Abstract : This paper estimates the market value of inverters in 2006 and analyzes the development trend of inverters. Keywords: Inverter, Market Value, Development In 2006, China's installed generator capacity reached 622 million kilowatts, and its power generation was 2,834.4 billion kilowatt-hours. It is estimated that 60% of the power generation is converted into energy through motors, making motor speed regulation a very important technology. Among the many motor speed regulation technologies, AC motor variable frequency speed regulation stands out as the leader, becoming the central technology of electrical drives. It surpasses any previous speed regulation method in terms of small size, light weight, high precision, large torque, powerful functions, high reliability, high power factor, high resolution, easy operation, and convenient communication. Such as voltage regulation speed regulation, pole changing speed regulation, slip speed regulation, series pole speed regulation, commutator motor speed regulation, hydraulic coupling speed regulation, and even DC motor speed regulation. Therefore, it is widely used in industries such as steel, non-ferrous metals, petroleum, petrochemicals, chemicals, chemical fibers, textiles, machinery, electronics, building materials, coal, pharmaceuticals, papermaking, injection molding, cigarettes, elevators (including escalators), cranes (including port cranes), urban water supply (including sewage treatment), central air conditioning, and household appliances. Besides improving product quality, increasing product output, and reducing losses, it also significantly saves electricity, and its usage is increasing year by year. 1. The estimated market value of the frequency converter industry in 2006 was 28 billion yuan . Of this, frequency converter manufacturers accounted for 18 billion yuan, and companies engaged in frequency converter application development and system integration accounted for approximately 10 billion yuan. 1) The market value of the frequency converter manufacturing industry was approximately 18 billion yuan. There were 21 major frequency converter manufacturers (over 100 million yuan each), with a market value of 13.15 billion yuan, as shown in Table 1. 2) There are approximately 220 frequency converter manufacturers. Excluding the 21 mentioned above, assuming an average sales revenue of 25 million yuan per manufacturer, the total sales revenue is approximately 5 billion yuan. Table 1: Sales Revenue of Major Frequency Converter Manufacturers in 2006. Note: Most of the figures in this table were obtained by phone and from friends, and are only estimates for reference. If there are significant discrepancies between the figures, please contact the author by phone for correction. Among these manufacturers are those with sales exceeding 50 million yuan, or even over 100 million yuan, such as Toshiba, Hitachi, Meidensha, Panasonic, AB, Vacon, KEB, Lenze, Taian, Teco, Jiude Songyi, Adeli, Hekang Yisheng, Zhonghe Shengda, Power Source, Lingke, Siweijia, Leiruoer, Keda, Zhui Ri, Shenyuan, Puchuan, Weineng, Riye, Komron, Anbangxin, Sifang, Yitipulin, Chuanchuan Zhixing, Taifaxing, Delixi, Nanyu, Zhiguang, Lepu Sifang, Xinfengguang, Jialing, Dongfang Hitachi, Rongxin, Jiuzhou, Zhuzhou Converter, etc. 3) There are many companies engaged in the application development (or system integration) of frequency converters, such as energy-saving companies, technology companies, and technology development companies. Each major city has dozens, even hundreds, of such companies. Adding technology to frequency converters significantly increases their added value, with system value-added reaching approximately 30% to 50%. These companies are very active, and some are quite large, such as Kumak in Shenzhen, whose sales reached 140 million yuan in 2006. It is estimated that the sales of frequency converter devices by these companies are no less than 10 billion yuan. Based on the above three points, the estimated sales of the national frequency converter industry are approximately 28 billion yuan. Surrounding industries, such as rectifiers, inverters, capacitors, control boards, and other components used in frequency converter systems, as well as reactors, circuit breakers, contactors, thermal relays, intermediate relays, temperature, pressure, flow, and level sensors, braking units, braking resistors, energy feedback units, tension control, and position control boards (cards), all mutually influence the development of frequency converters. 2. The Development Process of Frequency Converters in China The development of frequency converters in China can be summarized in the following stages. 2.1 Variable Frequency Drive (VFD) Development Stage: This stage began in the late 1970s and mid-1980s. The Tianjin Electrical Transmission Institute (voltage type) and the Xi'an Power Electronics Technology Institute (current type) under the Ministry of Machinery Industry developed products, but their reliability was poor and needed improvement. In the early 1980s, the Dalian Electric Machinery Plant introduced technology from Toshiba of Japan and produced products, which had a certain impact. 