According to a new report published by Allied Market Research, titled, “Transformers Market,” The transformers market was valued at $58.6 billion in 2021, and is estimated to reach $103.0 billion by 2031, growing at a CAGR of 6.1% from 2022 to 2031.
A transformer is an electrical device that transfers energy from one circuit to another through inductively coupled conductors. The concept dates back to 1831 when Michael Faraday invented the electromagnetic induction device, laying the foundation for the modern transformer. Over the next fifty years, several induction devices resembling heavy-current transformers were developed, each differing in construction or operation. Due to these variations, the transformer design is often considered an independent invention.
Essentially, a transformer is used to either step up or step down electrical voltage. It operates on the principle of mutual induction between two coils—known as the primary and secondary windings—that share a common magnetic flux. Transformers play a crucial role in power generation and distribution, enabling voltage levels to be adjusted for efficient transmission from power plants to residential and industrial consumers.
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Key growth drivers for the transformer market:
- Increasing Demand for Electricity: Rapid urbanization, industrialization, and population growth drive higher electricity consumption, boosting the need for transformers in power generation and distribution networks.
- Grid Modernization and Expansion: Governments and utilities are investing heavily in upgrading and expanding electrical grids to improve reliability and efficiency, fueling demand for advanced transformers.
- Renewable Energy Integration: The growing adoption of renewable energy sources like solar and wind requires specialized transformers for efficient power conversion and grid connection.
- Electrification of Transportation: Rising electric vehicle (EV) adoption is increasing demand for power infrastructure upgrades, including transformers, to support EV charging networks.
- Industrial Growth: Expansion in manufacturing and heavy industries requires robust electrical infrastructure, driving transformer sales for process power and distribution.
- Technological Advancements: Development of energy-efficient, smart, and compact transformers enhances performance and reduces losses, encouraging replacement of older units and new installations.
- Government Policies and Incentives: Regulatory support and incentives aimed at improving energy efficiency and grid resilience are accelerating transformer market growth.
The transformers market is segmented on the basis of type, power rating, cooling type, number of phase, insulation application, and region. On the basis of type, it is categorized into distribution transformer power transformer, and others. On the basis of power rating, it is classified into small, medium, and large. On the basis of cooling type, it is bifurcated into oil cooled, and air cooled. On the basis of number of phase, it is divided into single phase and three phase. On the basis of insulation segmentation, it is bifurcated into two types- dry and liquid immersed insulation. On the basis of application, it is classified into commercial, and residential sector, utility, and industrial sector.
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On the basis of region, Asia-Pacific held more than 35% share in terms of revenue and is anticipated to grow at a CAGR of 6.4% during the forecast period. Future developments in China and India solar industry and rise in investment toward smart grids projects are projected to drive the growth of the transformer market in the region. LAMEA region is growing with the highest CAGR of 6.6% in the forecasted period as countries are involved in power transition and increasing demand for electricity in manufacturing industries..
The global transformers market analysis covers in-depth information of the major transformers industry participants. The key players operating and profiled in the report include ABB Ltd., Siemens AG, General Electric, Eaton., TOSHIBA CORPORATION, Schneider Electric, Mitsubishi Electric Corporation, CG Power & Industrial Solutions Ltd., VTC/GT, and SGB SMIT.
Key findings
- In 2021, the distribution transformers segment accounted for about half of the share in the global transformers market and is expected to maintain its dominance during the forecast period
- In 2021, the small power rating transformers segment accounted for more than 40% market share and is anticipated to grow at a rate of 5.6% in terms of revenue
- In 2021, the air-cooled segment accounted for more than 60% market share and is anticipated to grow at a rate of 6.3% in terms of revenue
- Utility sector is the rapidly growing segment in the global transformers market and is expected to grow at a CAGR of 6.3% during 2022–2031
- In 2021, Asia-Pacific dominated the global transformers market with more than 35% of the share, in terms of revenue
