Power converter market is anticipated to grow at a considerable CAGR of 7.9% during the forecast period (2024-2031).A power converter is a device that formally modifies electrical characteristics, such as voltage or frequency, to ensure compatibility between power sources and loads. The growing demand for power convertors from end-use industries is a key factor driving the growth of the global power convertor market.

Market Dynamics

Green Shift Spurs Growth in Global Power Converter Market

The expanding renewable energy sector is significantly impacting the global power converter market by driving the demand for efficient and reliable conversion solutions. As the world increasingly embraces sources like solar, wind, and hydroelectric power, the need for power converters to integrate these intermittent energy sources into the grid grows substantially. Power converters play a pivotal role in converting variable renewable energy outputs into stable electricity, ensuring grid stability and reliability. According to the International Energy Agency, renewable electricity capacity is projected to soar to 507 GW in 2023, a nearly 50.0% increase from 2022, fueled by ongoing policy support in over 130 countries. This significant surge signals a notable shift in the global growth trajectory towards renewable energy. This surge in demand for renewable energy integration solutions propels innovation in power converter technology, leading to advancements in efficiency, scalability, and grid compatibility, thereby fueling the growth of the global power converter market.

Consumer Electronics Boom: Powering Up the Demand for Converters

The growing consumer electronics market is another significant driver of power converter growth. The ever-increasing reliance od consumers on a vast array of electronic devices, from laptops and smartphones to the latest wearable’s and smart home gadgets, necessitates a constant need for compatible power solutions. According to the International Trade Administration, India's semiconductor industry is poised for global leadership, anticipating demand surpassing $80.0 billion by 2026 and $110.0 billion by 2030. The sector is experiencing rapid growth, with a projected 25.0% CAGR through 2028, driven by the surge in demand for compact electronic devices. While most devices come with their dedicated adapters, the demand for universal power converters remains strong. These versatile converters cater to travelers seeking adaptability across various regions with differing power outlet standards. Additionally, they offer a convenient solution for users who own multiple devices with diverse power requirements, eliminating the need for a multitude of individual chargers. This confluence of factors, driven by our expanding reliance on consumer electronics, is a significant contributor to the continued growth of the global power converter market.

Market Segmentation

Our in-depth analysis of the global power converter market includes the following segments by type, application, and end-use industry:

• Based on type, the market is segmented into AC to DC converter, DC to AC converter, DC to DC converter, and AC to AC converter.

• Based on the application, the market is segmented into renewable energy, consumer electronics, medical equipment, electric vehicles, and others.

• Based on end-use industry, the market is segmented into residential, commercial, and industrial.

Electric Vehicles (EVs) Propel Rapid Growth of Power Converter Market Sub-Segment

Among the sub-segments of the global power converter market, the electric vehicles (EVs) segment is currently experiencing the most rapid growth. As the automotive industry undergoes a significant shift towards electrification, driven by factors such as environmental regulations, technological advancements, and increasing consumer demand for sustainable transportation options, the demand for power converters in EVs is surging. For instance, electric car sales are on a steady rise, potentially reaching approximately 17.0 million units in 2024, constituting over 20.0% of global automobile sales. In the first quarter of 2024, sales surged by approximately 25.0% compared to the same period in 2023. Power converters play a crucial role in EVs for battery charging, motor control, and power management systems. This accelerating growth in the EVs segment is driving demand for power converters.

Residential Energy Storage Leads the Charge 

The residential segment of the power converter market is poised for significant growth, driven by the increasing adoption of renewable energy solutions such as solar panels. According to the International Energy Agency, Solar photovoltaic (PV) generation soared by a record 270 terawatt-hours (TWh), a 26.0% increase from 2022, reaching nearly 1,300 TWh. Projections indicate continued growth in renewable power capacity additions over the next five years, with solar PV and wind comprising a record 96.0% of the additions. Additionally, the surge in smart home device popularity requires compatible power solutions, with converters ensuring seamless integration within existing electrical systems. As sustainable living and smart home trends persist, the residential power converter segment is expected to see sustained expansion, meeting evolving consumer demands for efficient energy management.

Regional Outlook

The global power converter market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America). 

Global Power Converter Market Growth by Region 2024-2031

Asia-Pacific: The Engine of Global Power Converter Market Growth

Asia-Pacific stands as the global leader in the power converter market, excelling in both market share and growth rate. This dominance arises from a merger of driving forces. The region's industrial boom and rapid urbanization fuel demand across sectors like manufacturing and construction, where power converters are essential. Moreover, Asia-Pacific is a key hub for consumer electronics manufacturing, serving a vast population reliant on diverse electronic devices, all requiring compatible power solutions. For instance, in India during the fiscal year 2022-23, manufacturing exports achieved a historic milestone, reaching a record annual export value of $ 447.5 billion, representing a growth of 6.03% over the previous year (FY22) which had recorded exports of $ 422.0 billion. Looking forward, projections indicate that by 2030, the Indian middle class is anticipated to hold the second-largest share of global consumption, estimated at 17.0%. Additionally, Asia-Pacific champions renewable energy adoption, particularly solar and wind power, necessitating efficient power conversion. For instance, China is poised to dominate the global renewable energy landscape, with nearly 60% of new renewable capacity slated for operation by 2028. Over the period from 2023 to 2028, China's renewable energy capacity is forecasted to surge by over 2 terawatts (TW), marking a threefold increase compared to the previous five-year period. Solar photovoltaic (PV) installations are anticipated to constitute three-quarters of this expansion. This focus on clean energy solidifies Asia-Pacific's position as the epicenter of power converter market growth globally.

Market Players Outlook

*Note: Major Players Sorted in No Particular Order.

The major companies serving the global power converter market include ABB Group, General Electric Company (Vernova), Mitsubishi Electric Corp., Schneider Electric SE and Siemens AGamong others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers, and acquisitions to stay competitive in the market. For instance, in May 2022, Gamesa Electric and Siemens AG signed a strategic cooperation agreement for Gamesa Electric's Proteus central inverters in PV and Energy Storage projects. With a global reach, the deal entails supplying inverters internationally from Gamesa Electric's factories, expected to reach GW scale annually. Siemens will integrate Proteus inverters into its PV and Storage solutions portfolio, leveraging their high-power output and efficiency. 

The Report Covers

• Market value data analysis of 2023 and forecast to 2031.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global power converter market based on the availability of data, information related to new product launches, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.