Frequency Converter Benefits from Price and Service Advantage Occupies Market Share

The inverter mainly includes power electronic components and chassis and other raw materials, but the high-voltage inverter includes a transformer. Power electronic components include common electronic components (such as electrolytic capacitors) and core power devices IGBTs. At present, most of the raw materials except IGBT, domestic enterprises can produce, the industry is fully competitive, prices remain stable.

In the low- and medium-voltage inverter market, foreign brands have a high market share, accounting for 76% of the total in 2008, and they are in a dominant position in the market. Due to the late entry of domestic-funded enterprises into the inverter industry, the inverter market is basically dominated by foreign brands in the early stages of development. Foreign brand companies use their technology and brand advantages to quickly occupy the market before domestic-funded enterprises' products have formed an advantage.

At present, the technology of domestic-funded brand products has gradually matured and its reliability is high. Domestically-funded enterprises use price and service advantages, and market share has increased year by year. In the low- and medium-voltage inverter market, the difference in the performance of domestic-funded excellent brand products and foreign brand products gradually decreases. For example, in vector-controlled inverter products, the difference in control accuracy between domestic-funded brands and foreign-brand products gradually decreases. However, prices are about 20%-30% lower than foreign brands. Domestic brands use their price and service advantages to gradually increase their market share.

Before 2003, the market share of domestic-funded brands was less than 10%, reaching 15% by 2005, further expanding to about 24% by 2008, and increasing market share year by year. However, about 76% of the market share is still occupied by foreign brands, of which Japanese brands account for about 18%, European and American brands account for about 50%, and Taiwan and South Korean brands account for about 6%.

The low- and medium-voltage inverter market is decentralized due to its relatively low technical threshold. There are more than 40 foreign brands in the low- and medium-voltage inverter market, and more than 100 domestic brands. Among the domestically-funded brands in the first tier are Shenzhen Inventronics, Oerlikon Drive, Chengdu Hope Sinlan, and Shenzhen Huichuan; the second tier includes Shenzhen Anbangxin, Shandong Xinfengguang Electronics, Shenzhen Sifang, and Shenzhen Sine. We expect that companies with brand and technology advantages in domestic-funded brand enterprises will win the competition in the future.