2.2 General-Purpose VFD Import Stage: From the mid-1980s to the late 1990s, this period mainly involved the import of foreign VFDs. The earliest were the Japanese Sanken SVF type and the Japanese Fuji G5/P5 type. Beijing and Shenzhen were the first two recommended cities, significantly impacting industries such as steel, petroleum, petrochemicals, chemicals, chemical fibers, and water supply. Subsequently, Mitsubishi, Yaskawa, Toshiba, Panasonic, Meidensha, ABB, AB, Siemens, Danfoss, Lenz, and others entered China, making the application of general-purpose VFDs more widespread. During this period, high-voltage VFDs from Siemens, ABB, AB, Robicon, and CJLEC saw some application. Taiwan's Puchuan, Liaoning No. 1 Factory, Nanjing Automation, Chengdu Jialing, and Shandong Huifeng have all developed domestically produced frequency converters. Tianchuan Institute and the Metallurgical Automation Institute have developed AC-AC frequency converters. 2.3 The Stage of Rapid Development of General-Purpose and High-Voltage Frequency Converters From the late 1990s to the present, it has been a stage of rapid development for general-purpose and high-voltage frequency converters. This stage has four characteristics: 1) All foreign brands entered China, and some even established factories in China; 2) There are more than 170 domestic manufacturers of voltage-frequency converters; 3) In addition to foreign brands, more than 20 companies have emerged in the high-voltage frequency converter market; 4) Both general-purpose and high-voltage frequency converter technologies have improved significantly, becoming more mature and expanding their application areas. 3 Frequency Converter Development ABC 3.1 Foreign Brands Hold the Major Share of the Chinese Market Foreign brands of general-purpose frequency converters entered the Chinese market in the 1980s. Following the Chinese people's tendency to be prejudiced against first-mover advantages, and more importantly, the technological advantages and high reliability of foreign brands, despite their higher prices, they still hold about 80% of the Chinese market. In the high-voltage frequency converter field, the situation is somewhat better, with foreign and domestic brands sharing the market equally. Domestic brands have lower prices, and there are already signs of them gaining market share. 3.2 Foreign Brands Establishing Factories in China: With my country's rapid economic development over the past 26 years, the demand for frequency converters has increased year by year, attracting foreign companies to establish joint ventures or wholly-owned factories in China. Examples include Siemens (Tianjin), ABB (Beijing), Fuji (Wuxi), Sanken (Jiangyin), Robicon (Shanghai), Autonics (Jiaxing), Motorola (Shandong), Yaskawa (Shanghai), Schneider Electric (Suzhou), Kasuga (Xi'an), Hitachi (Nanjing), Eurotherm (Shandong), CT (Shanghai), Emerson (Shenzhen), Kobe (Shanghai), and Bosch Rexroth (Shenzhen). 3.3 Development Towards High Technology: General-purpose frequency converters are evolving from voltage-frequency control to direct torque control (ABB) and intelligent vector control (Fuji, etc.) to achieve high precision, multi-functionality, high low-frequency torque, and high reliability. In the field of high-voltage frequency converters, apart from Jinzi Tianzheng and Tianchuan's AC-AC converters, ABB's 3 kV high-voltage converters using MCT modules, and Jialing's direct series type (which reduces modules and transformers and improves product reliability by solving current sharing and common-mode voltage), most other high-voltage frequency converters are similar to Robicon's type, with very low harmonics. 3.4 Development Towards Specialized Types Foreign frequency converters have long had many specialized types, such as those for elevators, lathes, paper machines, port cranes, and wire drawing machines, but they are expensive. A major contribution of Chinese system integration companies is that they have added some control units to general-purpose frequency converters, making them inexpensive for use in equipment such as converters, cranes, spinning production lines, paper production lines, printing and dyeing production lines, machine tools, and elevated tourist buses. In recent years, specialized frequency converters have emerged, such as those for injection molding machines, oil pumping units, and submersible electric pumps. 