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The global reed relay market size is estimated to be USD 352 million in 2022 and is projected to reach USD 1,125 million by 2030, at a CAGR of 15.6% during the forecast period. The reed relay market is driven by the growth of increasing adoption of EVs. Reed relays are used in the batteries of EVs. According to International Energy Agency’s Tracking Clean Energy Progress report, EV sales doubled and made up 9% of the car market by the end of 2021 with more cars being sold in the European and Chinese markets. The share of EV car sales is expected to grow by 6% annually until 2031 to reach net zero by 2050. The IEA’s scenario for reaching net zero by 2050 sets out a milestone of EVs making up 60% of new car sales by 2030, with more than 300 million EVs on the road by that point. Due to such reasons, the growing EV market is likely to drive the demand of reed relays.
The rising number of EV charging stations is likely to bring opportunities for the reed relay distributors. For instance, the 2014 Alternative Fuel Infrastructure Directive (AFID) in the European Union regulates the deployment of public EV supply equipment and it recommends EU member Reed relays, as a result, may face an increased demand due to the rapid development of EV charging infrastructure around the world.
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The European region, by country, has been segmented into Germany, the UK, Italy, Poland, France, and the Rest of Europe. The reed relay market in Europe is highly influenced by the rise in investments in the end-user industries such as construction, industrial manufacturing, mining, home appliances, building equipment, food & beverage, energy and infrastructure, and automobile applications, among others. For instance, The governments of all European countries are focusing on improving grid reliability, enabling smarter power networks. As a result, high investments are required to be made in Germany, Italy, and Poland to stabilize and increase renewable power utilization in Europe, and it generates high demand for the reed relay market. Apart from this, the demand for reed relays has been growing across Europe with the increasing usage of relays in energy & infrastructure, household appliances, food & beverage industries, etc.
The renewables segment is expected to be the fastest growing segment of the reed relay market. The renewables segment is expected to grow at the fastest CAGR of 25.4% as the expansion of renewables and a global tendency toward efficient energy consumption have boosted interest in energy storage solutions. Renewable energy technology projects are typically large-scale, but they are also suited to rural and remote areas and developing countries, where energy is often crucial in human development.
The 200 V–500 V voltage segment is projected to be the fastest growing segment of the reed relay market. The 200 V–500 V reed relay market is expected to grow at a comparatively faster pace during the forecast period. Reed relays of this voltage rating can carry current at 2.5 A resulting in a power rating of 50 W. They are designed to stand up and save space in cases where the printed circuit board is limited. With flexibility in the number of channels, these reed relays are highly popular due to their customizability. The multiple switching features offer high-voltage switching elements and require a much lower level of power to actuate them than other traditional types of reed relays.
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China is expected to grow at the highest CAGR of 16.4% during the forecast period. Asia-Pacific (excl. China) is expected to grow at the CAGR of 15.7% during the forecast period. China is the key production base of all types of relays in the world, with its output holding more than 50% of the global total. Driven by the expanding demand from downstream markets, China’s reed relay sales and output showed home appliance relays and automotive relays, as the main categories in the Chinese relay market. The industrial segment is expected to be the fastest-growing market for reed relays in the country. The country plans to pump up the spending on infrastructure to boost economic growth. It got permission for 17 fixed-asset investment projects worth USD 15.5 billion. The country has also accelerated 300 infrastructure projects valued at USD 1.1 trillion in 2021, as policymakers shored up the growth in the region. Moreover, the country’s infrastructural development has translated into foreign direct investments in some of its industrial and manufacturing sectors. The Chinese government’s active support has increased the number of value-addition industries, translating into the country’s overall industrial growth in sectors such as telecommunication, wind & solar power, petrochemical processing, automotive, and steel. This would create a huge demand for reed relays.