China High-voltage Inverter Industry Report, 2011-2012

An inverter is a device which makes motors operate at variable speed to save energy. Customarily, a motor with a rated voltage of 3-10kV is known as a high-voltage motor, so an inverter developed for the motor running in the 3-10kV environment is known as a high-voltage inverter. Compared with low-voltage inverters, high-voltage inverters are applied to high-power wind power and water pumps to archive significant energy saving effects.

As the demand for energy saving and environmental protection increases and the equipment upgrading speeds up, China’s high-voltage inverter industry has achieved steady growth, the market size has increased from RMB1.1 billion in 2005 to RMB6.3 billion in 2011, with the compound annual growth rate of 35.4%. The proportion of high-voltage inverters in inverters rose from 12.9% in 2006 to 22.8% in 2011. In 2012, with the penetration of inverter in downstream industries, the high-voltage inverter market is expected to grow at a rate of 34.92%.

China’s high-voltage inverter industry has the following characteristics:

The price war ends, and the profitability tends to stabilize

After years of price war, the current price of high-voltage inverter is about RMB620 / watt, and the gross margin is about 30%. In this case, new entrants do not have driving force. At the same time, the downstream demand grows stably. The price war in this industry is expected to end and the profitability will stabilize.

Foreign brands have distinct advantages

Foreign brands occupy around 80% market share because of advanced technology and early entry. In 2011, Germany Siemens, Switzerland ABB and France Converteam ranked top three with the total share of 60.5%, indicating a relatively high industry concentration degree. Beijing Leader & Harvest ranked fourth with 7.2%. In June 2011, Schneider Electric acquired Beijing Leader & Harvest for USD650 million, so the latter is regarded as a foreign brand.

High-voltage inverters are used in power and metallurgy most widely

High-voltage inverters are mainly used in power, metallurgy, coal, petrochemicals, cement, paper-making, municipal fields and traffic; particularly, power, metallurgy and cement make use of the majority of high-voltage inverters, accounting for 53.9% totally in 2011.

High-performance high-voltage inverters become the main direction High-voltage inverters can be broken down into general-purpose and high-performance ones. In the general-purpose high-voltage inverter market, domestic enterprises hold more than 80% market share; they compete with each other intensely; in recent years, the price has declined sharply, and the gross margin has been around 34.5%. In the high-performance high-voltage inverter market, foreign brands still take dominant positions, and the gross margin reaches about 63.4%. In the future, domestic enterprises will focus on high-performance high-voltage inverters.

Please Note: PDF E-mail from Publisher purchase option allows up to 10 users and does not allow printing or editing. This functionality will require a Global Site License.