The global low-voltage (LV) drive market was sluggish in 2019 after a 5% growth in 2018 over 2017. The slowdown in the LV drive market was due to trade and political uncertainties, with an expectation of recovery toward the end of 2019 or the beginning of 2020. However, this optimism was wiped out by the outbreak of the COVID-19 pandemic and the crash in global oil prices in April 2020.

The global low-voltage (LV) drive market was sluggish in 2019 after a 5% growth in 2018 over 2017. The slowdown in the LV drive market was due to trade and political uncertainties, with an expectation of recovery toward the end of 2019 or the beginning of 2020. However, this optimism was wiped out by the outbreak of the COVID-19 pandemic and the crash in global oil prices in April 2020.  

The sluggishness of LV drive demand was particularly apparent in the discrete automotive sector and machine tool sector in 2019. Additionally, the recent COVID-19 outbreak has caused the major economies to go into lockdown at different times, thereby impacting manufacturing activities around the world and affecting investors’ confidence in most industries.

During periods of economic headwinds and a pandemic outbreak, especially when investor confidence is low and end users holding back from spending capital expenditures (capex) have resulted in decreased LV drive hardware revenue, most LV drive suppliers expect their services business to increase.

According to the recent Omdia research on the LV software and services market, the global revenues for software and services in the LV drive market is estimated to be worth $1.4 billion in 2019 and is expected to reach $1.9 billion by 2024. This market is anticipated to be spearheaded by software subscriptions and support and maintenance services.

trend trend

The onsite support and remote support and maintenance service is forecast to grow in revenue at a CAGR of 6.7% to 7.5% from 2019 to 2024. It is expected that end users will spend more on those services for two reasons:

  • When the manufacturing activity is slow and production lines are idling, end users will use this opportunity to upgrade their existing machines and platforms.
  • End users in more cost-sensitive regions and industries will spend more on repairs and maintenance to prolong the lifespan of the drive systems as much as possible, to avoid using capex in the short term.

The adoption of transformative technology will be one of the key factors behind the growth of the LV drive software and services market. In 2019, a survey published in the Omdia IIOT Readiness Benchmarking Report showed that a majority of companies (54%) are either not considering or only evaluating if and how to introduce solutions to their business. After this pandemic, end users will start to realize the importance of remote intelligence and automation to reduce the reliance of workforce required on the factory floor. This will continue to propel the adoption of various transformative technologies to make the equipment better connected, or augmented reality (AR) for training purposes in the factory. These transformative technologies would require software and platforms, and therefore push the demand for software subscriptions in the LV drive market.

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In conclusion, the Omdia analysis indicates that every market challenge is an opportunity. LV drive manufacturers have the chance to monetize the software and services segment when the hardware business underperforms amid the current situation.