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The global wires and cables market size was USD 184.92 billion in 2019 and is projected to reach USD 269.46 billion by 2027, exhibiting a CAGR of 5.0% during the forecast period.
A wire is a single electrical conductor, whereas a group of wires bundled in an assembly is called a cable. Various cables, such as coaxial cables, are widely used for transmitting electric power and communication signals across industry verticals. Increasing investments in the transmission & distribution of electric power and the growing demand from data centers and the 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 for wires & cables globally. Significant investments in smart grid technology have resulted in an increasing need for grid interconnections. Additionally, rising investments in underground cables and the growth of renewable energy are set to escalate the adoption of wires and cables.
COVID-19 Pandemic: Lockdown Measures in China to Decline Demand
Amid COVID-19, industries across the globe, such as automotive and aviation, are experiencing a negative impact on their businesses. Manufacturing activities are generally considered essential as they drive the industrialization of underdeveloped economies globally, and therefore, have been mostly exempted from lockdown measures. As a result, the demand for wires and cables has remained stable in this sector. But, the spread of the COVID-19 pandemic poses a significant threat to the global wires and cables industry.
Emerging economies such as China and India are the major countries for establishing new power plants, 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 lockdown, it would disrupt the supply chain and significant delays in the new installations in offices and commercial applications. These would hamper the growth of the cable industry.
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Increasing Demand for Renewable Power Generation is a Vital Trend
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 are also a prominent factor responsible for the growth of renewable power generation, which, in turn, would further drive the demand for wires and cables. According to EIA's International Energy Outlook 2019 report, 28% of the global power came from renewable energy in 2018, with the 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 is a Current Trend
The increasing number of data centers and IT facilities for higher levels of availability, security, and affordable connectivity of IT infrastructure would increase the applications 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 are the prominent network cables used in data centers for Ethernet applications. According to Cisco, the global cloud data center traffic is projected to reach 20.6 zettabytes (ZB) per year by 2021, up from 6ZB per year in 2016. It depicts an increase of 628 hyperscale data centers globally in 2021 compared to 338 in 2016.
Increasing Investments in Transmission & Distribution of Electric Power to Fuel Demand
Increasing investments in the transmission & distribution (T&D) sector for effectively transmitting power to different electrical equipment at various stages of the network is a major factor attributable to the growth of the market. For instance, in India, grid spending increased to USD 20 billion, mainly 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. It is 60% higher than the current levels. Investments in digital grid technologies increased by 10 percent, thereby reaching USD 35 billion in 2018. According to the World Energy Investment statistics, the investment in T&D infrastructure is expected to rise to USD 6.8 trillion between 2014 and 2035.
Surging Investments in Industrial Sector and Rising Urbanization to Fuel Growth
According to the World Investment Report 2018, Asia Pacific exhibited an investment worth USD 476 billion of inflow from foreign direct investment in 2017, which was majorly contributed by China and Singapore. Rapid urbanization is likely to escalate the energy demand, thereby resulting in the need for power grid interconnections in densely populated areas. It would hence generate high demand for various cables.
Volatility in Raw Material Prices to Restrain Market Growth
The primary raw materials required for the manufacturing of 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 prices of raw materials, especially copper, directly impacts the wires & cables manufacturers’ profit margin, which may restrain the market growth.
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Low Voltage Segment to Lead Backed by Increasing Usage in Video Surveillance
Based on voltage, the market is segmented into low voltage, medium voltage, high voltage, and extra-high voltage. The low voltage segment dominates in terms of 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 wires and cables are widely used for power distribution between high voltage mains power supply, low voltage applications, and 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 would also generate more share due to the growing government initiatives for expanding the grid. It is preferable for power transmission & distribution purposes in utilities and commercial applications. The extra-high voltage cable is mostly used in power transmission utilities and many other industries, including water, airports, railways, steel, renewable energy, nuclear and thermal power stations, and other manufacturing industries.
Construction and Power Transmission & Distribution Segments to Hold Significant Share
Based on the end-user, the market is segmented into aerospace & defense, construction, IT & telecommunication, power transmission and distribution, oil & gas, consumer electronics, manufacturing, automotive, and others. Subsequently, various segments are further subcategorized into different divisions. The demand from the construction sector is increasing owing to the surging electrical applications in residential and commercial establishments. The power transmission and distribution segment is expected to account for a significant share due to the increasing investment in grid expansion projects during the forecast period.
The IT & telecommunication segment is projected to observe considerable growth due to the high demand for data centers and development cables for transmitting the information. The oil & gas segment is backed by the increasing application of high voltage power, automation, VFD, control, instrumentation, and fiber optic cables during operation. The aerospace & defense segment is set to propel the demand for wires and cables due to the usage of a wide range of military ground vehicles, shielding, protective covering, airframe point-to-point wiring, and other high-current applications.
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The industry is analyzed across five key regions, including North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa, with further divisions at country levels. The market size in Asia Pacific stood at USD 76.50 billion in 2019. Countries such as China and India are significantly increasing investments in expanding their transmission & distribution networks. Besides this, the rising demand for electricity from renewable energy is a major factor attributed to regional market growth. For instance, in November 2019, the Asian Development Bank (ADB) planned to invest USD 300 million to expand the transmission lines in Greater Dhaka, Bangladesh.
North America is estimated to hold the second-largest market share globally. The region’s prominent position is attributable to the increasing renewable energy generation and energy efficiency. For instance, in 2019, the U.S. Energy Information Administration (EIA) projected that the share of the total U.S. electricity generation produced by renewables would reach 13% of the total production in 2020, as compared to 10% in 2018.
The market in Europe is expected to grow significantly due to the increasing investment in expanding the grid infrastructure and the high demand for renewable power. As per the Nordic Grid Development Plan 2019, Nordic transmission system operators are planning 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.
Latin America & the Middle East & Africa are projected to observe a considerable growth rate due to the huge underpenetrated demand. For instance, the Middle East & Africa is expected to exhibit healthy growth due 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 would fuel the demand for wires & cables across various industries.
Major Players Focus on Offering Diverse Portfolios to Compete in Market
This market has a consolidated structure due to its strong product portfolio and remarkable distribution network of major companies in developed and emerging economies. Numerous cable manufacturing companies are actively participating in the global, regional, and country levels across the world.
Currently, Prysmian Group, Southwire Company, KEI Industries, Sumitomo Corporation, and Nexans are projected to be shaping the competitive landscape through their diverse product offerings. However, supportive government initiatives for expanding transmission & distribution projects and growing investments in the telecom industry are leading to an increase in the number of domestic players entering the market. This is projected to result in the healthy growth of the market by 2027. For instance, in December 2018, India's Government invested USD 2.51 billion to provide access to electricity to more than 40 million families in the country.
An Infographic Representation of Wires and Cables Market
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The wires and cables market research report provides a detailed analysis of the market. It focuses on key aspects such as leading companies, product types, and leading applications across various industries. Besides this, the custom research report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, it encompasses several factors that have contributed to the developed market's growth over recent years.
Value (USD Billion)
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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