With a capital spending recovery on the horizon, the outlook for makers of servo drives is turning up, according to a study released today by ARC Advisory Group, Dedham, Mass.
Following two years of declines, the servo drives market will grow by nearly 7.8 percent to about $2.2 billion in 2003, says Sal Spada, an ARC research director, and principal author of the report. “And we think it will probably be close to 10 percent in 2004,” Spada adds. Overall, the report projects a five-year compound annual growth rate of 7.2% between 2001 and 2006, when sales will top $2.9 billion.
This year’s growth will be driven largely by Japan, where capital expenditures are on the rise, says Spada, while the 2003 North American servo drive market remains relatively flat. Servo drive sales in the U.S. and other world regions will help rev up the pace in 2004, as worldwide capital equipment spending picks up.
Once the recovery gets rolling, ARC foresees market growth continuing unabated for servo drives, which are used widely in automation for motion control applications. Intelligent motion control systems applied to computer numerical control, robotics and general motion control systems all require high performance servo drives to provide the interface to servo motors. As motion control systems are unbundled, it is leading to greater integration with entire automation systems, ARC says.
Growing sweet spot
Among trends, the ARC report notes that the traditional power range sweet spot in the servo drive market is expanding into both the sub-kilowatt range and the greater-than-10 kilowatt range, as many original equipment manufacturers are outsourcing the design and manufacture of drives on their machines. Servo drive manufacturers are also continuously adding more intelligence to their drives, Spada observes, while industrial networking standards are likewise providing value to end users and machine builders.
The ARC analyst expects to see continuing downward pricing pressures on servo drives, which will dampen market growth rates in dollars. But that trend will be somewhat offset by users more frequently adding networking capabilities to the drives, says Spada.
“When you add networking to a drive, it’s going to cost you more money, particularly in the low power sector,” he notes. But the benefits of networking, including better diagnostics, faster integration times and easier maintenance can often more than offset the added costs, says Spada. “All of those factors can play into the total life cycle costs of a machine, and that can provide a big return.”
Fluid’s death exaggerated
To a degree, servo drives in the higher 10-kilowatt-plus power ranges will make inroads into traditional fluid power applications, Spada predicts. But he is quick to add that the impact will be lower than once expected.
“We think there will be some substitution, but we don’t think it will be anywhere near what people had predicted in the past,” he says. The makers of hydraulic systems have “cleaned up their act,” Spada notes. “They’ve made their solutions much cleaner, with fewer spills and better couplings. And they’re starting to integrate electronics with their cylinders, so we think that’s going to put off the shift (to servo electrics).”
