Engineering 101

Inverter Industry is Building Momentum for Change

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The inverter market keeps steadily growing, boosted by electrification and CO2 reduction targets. The EV market segment is today driving the development of the inverter industry, with different applications such as charging infrastructure, renewables and energy storage.

With 27% CAGR between 2018 and 2019, this sector is also showing impressive technological innovations that answer the market demand.

Pertaining to this industry, Yole has announced its technology and market report, ‘Status of the Inverter Industry’. This report proposes a comprehensive analysis of the inverter market with a deep understanding of dynamics and their impact across applications, market sectors and regions. Yole’s analysts point out detailed forecasts, technological trends, the related supply chain and especially the competitive landscape with key players and partnerships (horizontal and vertical integration, and recent mergers).

In addition, the report describes the synergies between different market applications: EV, charging infrastructure, renewables and HVDC, and resulting common opportunities are also discussed.

Electrical power-conversion optimization is driven by different factors: for example, electrification trends in transportation, CO2 emission reduction goals, the development of clean electricity sources, and industrialization. The power inverter market follows the big megatrends, and so one could directly link these different markets’ growth with the inverter market’s dynamics.

For a simpler understanding of inverter dynamics, Yole’s power electronics analysts differentiates between two business types:

  • Transport including EV/HEV and rail.
  • Energy with wind, PV, electricity grid, and charging infrastructure.

These segments are often linked to big projects dependent on subsidies and political/governmental decisions Industrial segments including UPS and motor drives, which are less volatile and more linked to electrification.
In the EV/HEV market’s case, tough CO2 targets are pushing automotive OEMs towards high electrification levels in their new vehicle fleets.

“This market is expected to be the main driver for new technology developments, and many supply chain movements are expected over the next few years,” explained Ana Villamor from Yole. “Indeed, the inverter market for EV/HEV is expected grow at an impressive 20.7% CAGR between 2018 and 2024, despite constantly changing subventions.”

On the other hand, the rail market is slowly increasing despite it is a very volatile market, depending directly on government subsidies that might change over a short period.

In the energy segment, clean energy sources continue to be championed worldwide.

“PV installations keep increasing every year with 3.8% CAGR for the 2018-2024 period, even if subsidies in China, the world’s largest PV installer, decreased in 2018,” said Milan Rosina, PhD. Principal Analyst, Power & Wireless at Yole. “The wind market is expected to remain almost steady over the next several years, in number of GWs installed. Meanwhile, the grid segment must continue being deployed, since the world requires more and more energy to be transported efficiently.”

In parallel, the EV/HEV charging infrastructure is growing briskly to anticipate rapid EV market growth. The market research and strategy consulting company Yole, expects that the inverter market for charging infrastructure will grow at a CAGR of 20.5% between 2018 and 2024. Finally, the industrial market depends on the inverter business’s leader: motor drives.

Millions of inverters for compressors, pumps, and other motors were installed during the last few years, and this trend will continue in the future, reaching a motor drive inverter market of $29 billion by 2024. Another growing industrial inverter market is the UPS business, resulting in a growth of 5.6% from 2018 to 2024.

Facing this huge power electronics growth, key players have decided not to miss out on business opportunities. Indeed, over the last three years, many big mergers and acquisitions have been identified by Yole’s analysts. According to Ana Villamor and Milan Rosina, aim was clearly to gain more and more market shares of a single business or diversify business.

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