Current trends in the market for industrial motors and drives - motor summit 2019
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Current trends in the market
for industrial motors and drives
Presented by: Preston Reine, Research Manager
IHS Markit
Motor Summit 2018 International, Zurich Switzerland, 14/15 November 2018
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.Agenda • Economic update • Motor and drive market statistics • Emerging technologies • Conclusion Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
Industrial Automation research areas
DISCRETE & PROCESS CAPTIAL EQUIPMENT &
ELECTRIC MOTOR SYSTEMS
AUTOMATION MACHINERY
Controllers Drives 3D Printing
Industrial Communications Mechanical Power Generators
Process Instrumentation Transmission Machinery
Visualization Motors Motor Driven Equipment
Smart Manufacturing Switchgear
Turbines
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.4 Economic outlook Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
World Economic Outlook / October 2018
Eurozone economic sentiment has fallen from the highs
of late 2017 and early 2018
Positive replies minus negative replies
40
20
Percent of total
0
-20
-40
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Consumers Industrial sector Services sector
Source: European Commission © 2018 IHS Markit
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. 714 Motor and drive market statistics Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
Overview of industrial low-voltage motor market
2017 estimated unit World revenue by region (%)
shipments
41.7 Million
Top-4 Leading EMEA
35%
Suppliers Americas Asia
19% 46%
ABB
Siemens
WEG
Wolong
Unit shipment CAGR *
(2017-2022)
Americas Asia EMEA **
1.7% 4.2% 1.5%
*) CAGR: Compound Annual Growth Rate
15
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. **) EMEA: Europe/Middle-East/AfricaElectric Motors Overview
Leading regional vendors
Americas Asia Pacific EMEA
1 ABB 1 Wolong 1 Siemens
2 WEG 2 Siemens 2 ABB
3 Nidec 3 ABB 3 ATB Motors (Wolong)
4 Regal Beloit 4 TECO 4 WEG
5 TECO 5 Hitachi 5 Leroy Somer
Market trends: Average selling prices (ASP) and supply chain are crucial
• IE4 and IE5 motor efficiency benchmarks have been established but there are no current plans to make
motors meet those efficiency levels
• The ‘Industrial Internet of Things’ (IIoT) continues to be widely discussed but is still experiencing a slow
adoption rate. Sensors for lv motors are mostly sold after the initial motor sale.
• Primary factor influencing price are changes to input costs, such as raw materials and transportation costs
• Steel Tariffs placed by the US has caused motor prices to increase by 3–7 % as a result
• As the adoption of IE3 and more efficient motors continues, average price overall for motors will inflate
16
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.Global MEPS Timeline
The world market for low-voltage motors - unit shipments from 2010 to 2020
20,000
Brazil EU starts
starts IE2 IE2 shift EU (Phase 3) and China
18,000
start IE3 shift (delayed)
China
16,000 starts IE2
shift
14,000
EU (Phase 2)
12,000 US starts and Japan
IE3/NEMA start IE3 shift
Units (k)
Premium shift
10,000
8,000 Canada starts
IE3/NEMA
Premium shift 2017 and
6,000
beyond are
DOE estimated
Amended
4,000
Integral
Horsepower
2,000 Rule
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
IE1 - Standard Efficiency IE2 - High Efficiency IE3 - Premium Efficiency
© 2015 IHS
The LV Motor market declined from 2014-17. 2017 and 2018 have seen strong growth, at
3.4 % and 4.6 %, respectively,
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.EFFICIENCY CLASS TRANSITIONS (UNITS)
Global Low Voltage Motors - Efficiency Class Transition: 2016 to 2022
DC Others DCMajor motor applications
16,000 4%
LV Motor Shipments (k)
14,000 4%
12,000 3%
Growth (%)
10,000 3%
8,000 2%
6,000 2%
4,000 1%
2,000 1%
0 0%
2017 Revenues Growth 2018 Growth 2019
Source: IHS Markit © 2018 IHS Markit
Pump, fan, and compressor applications make up about 80 % of LV motor shipments annually
20
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.21
MARKET INSIGHT
Motor-driven Equipment
PUMPS, FANS & COMPRESSORS WITH VFDS IMPACT OF ENERGY EFFICIENCY FOR
Demands for efficiency boost VFD growth MOTOR-DRIVEN SYSTEMS
INDUSTRIAL INTERNET OF THINGS (IIOT)
30.000
• Technical innovation related to IIoT has transformed the role of
machinery components including motor-driven equipment,
25.000
benefitting suppliers that digitalize and streamline automation
processes through integration of separate machinery
components.
