High Power AC Drives to Grow at 5.7% Annually

July 1, 2003
Dedham, Massachusetts: The worldwide market for high power AC drives is expected to grow at a Compounded Annual Growth Rate (CAGR) of 5.7 percent over

Dedham, Massachusetts: The worldwide market for high power AC drives is expected to grow at a Compounded Annual Growth Rate (CAGR) of 5.7 percent over the next five years. The market was a little over $2.5 Billion in 2002 and is forecasted to be around $3.3 Billion in 2007, according to a new ARC Advisory Group Study.

The need to reduce mounting energy costs is acting as the single most important driver in the worldwide high power AC drives market. "Increasing energy prices are compelling users to seek equipment, operating methodologies, and technologies that help them minimize energy consumption and save on energy costs." according to ARC Senior Analyst Himanshu Shah ([email protected]) the co-author of High Power AC Drives Worldwide Outlook. He further added, "High power AC drives are favorably placed as they pay back their costs relatively quickly."

Market Developments and Trends

High power AC drive suppliers, whose growth prospects are constrained by weak global economic conditions, found it expedient to expand market shares through acquisitions and mergers. This development indicates the resolve of suppliers to explore ways of addressing market challenges.

The services component comprising of engineering, installation, and maintenance and such other services has emerged as contributing significantly to revenues of high power AC drives. According to the study, this trend will further strengthen.

Europe, largely driven by the Eastern European economies, continues to be the largest market for high power AC drives. The energy conservation legislation of many European countries also aids the growth of high power AC drives business. While North America is a distant contender, Asia lives up to the reputation of emerging as a promising growth market. The market benefited from investments in industrial segments such as oil & gas pipe-lines, power, and water & wastewater.

Companies find it relatively attractive to incur the capital expenditure on high power AC drives because of its tangible energy saving potential and the market is set to grow. Mr. Shah continued, "the long-term outlook for the high power AC drives market looks positive despite the current state of the global economy." High power AC drives, states the study, is a mature product by technological standards, offering an attractive return on investment with practically no attendant risk, is widely applied, and this spurs the growth.

Further information on this study can be found at: http://www.arcweb.com/research/auto/acdriveshi-ww.asp

Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. Further information can be obtained from ARC, at www.ARCweb.com.