Variable Frequency Drive Market

Rapid industrialization and increased use of VFDs are driving the market growth

The rise of automation in the manufacturing sector has driven the growth of the market CAGR. 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, 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 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 expenses, and improves productivity, thus encouraging various oil and gas companies to incorporate VFDs.

Additionally, the advent of investments from the major utilities in the industrial and commercial infrastructure to mitigate power wastage and improper usage of power had propelled the Variable Frequency Drive market growth. The rising installation of HVAC systems to maintain the temperature in buildings also augments the deployment of Variable Frequency Drives in the building communities.

The emergence of the Internet of Things (IoT) has revolutionized the industrial sector with the advent of smart machines. IoT also increased the usage of automated equipment like Variable Frequency drives that are connected to the internet. This enables the user to monitor and control the process remotely or perform testing and avoid any unexpected downtime before occurrence. 

Remote operation helps consumers in managing operations more effectively. The growing demand for electricity and an increasing number of industries combine to fuel the growth of the power sector. These factors constantly drive the Variable Frequency Drive market revenue.

The Global Variable Frequency Drive Market Industry is projected to experience substantial growth over the coming years. With a market value anticipated to reach 15.6 USD Billion in 2024, the industry is set to expand further, driven by various factors such as energy efficiency demands and technological advancements. By 2035, the market could potentially reach 26.8 USD Billion, reflecting a compound annual growth rate of 5.06 percent from 2025 to 2035. These projections indicate a robust trajectory for the VFD market, underscoring its importance in modern industrial applications.

The ongoing trend towards industrial automation is a key driver of the Global Variable Frequency Drive Market Industry. As industries strive for increased productivity and efficiency, the integration of automation technologies becomes essential. VFDs are integral to automated systems, providing precise control over motor speeds and enhancing overall system performance. This shift towards automation is particularly evident in sectors such as manufacturing and logistics, where VFDs facilitate smoother operations. Consequently, the market is poised for substantial growth, with a projected valuation of 15.6 USD Billion in 2024, as more industries embrace automation.

Technological innovations play a pivotal role in shaping the Global Variable Frequency Drive Market Industry. Recent advancements, such as the integration of IoT and AI technologies into VFD systems, enhance operational efficiency and predictive maintenance capabilities. These innovations allow for real-time monitoring and control, which can lead to improved performance and reduced downtime. As industries increasingly recognize the benefits of these advanced VFDs, the market is projected to grow, potentially reaching 26.8 USD Billion by 2035. The continuous evolution of technology in this sector suggests a promising future for VFD adoption.

The Global Variable Frequency Drive Market Industry is witnessing a surge in demand for energy-efficient solutions across various sectors. Industries are increasingly adopting variable frequency drives to optimize energy consumption, thereby reducing operational costs. For instance, in manufacturing, the implementation of VFDs can lead to energy savings of up to 50 percent. This trend is expected to contribute significantly to the market's growth, with projections indicating a market value of 15.6 USD Billion in 2024. As organizations strive to meet sustainability goals, the adoption of VFDs is likely to accelerate, driving the market further.

The expansion of renewable energy sources is significantly impacting the Global Variable Frequency Drive Market Industry. As the world transitions towards sustainable energy solutions, the demand for VFDs in renewable energy applications, such as wind and solar power, is on the rise. VFDs are crucial for optimizing the performance of renewable energy systems by managing variable speeds and ensuring efficient energy conversion. This trend is likely to bolster the market, with projections indicating a market value of 26.8 USD Billion by 2035. The increasing focus on renewable energy integration suggests a robust future for VFD technologies.

Government regulations aimed at promoting energy efficiency and reducing carbon emissions are significantly influencing the Global Variable Frequency Drive Market Industry. Many countries are implementing stringent energy efficiency standards, which compel industries to adopt VFDs to comply with these regulations. Additionally, various incentives and subsidies are offered to organizations that invest in energy-efficient technologies. This regulatory landscape not only fosters the adoption of VFDs but also enhances market growth. As a result, the market is expected to experience a compound annual growth rate of 5.06 percent from 2025 to 2035, reflecting the impact of these policies.

By Region, the study provides market insights into North America, Europe, Asia-Pacific, and the Rest of the World. The Asia-Pacific Variable Frequency Drive Market area will dominate this market; rapid industrialization among emerging economies, supportive business policies by the government, and increasing construction activities will boost the market growth in this Region. Moreover, China’s Variable Frequency Drive market held the largest market share, and the Indian Variable Frequency Drive market was the fastest-growing market in the Asia-Pacific region.

Further, the major countries studied in the market report are The U.S., Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure2: Variable Frequency Drive Market Share By Region 2022 (%)

Source: Secondary Research, Primary Research, Market Research Future Database, and Analyst Review

Europe's Variable Frequency Drive market accounts for the second-largest market share due to the rising energy demand is expected to increase the adoption of VFD from energy producers, which is expected to support regional growth. Further, the German Variable Frequency Drive market held the largest market share, and the UK Variable Frequency Drive market was the fastest-growing market in the European Region.

North America is expected to grow at the fastest CAGR from 2023 to 2032. This is due to increasing demand from various end-use industries such as cement, pulp, and chemicals is expected to support the VFD market growth in this Region.

Leading market players invest heavily in research and development to expand their product lines, particularly in AC drive industrial applications, which will help the variable frequency drive market to grow even more. Market participants are also undertaking various strategic activities to expand their footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. The variable frequency drive industry must offer cost-effective items to expand and survive in a more competitive and rising market climate.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturer’s uses in the Variable Frequency Drive industry to benefit clients and increase the market sector. The Variable Frequency Drive industry has offered some of the most significant advantages in recent years. 

Major players in the Variable Frequency Drive market are ABB Ltd. (Switzerland), Siemens AG (Germany), Rockwell Automation, Inc. (U.S.), WEG (Brazil), Yaskawa Electric Corporation (Japan), and Eaton Corporation Plc. (Ireland). General Electric (U.S.)., and others are attempting to increase market demand by investing in research and development operations.

Rockwell Automation, Inc. is an American provider of industrial automation whose brands include Allen-Bradley, FactoryTalk software, and LifecycleIQ Services. Headquartered in Milwaukee, Wisconsin, Rockwell Automation employs approximately 26,000 people and has customers in more than 100 countries worldwide. 

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.

Mitsubishi Electric Corporation, established on 15 January 1921, is a Japanese multinational electronics and electrical equipment manufacturing company headquartered in Tokyo, Japan. It is one of the core companies of Mitsubishi. 

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.