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The global wires and cables market size was valued at USD 184.92 billion in 2019 and is projected to reach USD 273.68 billion by 2027, exhibiting a CAGR of 5.4% during the forecast period.
A wire is a single electrical conductor, whereas a group of wires bundled in an assembly is called a cable. Together, they are used for transmitting electric power and communication signals across industry verticals. Increasing investments in transmission & distribution of electric power and growth in demand from data centers and telecom industry are the major factors expected to drive the wires and cables market growth during the projected period. Increased investments in smart grid projects and up-gradation of power transmission and distribution systems are also estimated to propel the demand globally. Significant investment in smart grid technology has resulted in an increasing need for grid interconnections; additionally, rising investments in underground cables coupled with growth in renewable energy has escalated the adoption of wires & cables.
Amid COVID-19, industries across the globe, such as automotive and aviation, are experiencing a negative impact on their business. Manufacturing activities are generally considered essential activities as they are anticipated to drive the industrialization of underdeveloped economies globally, and therefore, been mostly exempted from the lockdown measures. As a result, the demand for wires and cables has remained stable in this sector. The spread of Covid-19 poses a significant threat to this global market.
Emerging economies such as China and India are the major countries for establishing new power plants, with increasing focus on building smart infrastructure and introducing advanced communication facilities, thereby stoking the uptake of wires and cables. As the COVID-19 spread pushes China and then India towards a lockdown, resulting in the delay in a new installation in the offices and commercial applications, which has hampered the growth of the cable industry.
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Increasing Demand for Renewable Power Generation to Aid Market Growth
Increasing awareness about the potential of renewable power has led to the significant adoption of renewable energy. In addition to this, supportive government initiatives for the development of renewable power is also a prominent factor responsible for the growth of renewable power generation, which is further driving the demand for wires & cables. According to EIA's International Energy Outlook 2019 report, 28% of the global power came from renewable energy in 2018, with majority contributions from wind, solar, and hydropower. The EIA forecasts that renewables will account for almost half—49%—of the global electricity output by 2050.
Growing Demand from Data Centers and IT Facilities to Favor Market Growth
The increasing number of data centers and IT facilities for higher levels of availability, security, and affordable connectivity of IT infra would increase the application of wires & cables. Hyperscale deployments and liquid cooling are anticipated to be trending in 2020 and in the coming years, which is likely to fuel the demand for data centers and IT facilities. AC/DC power, ground, copper, and fiber optic cables are the prominent network cables used in data centers for ethernet application. According to Cisco, global cloud data center traffic is projected to reach 20.6 zettabytes (ZB) per year by 2021, which is up from 6ZB per year in 2016. It depicts an increase of 628 hyperscale datacenters globally in 2021, compared to 338 in 2016.
Increasing Investments in Transmission & Distribution of Electric Power Fuels Demand for Wires & Cables
Increasing investments in the transmission & distribution (T&D) sector for transmitting electrical power is the major factor attributed to the growth of this market. For instance, in India, grid spending increased to USD 20 billion, which was led by the transmission and distribution sector. The government’s Central Electricity Authority has stated a need for USD 40 billion for transmission over the next three years, which is 60% higher than the current levels. Investments in digital grid technologies increased by 10 percent, reaching USD 35 billion in 2018. According to World Energy Investment statistics, investment in T&D infrastructure is expected to increase to USD 6.8 trillion between 2014 and 2035.
Growing Investment in Industrial Sector and Rising Urbanization to Fuel Market Growth
According to the World Investment Report 2018, Asia Pacific exhibited an investment worth USD 476 billion of inflow from foreign direct investment in the year 2017, which was majorly contributed by China and Singapore. Urbanization is likely to escalate energy demand, which will inevitably result in the need for power grid interconnections in densely populated areas, generating demand for submarine and underground cables.
Volatility in Raw Material Prices to Restrain Market growth
The main raw materials required for manufacturing cables are rubber and plastic-based ingredients such as PVC grains. Organic polymer materials are mainly fluorine plastic and silicone rubber, whereas copper material is essential for wires. An increase in the price of raw materials, especially copper, directly impacts the profit margin of the wires and cables manufacturer, which restraints the market growth.
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Low Voltage Segment to Grow at Faster Pace during 2020-2027
Based on voltage, the market is segmented into low voltage, medium voltage, high voltage, and extra-high voltage. The low voltage segment dominates the wires and cables market share owing to the wide application of low voltage wires & cables in infrastructures, automation, lighting, sound and security, and video surveillance, among other applications.
The medium voltage segment is projected to hold the second-largest market share due to the increasing application in mobile substation equipment, commercial buildings, hospitals, and universities & institutions. Medium voltage are widely used for power distribution between high voltage mains power supply and low voltage applications, as well as by utility companies to connect residential and industrial complexes, or renewable energy sources such as wind and solar farms, to the primary grid.