3.5 The market is constantly expanding. my country has set targets for energy conservation and environmental protection. Due to the high energy-saving effect of frequency converters, the task of energy-saving projects for motor systems is large in the "Eleventh Five-Year Plan" ten energy-saving projects. In addition to promoting high-efficiency energy-saving motors and rare-earth permanent magnet motors, frequency conversion speed regulation is the best way to save energy. The capacity of various motors in my country exceeds 420 million kilowatts, and the majority of motors require speed regulation. The task of transformation is quite large. It is estimated that under the current situation, the demand for frequency converters will grow at a rate of more than 30% per year. 3.6 The number of frequency converter manufacturers will increase. Combining imported, domestic (including Taiwan) general-purpose frequency converters and high-voltage frequency converters, there are approximately more than 220 manufacturers. Although the number of domestic general-purpose frequency converter manufacturers is already three times that of the world's general-purpose frequency converter manufacturers, and the number of domestic high-voltage frequency converter manufacturers is already twice that of the world's high-voltage frequency converter manufacturers, and the number of domestic general-purpose frequency converter and high-voltage frequency converter manufacturers will increase in 2007, and although the frequency converter market is already oversupplied, and although market competition has thinned profits. However, due to the needs of national economic development and energy conservation, especially driven by profits, new frequency converter manufacturers will continue to emerge. 3.7 Supply Exceeds Demand Whether for general-purpose or high-voltage frequency converters, current production capacity exceeds market demand. Although many manufacturers, especially high-voltage frequency converter manufacturers, operate on a make-to-order basis, the oversupply is very obvious. In 2007, the following characteristics will be reinforced: a buyer's market, fierce competition, lower prices, thinner profits, specialized technologies, opening up new markets, large factories profiting, small factories struggling, mergers and acquisitions, and foreign companies gaining an advantage. 3.8 A Showcase of the World's Frequency Converters No country in the world has a more diverse frequency converter market than China. Almost all world-renowned brands have entered China, either by establishing offices, acting as agents, or building factories. These include Japanese companies such as Yaskawa, Mitsubishi, Fuji, Toshiba, Panasonic, Sanken, and Meidensha; European and American companies such as ABB, Siemens, Danfoss, Vacon, AB, Robicon, Schneider Electric, Omron, GE, CT, and Rontz; and some emerging foreign manufacturers have also established a presence in China. Due to shared ancestry with the Yellow Emperor, Taiwan had a better understanding of the demand for frequency converters in mainland China, and thus, Taiwanese frequency converters began to be sold to the mainland in the early 1990s. Companies such as Puchuan, Lijia, Delta, Taian, Ningmao, Longxing, Shihlin, Teco, Jiude Songyi, Adeli, Dajin, Yanggang, Oulin, Tatung, Donggang, and Hongji were among the earliest to produce frequency converters in my country. Early Chinese frequency converter manufacturers included Tianchuan, Xi'an Electric Power Electronics, Dalian Electric Machinery Factory, Liaoning No. 1 Factory, Beijing Electric Machinery Factory, Beijing Metallurgical Automation Research Institute (Jinzi Tianzheng), Xianxing, Kaiqi, Nanjing Automation, Jialing, Huifeng, Fengguang, and Leadway, among others. Other domestic frequency converter manufacturers included Senlan, Dongfang Hitachi, Hekang Yisheng, Power Source, Jiuzhou, Leiruoer, Delixi, Weineng, Anbangxin, Kangwo (Bosch Rexroth), Invt, Huichuan, Yitipulin, Zhiguang, and Mingyang Longyuan, totaling approximately 170 companies. Therefore, if you want to learn about or purchase frequency converters, China is the place to go. There are numerous brands, a complete range of products, and a dazzling array of choices – truly a showcase for the world's frequency converters. 3.9 The rapid pace of mergers, acquisitions, and production shifts stems from demand and profits, coupled with the relatively low investment required for voltage-frequency converters (under 5 million RMB). Currently, production clearly exceeds sales. Consequently, market competition is fierce, and profit margins are thinning. If there's a small project worth 300,000 to 500,000 RMB without a specified brand, there will be 8 to 10 bidders offering low prices, extended payment terms, extended warranties, and various other incentives – this is inevitable in competition. The solutions are mergers, acquisitions, production shifts, or finding overseas markets. Some companies have already started selling frequency converters abroad. Mergers and acquisitions have been ongoing in recent years: Robicon and Ansaldo merged and were subsequently acquired by Siemens; Huawei's frequency converter division was acquired by Emerson; Hyli was acquired by Danfoss; Cornwall and Chunri merged and were subsequently acquired by Bosch; Rockwell Automation partnered with Jiuzhou, and so on. Variable frequency drives (VFDs) can drive not only squirrel-cage motors, but also synchronous motors and wound-rotor motors (by short-circuiting the slip rings). A major advantage is that they eliminate the need to replace the original motor, stabilizing the process, improving precision, and increasing efficiency. They offer high quality, increased production, reduced consumption, and energy savings. They are ideal equipment for enterprise technological transformation and product upgrading. 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