Drive manufacturers across the world are facing challenges such as widespread supply chain disruptions, increasing freight costs, and rising input costs.

Omdia view


The United States (US), China, and Europe are leading the economic expansion as the global economy reopens. Investment in the industrial market returns from the beginning of 2021, which spurs the demand for low-voltage (LV) drives. Widespread supply chain disruptions, increasing freight cost, and rising input cost are among the challenges facing drive manufacturers globally.

2021: the path to recovery

The LV drives market is estimated to have been worth just over $11bn in 2020, a 4.6% year-over-year (YoY) decline because of the pandemic-induced global recession.

In 2021, demand for LV drives has increased as the post-pandemic recovery continues. The global crude oil market has stabilized, and commodity inflation has led to moderate expansion in the energy mining industry. Furthermore, this pandemic has shifted consumer behavior, leading to growth in the e-commerce industry. Therefore, Omdia expects increased demand for LV drives from e-commerce and warehousing-related industries, such as material handling equipment, refrigeration for cold-storage warehouses, and packaging.

Figure 1: The market for LV drives by region: World Figure 1: The market for LV drives by region: World Source: Omdia

Grasp the large, release the small

Despite the market recovery, intensifying supply shortages, particularly for semiconductor components, and issues with global logistics are hindering LV drives’ market to recovery. These factors are significantly impacting the pricing and delivery lead times for LV drives. The average selling price (ASPs) of LV drives rose by up to 6% across all product segments in 2020 compared to the pre-pandemic pricing in 2019. In terms of lead time, most suppliers have reported at least 6 to 8 weeks of delay, with some even seeing extended lead times up to quarters. Under such circumstances, drives suppliers are managing the inventory and supply chain more proactively than before while prioritizing deliverables to fulfill orders from key accounts rather than the smaller ones.

From the freight and trade perspective, the sea freight cost has increased fivefold since August last year (as shown in Figure 2). Container space and vessels shortages continue to drive the freight cost upward as demand remains strong. According to DHL, freight schedule reliability is at an all-time low, with three to four weeks of advance booking a necessity in the current market. This causes the freight cost and lead time to be highly unpredictable.

Figure 2: Global container freight index: Weekly prices (as of September 17) Figure 2: Global container freight index: Weekly prices (as of September 17) Source: Freightos Baltic Index (FBX) and Omdia

Additionally, the global chip shortages and supply chain disruptions, reported in late 2020, are continuing into 3Q21 and are likely to continue until the beginning of 2022. Pressure has increased as global manufacturing activities continue to recover from the COVID-19 lockdowns.

Drive manufacturers will experience impacts differently depending on their approach to supply chain management. In general, Asian drive manufacturers could manage these issues better than western suppliers as the component supply and trade is more regional based than those in Europe and the Americas. Companies that are proactively managing their in-house component inventory will not face significant impacts on delivery lead times. In contrast, other companies are expecting delays in delivery lead times until the end of 2021 and most likely to continue until the first half of 2022.

As a result, drive suppliers are taking a ‘grasp the large, release the small’ approach, reviewing the orders from key accounts to prioritize the orders and sustain the established relationship with these key customers to remain competitive in the drive market. Overall, intensifying supply shortages will thwart the LV drives’ market recovery but will not affect the optimism of its market outlook. Analysis on trends affecting the LV drives market is covered in Omdia’s recent Low Voltage Drives Report – 2021.


Further reading

Low Voltage Drives Report – 2021 Analysis (September 2021)

“Freightos Baltic Index (FBX): Global Container Freight Index,” FBX,, retrieved August 2021

“Ocean Freight Market Update,” DHL,, retrieved August 2021


Joanne Goh, Senior Research Analyst, Manufacturing Technology