The high voltage segment is also increasing its market share owing to growing government initiatives for expanding the grid. It is preferable for power transmission & distribution purposes from utilities and commercial applications. Extra-high voltage cable is mostly used in power transmission utilities and many other industries, which include in water, airports, railways, steel, renewable energy, nuclear and thermal power stations, and other manufacturing industries.
Overhead Segment Dominated the Market in 2019
Based on installation, the market is divided into overhead, underground, and submarine. The overhead segment holds the largest share in the market owing to technical advantages such as lower installation, maintenance, and material costs, and high power transmission over a long distance. The underground segment is also increasing its market share due to the increasing adoption of smart cities and smart infrastructure. The submarine segment is growing at a steady rate owing to the growing need for transferring telecommunication signals across sea, ocean, and land-based stations.
Power Transmission and Distribution Segment to Lead the Market Share
Based on end-user, the market is segmented into construction, IT & telecommunication, power transmission and distribution, oil & gas, aerospace & defense, and others. Demand from the construction segment is increasing owing to increasing electrical equipment and applications in residential buildings, manufacturing plants, and commercial construction. The power transmission and distribution segment are expected to show significant growth due to increasing investment in grid expansion projects during the forecast period. IT & telecommunication segment is holding the second-largest market share due to the growing demand for data centers and development in cables for transmitting the information.
The oil & gas segment is also growing its market share due to the increasing application of ethernet, VFD, and control and instrumentation cable during operation. The aerospace & defense segment is propelling the demand for wires & cables owing to a wide range of applications in military ground vehicles, shielding and protective covering, airframe point-to-point wiring, and other high-current applications. The others segment includes chemical & petrochemical, railway infrastructure, and automotive industry, where the demand for wire & cables is expected to increase during the forecast period.
Asia Pacific Wires and Cables Market Size, 2016-2027 (USD Billion)
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The market size in Asia Pacific stood at USD 76.50 billion in 2019. Countries such as China and India are significantly increasing investment in expanding their transmission & distribution networks. Besides this, the growing demand for electricity from renewable energy is a major factor attributed to the growth of the regional market. For instance, in November 2019, Asian Development Bank (ADB) planned to invest USD 300 million to expand transmission lines in Greater Dhaka, Bangladesh.
North America is estimated to hold the second-largest market share in the global market. The region’s prominent position is attributable to the increasing renewable energy generation and energy efficiency. For instance, in 2019, the US Energy Information Administration (EIA) projected that the share of total U.S. electricity generation produced by renewables would reach 13% of total production in 2020 as compared to 10% in 2018.
The market in Europe is expected to grow at a significant rate owing to the increasing investment in expanding grid infrastructure and increasing demand for renewable power. As per the Nordic Grid Development Plan 2019, Nordic transmission system operators plan to invest more than USD 16.79 billion by 2028, which is expected to create promising growth opportunities for the market in the coming years.
The market in Middle East & Africa is expected to exhibit healthy growth owing to the increasing investment in renewable projects and grid strengthening projects. In addition to this, market players in this region are making huge investments, which in turn are fueling the demand for wires and cables industry across various industries.
Latin America & the Middle East & Africa accounted for a comparatively lower share of the market owing to the presence of a huge underpenetrated market.
Increasing Number of Agreements & Contracts Among Major Players Has Propelled the Global Market
This market has a consolidated structure owing to the strong product portfolio and remarkable distribution network of major companies in developed and emerging economies. Currently, Prysmian Group, Southwire Company, and Nexans lead the market, accounting for a dominant share in 2019. However, supportive government initiatives for expanding transmission & distribution projects and growing investments in the telecom industry have led to an increase in the number of domestic players entering the market. This is projected to lead to the healthy growth of the market by 2027. For instance, in December 2018, the Government of India invested USD 2.51 billion to provide access to electricity to more than 40 million families in the country.
The wires and cables market research report provides a detailed market analysis. It focuses on key aspects such as leading companies, product types, and leading applications across various industries. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.
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Value (USD Billion)
By End User
Fortune Business Insights says that the global wires and cables market size was USD 184.92 billion in 2019 and is projected to reach USD 273.68 billion by 2027.
Growing at a CAGR of 5.4%, the market will exhibit steady growth in the forecast period (2020-2027).
In 2019, the Asia Pacific market value stood at USD 76.50 billion.
The low voltage segment is expected to be the leading segment in this market during the forecast period.
Increasing investments in transmission & distribution of electric power and growing demand from data centers and telecom industry are major factors driving the growth of the market. However, volatility in raw material prices is expected to restrain the market growth in the forecasted period.
Prysmian Group, Furukawa Electric Co., Ltd., Southwire Company, Nexans, Fujikura Ltd., Sumitomo Corporation, LS Cable & System, and KEI Industries Ltd. are major players of the global market.
Asia Pacific dominated the market share in 2019.
Wire is a single electrical conductor, whereas a cable is a group of wires used for transmitting current and signals in electrical and communication fields. They are used in various end use industries such as oil & gas, marine, automotive, energy & power, and among others.
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