  • Automotive
  • Railway
  • Others

• By Region
  • North America
  • South America
  • Europe
  • Asia Pacific
  • Middle East and Africa

The research report  provides a comprehensive review of market trends, market growth drivers, PEST Analysis, Market growth inhibitors, and strategic industry activities and SWOT Analysis of key players in the market.

The report provides market estimates and forecast for geographic markets such as the North America (US, Canada, Mexico and Rest of North America), South America (Brazil, Argentina and Rest of South America), Europe (Germany, France, U.K., Russia, Italy, Spain, Sweden, Netherlands, Poland, Austria, Norway, Switzerland, Denmark and Rest of Europe), Asia-Pacific (China, Japan, South Korea, Taiwan, India, Australia and Rest of Asia-Pacific), Middle East (Iran, Turkey, Kuwait, UAE, Israel and Rest of Middle East) & Africa.