Preambles: The VFD industry in China has been subject to an increase in the market size over the past few years with, however, declined growth. In 2016, the market size of VFD industry in China was RMB 41.677 billion with an average four-year compound growth rate of 8.74%. It is reckoned from it that the market size of VFD industry of China in 2017 will be around RMB 45.32 billion.
Growth of high-voltage VFD industry overtakes overall market development
The VFD industry in China has been subject to an increase in the market size over the past few years with, however, declined growth. In 2016, the market size of VFD industry in China was RMB 41.677 billion with an average four-year compound growth rate of 8.74%. It is reckoned from it that the market size of VFD industry of China in 2017 will be around RMB 45.32 billion.
Chart 1: Market size and growth of VFD industry in China, 2012 - 2017 (unit: 0.1 billion, %)
![Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v]( "Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v")
The downstream of high-voltage VFDs are mostly high energy-consuming large and medium-sized enterprises who have great demand. Meanwhile, the policies under the trends of environmental protection and energy conservation act as the guidance to Chinese high-voltage VFD market. In addition, the 13th Five-Year Plan highlights also highlights the implementation of the nationwide energy conservation plan. High-voltage VFD are applied in power and other multiple industries. The high-voltage VFD market in China has been maintaining a high growth rate. In 2016, the market size exceeded RMB 10 billion It is reckoned from it that the market size of VFD industry of China in 2017 will be around RMB 45.32 billion with an increase by 15% on a year-on-year basis. It is reckoned from it that the market size of high-voltage VFD industry of China in 2017 will be more than RMB 11.7 billion with a growth rate of over 10%. In combination with the sluggish market of medium and low-voltage VFDs, it can be told that it was the high-voltage VFDs that fuel the overall growth of VFD market.
Chart 2: Market size and growth of high-voltage VFDs in China, 2012 - 2017 (unit: RMB 0.1 billion, %)
![Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v]( "Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v")
Data source: sorted by Qianzhan Industry Academy
The power industry contributes a lot to high-voltage VFD market
High-voltage VFDs conserve energy efficiently in many industries, and this makes power industry the biggest application field of them. Over the past few years, the energy conservation, emission reduction and consumption reduction have been grave. According to the reckoning, the high-voltage VFDs demanded by the power industry account for 25% of the total demand. In 2017, the power consumption of the entire nation has reached 6.3 trillion kWh. Based on the calculation, the demand by the power industry on high-voltage VFDs in 2017 is around RMB 3 billion with a year-on-year growth of 10%. The demand by power industry on high-voltage VFDs acts as one of the sources that promote high-voltage VFD market.
Chart 3: Power consumption of China, 2012 - 2017 (unit: trillion kWh)
![Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v]( "Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v")
Data source: sorted by Qianzhan Industry Academy
Chart 4: Market demand of high-voltage VFDs by power industry, 2012 - 2017 (unit: RMB 0.1 billion)
![Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v]( "Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v")
Data source: sorted by Qianzhan Industry Academy
The market size of VFD industry will keep growing
With the frequent issuance of power industry standards and the development of renewable energy power generation and other sectors, the development of the power industry in China is on a steadier increase, whether from the perspective of national power consumption or power generation. Moreover, the beneficial policies will further enlarge the future market size of power industry, which will in turn rise the demand on high-voltage VFDs.
In recent years, the independent R&D capability of China in VFDs has increased, especially in high-voltage VFDs, of which the amount of patents applied in 2017 is above 160. In the meantime, with the promotion of the real economy, VFDs will gain a foothold in the new energy field and keep increasing steadily in metallurgy, coal, petrochemical and other industrial fields. Based on the background to the rise in urbanization rate, VFDs will also see a further increase in demand in public utilities such as municipal and rail transit fields, and thus the market size is enlarged. It is predicted by Qianzhan that, in a few years, high-voltage VFDs with energy efficiency will keep growing driven by policies, and in 2023, the market size of high-voltage VFDs will reach about RMB 1.75 billion.
Chart 5: Market size prediction of high-voltage VFDs in China, 2018 - 2023 (unit: RMB 0.1 billion)
![Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v]( "Circumstances analysis and prospects of VFD industry in 2018: power sector promotes growth of high-v")
Data source: sorted by Qianzhan Industry Academy
The data above are sourced from the Market Prospect of Chinese VFD Industry and Analysis Report of Investment Strategy, 2018 - 2023 issued by Qianzhan Industry Academy.