Unit shipment (thousands)
• Equipment suppliers have used this opportunity to position
20.000
themselves as uptime service providers rather than vendors of
hardware.
15.000
MORE FOCUS ON SYSTEMS EFFICIENCY
• As market demands change, so must equipment providers. For
10.000 this, motor-driven equipment manufacturers are beginning to
encourage a systems approach that involves the use of more
efficient motors and drives (VFDs).
5.000
• The graph to the left indicates that VFDs are a major growth
opportunity for equipment providers in the near-and-long term.
0 OTHER TRENDS
Pumps Compressors Fans
• Training programs gaining prominence
• Properly sized motor applications can achieve monumental
With VFD No VFD
efficiencies
Source: IHS Markit © 2018 IHS Markit
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.Overview of industrial low-voltage drives market
2017 estimated unit World shipments by region (%)
shipments
20.5 Million
Top-3 Leading EMEA
25%
Suppliers Americas Asia
16% 59%
ABB
Siemens
Danfoss
Unit shipment CAGR *
(2017-2022)
Americas Asia EMEA **
3.9 % 4.5 % 4.4 %
*) CAGR: Compound Annual Growth Rate
22
Confidential. © 2018 IHS MarkitTM. All Rights Reserved. **) EMEA: Europe/Middle-East/AfricaElectric Drives Overview
IIoT and technological developments
• Transformerless drives growing in space-needy applications
• Many energy-intensive applications don’t utilize drives
> Large growth prospects in Heating/Ventilation/Air Conditioning (HVAC), water/wastewater, for example
• Many end users need to see a clearer value proposition in order to adopt IIoT in the form of asset condition
monitoring
• Operational downtime is most important; IIoT has always been around for energy-intensive applications
Impact on energy savings
• Aging workforce and decline in engineering skill means more demand for consistent maintenance and
guaranteed uptime
• Connected drive units (IIoT-enabled) has grown by almost 20% overall.
• Enabled drives have sold, but it is unlikely all are implemented and used properly
24
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.25 Technology changes in manufacturing and machinery Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
26
Convergence of transformative technologies accelerates change
As different transformative technologies come together, their impact goes from linear to exponential
A fundamental enabler: connectivity has driven
digitization in consumer, commercial and industrial
markets for over 20 years
Connectivity
A driver of efficiency and productivity: many
industries have realized significant improvements
through embedded processing, connectivity and sensors
Connectivity IoT
A critical tool for achieving scale: with maturing and
increasingly sophisticated IoT implementations, cloud
storage and analytics have become critical
Connectivity IoT Cloud
Essentials for data collection: companies are focusing
on how they can manage and utilize all of the data they
collect with deep learning, machine learning and AI
Connectivity IoT Cloud AI
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.Internet of Things Evolution
Internet of Everything (IoE): represents the open access to data from one or more monitoring
and control systems by third-party applications to provide unique, additional value to
stakeholders.
Connect Collect Access Complex Unique
Devices Data Data Analytics Value
• Realize the true potential
• Connectivity • Sensors • Cloud • “Big Data”
of a connected society….
