Market Trends of Magnet Wire Industry
This section covers the major market trends shaping the Magnet Wire Market according to our research experts:
Rising Demand for Magnet Wire in the Transportation Sector
- Today’s hybrid and electric vehicles are significantly dependent on magnet wire for functioning as a magnet wire is an important component of motors used in these vehicles. Magnet wire is also employed in busbars and charging stations. Lately, the demand for electric vehicles has gained an astonishingly steep rise with dawning awareness among consumers and the inclination of governments of several economies under environmental concerns.
- The associated energy efficiency, expediting construction of charging infrastructure, and increasing consumer purchasing power in many regions of the world have contributed to the widening of the market size of electric vehicles, in turn strengthening the demand fundamentals of magnet wire.
- Augmenting electric vehicle market, and the rising adoption of magnet wire in respective applications, are among the key factors driving the growth of the target industry. For instance,
- According to the stats generated by The Electric Vehicle World Sales Database, the sale of electric vehicles registered a remarkable hike of 109% in 2021 from the year 2020 with Tesla, a renowned electric vehicle manufacturer, accounting for the highest share of 14%.
- In December 2021, Toyota revealed that the company will be launching as many as 30 electric vehicles by 2025. The lineup will include SUVs, sports cars, crossovers, and concepts.
- In September 2021, Ford announced its commitment to spending USD 11.4 billion on electrifying its vehicle line-up of trucks and cars on the new manufacturing sites of Tennessee and Kentucky.
- In July 2021, Mercedes Benz laid out its intentions to go completely electric towards the end of the decade. The company will be launching three electric-only architectures in 2025.
- Electric vehicles predominantly use copper-based magnet wire. According to Copper Development Association Inc., the demand for copper in electric vehicles is expected to see a rise of 1,700 kilotons by 2027.
- Thus, with the growing electric vehicle launch and sales, the demand for magnet wire will also significantly increase.
- Therefore, considering the aforementioned factors, the demand for magnet wire is expected to rise in the transportation industry significantly in near future.
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Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region dominated the worldwide market in 2021, with a lion’s share in the magnet wire market, and is projected to maintain its dominance during the forecast period of 2022-2027.
- The application of magnet wire in the electrical and electronics segment propels the market growth in the Asia-Pacific region. Many consumer products such as inverters, air conditioners, toys, trimmers, fans, etc., carry magnet wire coil components. China is the hub for the electronics and home appliances market followed by Japan with many brands originating from these countries.
- The demand for magnet wire from the energy sector has also increased owing to the growing infrastructural advancements and the surge in the need for continuous power supply in households, industries, and other commercial setups, along with the growing use of portable energy-carrying electronic devices. Furthermore, the increasing expenditure by governments on the establishment of renewable sources for power generation has grown the appetite for magnet wire in the energy sector.
- Growing demand for magnet wire in electronics, transportation, industrial, and infrastructure applications across the Asian countries is the primary factor driving the growth of the target industry in the Asia-Pacific.
- According to the stats released by the National Bureau of Statistics of China, the annual growth rate of value added in the electronics manufacturing industry in China accounted for 15.7% in 2021, compared to 7.7% in 2020.
- As per the National Bureau of Statistics of China, the output value of the construction works in China accounted for CNY 25.92 trillion in 2021 compared to CNY 23.27 trillion in 2020, thereby enhancing the demand for magnet wire in respective infrastructure applications.
- As per the commitments made by India at the COP26 Climate Conference held in Glasgow, the country is targeting to achieve 500 GW of non-fossil energy capacity by 2030. The initiative will require installations of solar and wind-energy derived power generation infrastructure on a large scale, thereby creating a high demand for magnet wire.
- As per India Energy Storage Alliance (IESA), the Indian EV industry is expected to expand at a CAGR of 36%, which in turns will stimulate the demand for magnet wire.
- Moreover, as per India Brand Equity Foundation, the domestic production of electronics in India has grown from USD 29 billion in 2014-15 to USD 67 billion in 2020-21, which has propelled the demand for magnet wire in respective applications in the electronics segment.
- As per the Ministry of Land, Infrastructure, Transport and Tourism, (MLIT), the value of orders received for construction works in Japan was valued at JPY 15.1trillion in 2021 compared to JPY 14.88 trillion in 2020, thereby fuelling demand for the magnet wire market.
- The Asia-Pacific region is home to key magnet coil manufacturers such as LS Cable & System Ltd. (South Korea), Hitachi Metals, Ltd. (Japan), Sumitomo Electric Industries, Ltd. (Japan), Fujikura Ltd. (Japan), Samdong Co., Ltd. (South Korea), to name few.
- All aforementioned factors are likely to fuel the growth of the Asia-Pacific magnet wire market over the forecast time frame.
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