The global frequency converter market size was valued at USD 21.02 billion in 2022. It is estimated to reach USD 31.72 billion by 2031, growing at a CAGR of 4.68% during the forecast period (2023–2031).
Frequency converters or frequency changers are electromechanical devices used to modify the frequency of alternating current (AC) from one to another. It is a power conversion device that transforms sine-wave or line power with a fixed frequency and voltage into variable frequency and variable voltage output. The device may also alter the voltage, but if it does, it is not its primary function, as voltage conversion of alternating current is much simpler to achieve than frequency conversion.
Power-handling capacities of frequency converters range from a few volts to megawatts. They use a combination of semiconductors and diodes to facilitate the correct frequency adjustment. The primary function is to control the process's speed, torque, and temperature without a separate controller and reduce the electrical and mechanical stress on the apparatus and its subcomponents. It reduces equipment maintenance costs and eliminates the need for extra throttle valves and dampers.
The construction industry is witnessing increased growth in the Middle East region. The United Arab Emirates and Qatar are the most attractive nations for infrastructure investment worldwide. Likewise, Saudi Arabia is anticipated to expand during the foreseeable future. The trends above and infrastructure investments in developed nations are anticipated to increase the demand for frequency converters in the region.
Additionally, increased crude oil production and government initiatives to diversify the economy are anticipated to boost construction industry investments in the UAE. The development of infrastructure and the expansion of the construction industry will be significant growth drivers for the construction market. Investments in constructing drainage networks, sanitation systems, and alternate water sources, including seawater desalination and wastewater recycling, are also rising in Gulf countries. All these developments are expected to boost the market growth during the forecast period.
The demand for frequency converters is expected to rise due to increased automation in the automotive industry. The ongoing research and testing on autonomous vehicles require frequency converters. Hybrid vehicles are equipped with frequency converters to manage alternating current transmission. In addition, energy storage or supply devices vary their output voltage based on demand or state of charge, and the high voltage of the DC-link poses significant challenges for vehicle designers when integrating energy storage or supply devices with a traction drive.
Frequency converters can interface elements in an electric train by boosting or reducing the voltage levels. Due to automotive constraints, the power converter structure, including frequency converters, has to be reliable and lightweight with less volume and high efficiency, low electromagnetic interference, and low current/voltage ripple.
The major challenges in the construction industry include cost pressure, labor shortage, and low productivity due to the COVID-19 pandemic. In 2020, the industry witnessed variations due to trade issues, low production, and declining activities due to COVID-19 across geographies. With disrupted construction activities, vendors in the construction sector are expected to witness a 13%–17% decline in revenues in the fiscal year 2021.
Wind power is a rapidly surging renewable energy source, including onshore and offshore wind power. In terms of demand, offshore wind technology is expected to have higher opportunities during the forecast period. The use of frequency converters in offshore wind generation is increasing globally. Offshore wind power capacity is expected to witness higher demand as offshore wind power prices fall and global capacities increase.
Frequency converters are located in the nacelle of wind turbines, and the turbines are linked in series on the AC/DC converter's output side. Frequency converters include an induction machine, a 3-phase AC to single-phase AC converter, a high-frequency, high-power transformer, and other components. Renewable power is a low-cost climate and decarbonization solution, aligning short-term economic needs with medium- and long-term sustainable development goals. Therefore, globally, offshore capacities have increased. As a result, the demand for frequency converters in offshore wind power generation is anticipated to increase.
The global frequency converter market is segmented by product type, sales channel, power output, and end-user
Based on product type, the global frequency converter market is bifurcated into rotary and static converters.
The static converter segment dominates the global market and is projected to exhibit a CAGR of 5.22% over the forecast period. Certain static frequency converters have low installation costs and are not bulky. They also occupy less space and produce low noise compared to mechanical converters with heavy machinery and a wide variety of voltage for static frequency converters with great control due to their independence of voltage power supply variations. Static frequency converters feed loads that require AC power at a fixed frequency.
With the help of DC transformation, the static frequency converter delivers the required power under fixed conditions in any manufacturing unit or commercial application. Static frequency converters are used to supply voltage and load variations. The output frequency depends on elements that control the on/off static frequency converters. Therefore, static converters are independent of frequency and AC voltage fluctuations. Static frequency converters also work independently of load variations.
Based on sales channels, the global frequency converter market is divided into indirect and direct sales channels.
The direct sales channel segment is the largest revenue contributor to the market and is expected to exhibit a CAGR of 4.89% over the forecast period. Consumers can purchase goods directly through direct sales channels from vendors in the frequency converter market. Many customers choose to do business directly with vendors to avoid the additional costs associated with using sales channels involving dealers and distributors. Operations costs can be decreased through strategic alliances between vendors, OEMs, and system integrators. Therefore, the main players in the frequency converter market's overall value chain are original equipment manufacturers and system integrators.
