AC Drives Market

Investments in manufacturing and process industries in developing countries

There is increasing investment in manufacturing and process industries in developing countries such as India and China. Manufacturing and process industries have emerged as high-growth sectors in developing countries such as India and China. Between April 2000 and June 2021, cumulative FDI inflows into manufacturing subsectors were US$ 100.35 billion, according to the Department for Promotion of Industry and Internal Trade (DPIIT). China is the world's largest manufacturer in terms of output. The services industry, agriculture, manufacturing, and technology are the primary sectors and industries fueling China's growth.

The manufacturing and process industries transform goods, materials, or substances into new products. Various electric components and equipment are installed based on industry type, operation mode, and voltage level requirements. AC drives are commonly used in the process and manufacturing industries to increase equipment efficiency. They are one of the most effective tools managers use to control a facility’s energy use. They help in reduce machine expenses and require much less maintenance. This leads to increased application of AC drives in manufacturing and process industries around the globe.

Rising need for energy efficiency

Electric motors account for nearly 70% of all industrial electrical energy consumption. Pumps that move fluids, fans that move air, compressors, conveyors, and any other equipment that relies on rotational force to function are all powered by these motors. The number of magnetic poles incorporated into most motors, as well as the supplied supply voltage and frequency, determine how fast they spin. They are unable to alter their pace. Even with fixed speed systems, finding a motor that rotates at the correct speed for the application might be problematic.

AC drives provide effective speed control of AC motors by changing voltage and frequency. The controlled speed of a motor gives users improved process control, less wear on machines, increased power factor, and substantial energy savings. AC drives offer good speed controls and high energy savings. The uncertainties in oil supply and the fluctuating prices of conventional fuels lead to a rising need for energy efficiency. The rising need for energy efficiency in various industries creates demand for AC drives. 

Industrial Internet of Things (IIoT)

IoT drives operational efficiencies through automation, connectivity, and analysis and has become popular among the electrical, automation, and manufacturing industries. The Internet of Things (IoT) offers new opportunities for the players involved in the AC drives the market. Modern AC drives with embedded PLCs perform local level tasks to self-optimize, saving time in setting up and commissioning. Obtaining data in real-time makes it easier for OEMs to make recommendations to the end user for machine setup. OEMs can use the data from their machines to influence the design of future equipment.

Intelligent AC drives provide a cost-effective way of bringing the latest high-performance technology into organizations.

The Global AC Drives Market Industry is poised for substantial growth in the coming years. Projections indicate that the market will expand from 27.6 USD Billion in 2024 to 67.3 USD Billion by 2035, reflecting a compound annual growth rate of 8.44% from 2025 to 2035. This growth trajectory is driven by various factors, including increased energy efficiency demands, technological advancements, and regulatory support for energy conservation. As industries continue to adopt AC drives for enhanced performance and sustainability, the market is expected to flourish, presenting opportunities for manufacturers and stakeholders.

The Global AC Drives Market Industry is significantly influenced by the trend towards industrial automation. As industries seek to enhance productivity and reduce labor costs, the adoption of automated systems becomes imperative. AC drives are integral to automation, providing precise control over motor speed and torque. This capability facilitates smoother operations in manufacturing processes, thereby improving overall efficiency. The ongoing shift towards smart factories and Industry 4.0 initiatives further propels the demand for AC drives, as they are essential components in automated machinery and equipment.

The Global AC Drives Market Industry experiences a notable surge in demand for energy-efficient solutions. Industries are increasingly adopting AC drives to optimize energy consumption, thereby reducing operational costs. For instance, the integration of AC drives in HVAC systems has demonstrated energy savings of up to 30 percent. As organizations strive to meet sustainability goals, the market is projected to reach 27.6 USD Billion in 2024. This trend indicates a growing awareness of energy efficiency, which is likely to drive the adoption of AC drives across various sectors, including manufacturing and commercial applications.

The Global AC Drives Market Industry is witnessing a growing emphasis on renewable energy sources. As the world transitions towards sustainable energy solutions, AC drives are increasingly utilized in renewable energy applications, such as wind and solar power generation. These drives play a crucial role in optimizing the performance of renewable energy systems by ensuring efficient energy conversion and management. The integration of AC drives in renewable projects not only enhances operational efficiency but also supports global efforts to reduce carbon emissions. This trend is likely to bolster the market as investments in renewable energy continue to rise.

Government regulations aimed at promoting energy conservation are driving the Global AC Drives Market Industry. Many countries are implementing stringent energy efficiency standards that encourage the adoption of AC drives in various applications. For instance, regulations mandating the use of energy-efficient motors and drives in industrial settings are becoming more prevalent. This regulatory landscape not only fosters a favorable environment for market growth but also aligns with global sustainability initiatives. As industries comply with these regulations, the demand for AC drives is expected to rise, contributing to the overall market expansion.

Technological innovations play a pivotal role in shaping the Global AC Drives Market Industry. The introduction of advanced features such as IoT connectivity and predictive maintenance capabilities enhances the functionality of AC drives. These innovations enable real-time monitoring and control, leading to improved performance and reliability. For example, the integration of AI algorithms in AC drives allows for adaptive control strategies that optimize motor performance. As these technologies evolve, they are expected to contribute to the market's growth, with projections indicating a rise to 67.3 USD Billion by 2035, reflecting a robust CAGR of 8.44% from 2025 to 2035.

Major market players’ growth depends on market conditions, government support, and industry development. Thus, the vendors should focus on expanding geographically and improving services. Many global, regional, and local vendors characterize the AC Drives market. The market is highly competitive, with all the players competing to gain market share. Intense competition, rapid advances in technology, frequent changes in government policies, and environmental regulations are key factors that confront market growth. The vendors compete based on cost, product quality, reliability, and government regulations. Vendors must provide cost-efficient, high-quality products to survive and succeed in an intensely competitive market.

Siemens is a global engineering and manufacturing company specializing in electrification, automation, digitalization, innovation, and technology. It provides engineering solutions in automation and control power AC drivers, transportation, and medical diagnosis. The company offers various products and services in drive technology, energy, financing, healthcare, industrial automation, mobility, services, software, and consumer products sectors. It is considered the world’s largest producer of energy-efficient and resource-saving technologies and a leading provider of power generation and medical diagnostic equipment. Siemens has a global presence in about 200 countries worldwide and operates through 289 production houses, manufacturing facilities, and R&D centers.

The company’s business operations are segmented into six major categories: digital industries, smart infrastructure, gas & power, mobility, Siemens Healthineers, and Siemens Gamesa Renewable Energy.

ABB Group (ABB) has various segments, including electrification products, robotics & motion, Stationary automation, and AC driver segments. The company’s product offering includes control room solutions, drives, PLC automation, robotics, semiconductors, motors & generators, metallurgy products, PAFC & DMFC voltage products, robotics, transformers, and mechanical power transmission. ABB is the world's leading supplier of AC and DC low-voltage drives and high-power, medium-voltage drives, with a product portfolio of drive systems that extends across a large power range, from 100 watts to 100 megawatts. ABB VFD drives are developed, manufactured, and sold by ABB Group, it is a famous brand VFD.

It is mainly used to control and adjust the three-phase AC motor's speed). The company is also developing low voltage AC drives with built-in features to adjust the speed and torque of standard AC motors with advanced technology. The company operates in 100 countries across the Americas, Europe, Asia, the Middle East, and Africa.