AC Drive Market to Reach $5 Billion

The worldwide market for high-power AC drives exceeded $3.2 billion in 2004 and it is expected to grow at a compounded annual growth rate (CAGR) of 8.9 percent over the next five years, according to a study by ARC Advisory Group (www.arcweb.com). ARC says the upswing was driven by strong global economic growth and buoyant consumer demand, as manufacturing companies in a variety of industries invested heavily in capital equipment to upgrade existing plants to create additional manufacturing capacity. The study, titled High Power AC Drive Worldwide Outlook, says escalating energy costs experienced in recent years has forced manufacturers to focus on energy conservation measures. Increased energy costs have spurred the use of high-power AC drives, particularly in energy intensive industries such as cement, chemical, and metals & mining. "With energy costs increasing and drive prices falling, the payback period is becoming shorter, helping users to justify capital expenditures on AC drives," says Himanshu Shah, a senior analyst with ARC and co-author of the study, in a prepared statement. According to the study, users today are demanding comprehensive solutions with an emphasis on total lifecycle cost, productivity, and return on assets (ROA). Likewise, responding to user demand for such solutions, global suppliers are bundling high power AC drives with a broader range of services such as higher levels of pre- and post-sale technical support including equipment installation, project commissioning, product training, and maintenance services. Suppliers are also developing collaborative partnership arrangements with OEMs that manufacture driven equipment such as compressors, fans, and pumps to reduce system total cost of ownership (TCO). ARC’s study provides an analysis and forecast of various geographic and industrial market segmentations, supplier market shares, and supplier company profiles. The study also addresses the impact of compliance with international standards on suppliers. — Flow Control Staff