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China’s expanding economy offers growth for low power AC drives

Dedham, Mass. -- China's growing economy, investment friendly policies, and manufacturing industry that caters to t...


Dedham, Mass. — China’s growing economy, investment friendly policies, and manufacturing industry that caters to the domestic and export markets create an immense growth opportunity for AC drives. China’s low power AC drives market will grow at a Compounded Annual Growth Rate (CAGR) of 10% over the next five years.

The market, around $400 million in 2003, is expected to exceed $600 million in 2008, according to a new study by ARC Advisory Group (www.arcweb.com).

“The global manufacturers in their new plants in China produce goods and equipment for the domestic and worldwide markets. They are compelled to use modern manufacturing technologies to maintain the consistency in products exactly the same as their sister plants outside China, but at a lower cost. This situation is driving up the use of a wide range of automation products including AC drives,” according to Senior Analyst Himanshu Shah (hshah@arcweb.com), co-author of ARC’s Low Power AC Drive Outlook for China.

Market developments and trends

China’s emergence as a leading growth market for low power AC drives stems from investments taking place in new process plants, expansion projects, and production facility upgrades. Sustained demand for a wide range of goods has led to massive investments across a broad spectrum of manufacturing verticals.

Building automation has emerged as the leading user segment of low power AC drives. This outlook study also identifies other industries that will raise the AC drives market to the next plateau.

While large global suppliers dominate this market, regional AC drive suppliers (comprising domestic, Taiwan, and Korean companies) are also thriving with no-frill products. The primary opportunity for these suppliers emerges from price-sensitive users and a wide range of applications for the basic V/F mode of operation.

While large automation suppliers successfully address major project opportunities, the market in China provides an opportunity for all AC drive suppliers in the OEM sector.

China, slated to host the Olympics in the year 2008, is feverishly creating a large infrastructure, resulting in growth opportunities for AC drives suppliers. “Product enhancements, combined with falling prices, have a positive influence on the growth of the low power AC drives market,” says Shah.

ARC’s Low Power AC Drive Outlook for China provides strategic information to make decisions related to low power AC drives business in China. It includes market size and its potential, leading suppliers, key factors that contribute to the market growth, market dynamics, and strategic issues that suppliers face.

Additional information on this study can be found at: www.arcweb.com/res/acdrivelo-chi.