• Intelligence • Storage • Standards
• Open APIs
Next stage – security Ideal goal – many years
Where we are today.
is key challenge! away…
28
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.Sensors enable new services and business models
Example vibration sensing for predictive maintenance
Predictive maintenance
Portable analyzer + service
Vibration sensor 1 sensor: $20k
component Software: typically $150
$100 to $400 $ Wireless vibration $$$$ •
to $300k per customer
transmitter + 2
Meggitt, PCB… sensors: $6k • Cloud based service
typically $40k to $60k
Emerson, GE… per plant per year
GE Predix, Azima,
Shift of business from selling hardware to selling service
Emerson…
• GE not selling engines for aircrafts but selling uptime
• Bearing companies SKF and FAG adding sensors into bearings and selling services
• ABB selling not only motors but energy savings and uptime
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.30
Motors in IIoT
IHS Markit’s Industrial Communication Intelligence Smart motors have imbedded sensors and can
Service estimates that: monitor motor conditions
• In 2016, 4.7 % of motors were network enabled • Mostly sold aftermarket
• Less than 1 % of motors were connected. • 2019 will see a big focus on this from the leading
suppliers
Motors Generators & turbines
4.7 % enabled devices
9.6 % new devices 47.3 % enabled devices
connected 100 % new devices
connected
Pumps & compressors
NEW TO 2017
0.1 % enabled devices EDITION
2.2 % new devices
connected
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.IIoT in LV Drives
What are the challenges hindering the adoption of IoT?
• When will consumers recognize a return on the added investment?
• Can generate a lot of data analytics, but what do you do with that data?
• Many companies are now partnering with analytics providers, whilst others are trying to develop in-house expertise to
support these functions. There is software and algorithms that can currently do this, although they are still quite basic in
terms of the insights they can gain.
• The problem with IoT is that it requires a knowledgeable person to evaluate the data produced and identify patterns
within it. With a lack of skills in the workforce there are fewer people with this knowledge. As a result, companies are
looking at ways to make the data more intuitive so that it is easier for people to identify patterns and use the
information.
• Who owns the data collected?
31
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.Transformation for OEMs – what do they want?
IIoT application vs plan
0 100 200 300 400 500 600 700 800
Asset Tracking
Business Analytics
Application
Energy Analytics
Machine Learning
Predictive Maintenance
Remote Servicing
What are the most useful IIoT applications for your company? - We use this application or we plan to use it in the next three years
What are the most useful IIoT applications for your company? - Interesting application but we have no clear plans to use this technology
What are the most useful IIoT applications for your company? - Irrelevant application for our company
Min sample size = 636 Max sample size =677 Respondents may answer multiple independent questions
Source: IHS © 2015 IHS
Over the past few years, IHS Markit has noted more interest in asset tracking and predictive
maintenance more than anything else, and is currently conducting new surveys on this topic
Confidential. © 2018 IHS MarkitTM. All Rights Reserved.34 Conclusion Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
35 Conclusion Key Takeaways: • Efficiency will improve, but IIoT has brought forth other solutions that can dwarf the benefits of simply buying one efficient product • Motor and drive suppliers enjoying favorable market conditions, and strong opportunities remain in industries concerned with energy consumption: construction, commercial Heating, Ventilation, Air Conditioning (HVAC), water Notable actions: • Full solution offerings continue to be a better business model than niche product manufacturing • Uptime as a service is likely the future, and smart motors could take off over the next five years • This means that motor suppliers are looking insert themselves all along the supply chain to best understand customer needs Confidential. © 2018 IHS MarkitTM. All Rights Reserved.
36
Thank you! Any questions?
Preston Reine
Senior Research Manager, IHS Markit
Manufacturing Technology
+1 512 582 2059
Preston.Reine@ihsmarkit.com
IHS Markit Customer Care
CustomerCare@ihsmarkit.com
Americas: +1 800 IHS CARE (+1 800 447 2273)
Europe, Middle East, and Africa: +44 (0) 1344 328 300
Asia and the Pacific Rim: +604 291 3600
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