Market Trends of Japan Uninterrupted Power Supply (UPS) Industry
This section covers the major market trends shaping the Japan UPS Market according to our research experts:
Industrial Segment Expected to Dominate the Market
- An Uninterrupted Power Supply (UPS) system is used in various industrial applications, such as nuclear power plants, oil rigs, petrochemical plants, pharmaceutical plants, and food and beverage industries. Due to the rugged environments in which industrial uninterruptible power supply systems are installed, the interruption of AC power can lead to process instability and costly damage to processing systems. These environments also have higher ambient temperatures and more contamination in the air. Hence, UPS systems are designed to withstand extreme temperatures and moderate amounts of non-conductive dust.
- UPS system is a crucial support system for the continued operation of industrial-grade infrastructure. They are commonly used to maintain critical infrastructure during a major failure. Moreover, an industrial-grade UPS can supply the crucial infrastructure with power stored within its battery until the mains power supply is restored in the event of a short-lived power outage. When there is a significant power outage, it will provide power to the critical infrastructure component till a secondary power source can be connected.
- Due to the rising pollution levels caused by diesel generators, many countries are banning the use of diesel generators in industrial applications. During the combustion of diesel fuel, diesel generators emit carbon dioxide, carbon monoxide, nitrogen oxides (NOx), and particulate matter. For instance, one liter of diesel fuel produces 0.73 kg of pure carbon and 2.6 kg of carbon dioxide. Many industrial applications use a UPS system for short-term blackouts in order to reduce air pollution. Lead acid or lithium-ion batteries are often used.
- The country witnessed high inflows of Foreign Direct Investment (FDI) in the manufacturing sector, with a value of JPY1356.84 billion (USD 9.95 billion) in the year 2021. In the last couple of years, there has been a significant rise in the fourth industrial revolution, i.e., Industry 4.0. Incorporating new technologies into production facilities and operations, such as the Internet of Things (IoT), cloud computing and analytics, artificial intelligence, and machine learning, is revolutionizing manufacturing processes. To maintain power and streamline production during power outages, many companies use a USP to stabilize the power and minimize downtime for their manufacturing processes.
- Therefore, based on the above-mentioned factors, the industrial segment is expected to dominate the growth in the UPS market during the forecast period.
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Increasing Investment in Data Centers to Surge the Demand for UPS
- Data centers are integral to organizations designed to support business applications and provide services such as data storage, management, etc. A UPS plays a crucial role in data centers in providing backup power and avoiding data crashes, data loss, hardware damage, etc.
- As of January 2022, Japan was the ninth largest market having around 207 data centers. There has been a stable growth in demand for UPS, with the growing investments in data centers.
- Many big IT giants have shown interest in owning data centers in Japan. For example, in October 2022, Google announced constructing of a new data center in the Inzai city of Japan, with an earmarked investment of USD 730 million. This is the company's third data center at the global level, which is expected to be operational in 2023.
- In February 2022, GLP announced a substantial plan to enter the Japanese data center market, with 900 megawatts (MW) of power capacity planned. Over the next five years, GLP intends to invest more than USD 12 billion to support Japan's increasing demand for high-performance and environmentally friendly data centers. The country's two major economic clusters, Greater Tokyo and Greater Osaka, are the most active and demanding areas for online consumption and digital applications, driving the data center market.
- Overall, the increasing investments in data centers are expected to create a massive demand for UPS during the forecast period.