Direct channels are pricey and frequently require a sizable capital investment. As a result, it is anticipated that new players in the frequency converter market will rely more on indirect sales channels, leading to a decline in the use of direct sales channels.
Based on power output, the global frequency converter market is divided into 5-40 KW, <4 KW, 41–200 KW, 201–600 KW, and >600 KW.
The 5-40 KW segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 4.40% over the forecast period. The frequency converter market has various converters classified between the range mentioned above. Power output based on kW (kilowatt), starting torque, and efficiency are the most important factors that end-user industries consider while purchasing frequency converters. The availability of higher torque and higher efficiency at a lower cost is what buyers are looking for.
Based on end-user, the global frequency converter market is segmented into food and beverage, aerospace and defense, HVAC, pharmaceutical, marine, metal and mining, chemicals, oil and gas, power generation, packaging, cement, textile, water and wastewater, paper and pulp, rubber and plastic, forestry and woodwork, and others.
The metal and mining segment owns the highest market share and is estimated to exhibit a CAGR of 3.83% during the forecast period. In several applications, the metal industry uses many power electronics, including frequency converters. Metal product manufacturing involves several steps, from raw material handling to storage. Many large motors use frequency converters, and the speed is continuously adjusted as needed. Traditionally, the metal and mining industry was dominated by DC motors, which are now replaced by AC motors to attain high efficiency and reduce power consumption. Due to the significantly rising use of AC motors, the demand for AC drives or frequency converters is also increasing extensively. Moreover, large operators in the metal and mining industry are making huge investments in the frequency converter market to achieve improved reliability, lesser energy costs, and increased automation and mechanization.
Asia-Pacific Dominates the Global Market
Based on region, the global frequency converter market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
Asia-Pacific is the most significant global frequency converter market shareholder and is anticipated to exhibit a CAGR of 5.61% during the forecast period. Asia-Pacific holds a dominant position in the global frequency converter market due to the presence of leading manufacturing companies, a rapidly growing industrial sector, and significant developments in emerging countries. Several industries fueling the demand and revenue generated from the frequency converter market include chemical metal & mining, textiles oil and gas, and F&B. Activities including manufacturing, construction, power generation, and mining are propelling the growth of the frequency converter market in Asia-Pacific with the continued adoption of industrial automation in the region.
Additionally, urbanization and industrialization in emerging nations like India have increased the demand for vehicles, thereby boosting the demand for frequency converters in the automotive industry. Moreover, investments and expansions by vendors in Asia-Pacific's emerging nations are key growth strategies. Hence, the sale of frequency converters is expected to spike during the forecast period.
Europe is predicted to exhibit a CAGR of 4.28% over the forecast period. The primary factors responsible for the demand for frequency converters in the region can be attributed to strict government regulations and initiatives to save energy. Due to strict government regulations, all industries are compelled to use frequency converters with their motors, boosting the demand for frequency converters in the region. Europe is the most prominent importer of frequency converters, and over one-third of the motors sold in Europe are imported. This means that despite the region's low production of motors, huge demand from industries still exists.
Despite having the second-largest market share globally for frequency converters, Europe is predicted to grow slowly over the next few years. This is due to maturing industries in Europe that are investing in emerging countries due to low labor costs and improved raw material availability. Europe is losing market share to the Asia-Pacific manufacturing sector due to intense competition from that region.
In North America, the highly established F&B industry, huge growth potential in shale oil gas production, the still-growing US economy, and a prosperous Canadian economy are expected to boost the demand for frequency converters. In the manufacturing sector of North America, frequency converters are used across several applications, including pumps, conveyors, compressors, fans, mixers, grinders, and other material handling equipment. The production of unconventional fuels such as shale and tight oil completely changed North America's oil and gas industry dynamics. In addition, the US holds over one-third of North America's frequency converter market and significantly contributes to the global frequency converter market. However, despite the substantial establishments in end-user industries, North America is still behind Asia-Pacific and Europe regarding the revenue generated from the frequency converter market. This is majorly due to a lack of regulations on energy conservation and shifting investments in the industrial sector in Asia-Pacific.
Latin America accounts for the second lowest global frequency converter market share. Owing to rapid industrialization and urbanization, the market is projected to flourish at a substantial rate. However, Latin America's presence in the global frequency converter industry is considered weak. The market is expected to witness fluctuations in growth during the forecast period because of industrial advancements and challenges in residential, commercial, and other industrial developments. These problems will have a short-term impact on market development due to COVID-19 and its restrictive effects.
The Middle East and Africa region is expected to make the lowest contribution to the global frequency converter market during the forecast period, with slow growth in certain industrial sectors. The region is a hub for some of the world's biggest oil and gas-producing countries. The regional oil and gas industry is expected to generate the highest demand for frequency converters during the forecast period.
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