Growing Indian power electronics market provides host of opportunities
The India Power Electronics Market Report – 2010 has been developed by Dhaval Dalal and Ram Kumar, on behalf of Innovatech Switching Power India Pvt Ltd in Bangalore, India. I was delighted on being contacted by Ram Kumar, MD, who was kind enough to share some bits of this report.
The unprecedented growth in the Indian electronics demand (estimated at $50 billion for 2009), has spawned a corresponding spurt in the domestic power electronics industry. While this growth has been acknowledged in industry circles, no specific data exist to understand this phenomenon – this report aims to fulfill this gap.
The report highlights the peculiarities of Indian industry by identifying unique areas of growth which require special attention from industry participants. It also highlights the gap between the domestic demand and supply which is currently fulfilled by imports. Conversely, areas where the Indian industry contributes to the global demand by exporting products/services are also highlighted.
Coming from technology/strategic marketing background and with an unmatched access to the decision makers and trendsetters in Indian electronics industry, the authors are able to provide a highly credible and comprehensive account of the market that goes well beyond the surface data and helps identify actionable agenda for the reader.
So, here’s an opportunity for folks to enter the Indian power electronics segment, which offers a host of opportunities.
Some excerpts from the report are reproduced here.
Energy segment in India
Power backup (including batteries) is a $1.1 billion revenue industry in India. This industry has several facets uniquely shaped by Indian market realities of customer need and supply-demand dynamics. Two types of power backup devices commonly deployed in India are (a) the UPS; and (b) the inverter.
In the Indian context, the UPS systems refers to a power backup source for limited times, up to one hour or less, and a true-sine wave output is generated.
These are generally on-line systems where power is processed continuously and no „transition‟ to backup mode is seen by the load. Desktop computers, data centers, hospitals, telecom exchanges, and mission critical applications use UPS systems. Battery ratings are consequently lower and form less than 30 percent of the system cost. One of the reasons for shorter back-up time is that there is an alternative power generation source (such as diesel generator), that comes on-line soon after utility power fails.
The inverter system refers to a power backup source for extended time of power outages, typically from one hour to eight hours or more, and a pure sine-wave output (older products produce quasi-sine wave output) is produced by the system. Battery ratings (and the battery chargers also) are typically of high capacity, consequently the battery costs can form 60 percent or more of the system cost. These are popularly deployed in homes and offices to drive ceiling fans, TV sets, fluorescent and incandescent lights, or even elevators in housing complexes during power outages.
One salient characteristic of these applications is that they are essentially power electronics end equipment, and hence, power electronics is the driver and forms a large portion of the cost of the system. We estimate the power electronics content in the UPS and inverter markets combined at $494 million per year.
Demand and growth rates for power backup systems
The figures provide unit volume and PE content for power backup segment in 2009.
We estimate the UPS market in India has a power electronics content of $290 million. The industry has seen declining revenues the past two years of 8-9 percent, but prior to 2008 the industry grew at a CAGR of 18 percent+ for five to six years.
The sub-5 kVA systems make up 35 percent (by unit volume) of the UPS and Inverters sold in India‟s market. Within this, more than 70 percent by unit volumes shipped are rated 600 VA and below, which cater to the desk-top computer and linked to the growth of this market. Recent growth in the penetration of laptops and net books and the erosion in desktop PC sales are perceived as the reason for declining sales in 2009 in the 600 VA and below segment. The 10-100 kVA systems earn the highest revenues in the online and line-interactive UPS systems market.
The outlook for 2010 remains depressed to flat, and beyond that recovery to a CAGR of 18-20 percent is our forecast given the power shortage in the country. Several projects for generating power, largely coal-fired plants, are in the pipeline and a recent initiative to tap into solar power has begun, however, this power hungry nation will still see power outages due to the supply-demand gap in power generation for the near future.
We estimate 1.8 Mu inverters are sold annually in India, with more than 60 percent rated below 1.5 kVA. We estimate the power electronics content at $204 million. This market is expected to remain steady in 2010 and accelerate to a growth of 10-15 percent as the power shortage in the country is expected to ease only after 2012. This industry is currently much more fragmented than the UPS industry.
The unbranded inverter industry in India is estimated to have a power electronics content of $60 million, and more than 80 percent is sourced from China/Taiwan presently. Cost pressures are at the root of this trend and manufacturers tend to become traders in this high volume business segment. Unless significant policy changes happen to encourage access to low cost components for the local manufacturing industry, the trading opportunity will remain attractive.
Interested folks can buy the report from Innovatech for $1,495; or Rs 65,000 plus taxes.
India will surely benefit from more such industry reports as these would definitely help grow the Indian electronics ecosystem.