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Breaking Foreign Monopoly: The Rise of Domestic Centrifuges
Breaking Foreign Monopoly: The Rise of Domestic Centrifuges
Nov 29, 2021
As a pivotal product in water systems and the core technology of central air conditioning, centrifugal chillers significantly impact a company's operational revenue and brand image, making them an highly enticing "blue ocean."
To break foreign monopolies, domestic brands have also embarked on the path of independent R&D in centrifugal chiller technology. What is the current market landscape, and how can companies navigate this space?
Market Share Quietly Shifts: The Rise of Domestic Centrifugal Chillers
In China's HVAC market, the market share of centrifugal chillers is undergoing a transformation.
In 2017, the five major American brands held 73% of the domestic centrifugal chiller market, while domestic brands, represented by Midea, accounted for only 11.6%.
By the first half of 2021, the market share of foreign (joint venture) brands had dropped to approximately 69.4%, while domestic brands rose to about 30.6%. Among domestic brands, Midea led with a 26.1% market share.
Over more than four years, the market share of domestic brands has doubled, while that of foreign brands has contracted. Midea, Gree, and Haier, the three major domestic brands, now hold the majority share in the centrifugal chiller market, positioning themselves as the new forces shaping its future. Their respective flagship products—Midea's High-Efficiency Direct-Driven Falling Film Centrifugal Chiller, Gree's Permanent Magnet Synchronous Frequency Conversion Centrifugal Chiller, and Haier's Magnetic Bearing Centrifugal Chiller—represent distinct technological paths and development directions.
Behind these shifting numbers lies the fact that domestic centrifugal chiller brands are not only breaking the foreign monopoly but also advancing to higher levels.
Hu Qimu, Chief Researcher at China Steel Economic Research Institute, stated in an interview with Securities Daily: "Currently, frequent policies in areas such as new infrastructure, dual carbon goals, and mass entrepreneurship and innovation are creating favorable conditions for domestic centrifugal chiller manufacturers. Simultaneously, they impose higher requirements in terms of energy savings, emission reductions, high-efficiency stable operation, and intelligent management."
Advancing Independent R&D in Core Technologies to Gain Influence
From the current industry landscape, competition in the central air conditioning market focuses on two areas: the residential retail market, representing the largest segment of fluorocarbon-based systems, and the centrifugal chiller market, representing the pinnacle of water chiller technology.
In recent years, the central air conditioning market has developed rapidly. However, in the realm of large centrifugal water chillers, domestic brands started later and have less experience than foreign brands in R&D, operational models, and product manufacturing, resulting in a significant gap in market share. Companies seeking to expand their operations and enhance their brand stature have been hampered by the lack of centrifugal chiller technology, effectively leaving a critical aspect of their development in others' hands.
In response to these challenges, domestic companies are accelerating independent R&D and strategic.
A representative from Midea Building Technologies told Securities Daily that from independently designing and manufacturing China's first centrifugal water chiller in 1964 to delivering 1,000 centrifugal chillers in 2021 alone, Midea's nearly half-century journey in independent R&D has achieved progress from non-existence to existence, and from existence to excellence. This involved investments totaling billions of yuan.
It is understood that in 2004, Midea jointly established Chongqing Midea General Refrigeration with Chongqing General Industry (Group), introducing all of CGI's compressor design, manufacturing, and testing technologies. Within two years, they launched a variable-frequency centrifugal water chiller, becoming the first domestic enterprise to do so. This broke the pattern of pure technology introduction and filled a national gap. In 2013, their products led the industry into the COP7 era.
To break foreign monopolies, domestic brands have also embarked on the path of independent R&D in centrifugal chiller technology. What is the current market landscape, and how can companies navigate this space?
Market Share Quietly Shifts: The Rise of Domestic Centrifugal Chillers
In China's HVAC market, the market share of centrifugal chillers is undergoing a transformation.
In 2017, the five major American brands held 73% of the domestic centrifugal chiller market, while domestic brands, represented by Midea, accounted for only 11.6%.
By the first half of 2021, the market share of foreign (joint venture) brands had dropped to approximately 69.4%, while domestic brands rose to about 30.6%. Among domestic brands, Midea led with a 26.1% market share.
Over more than four years, the market share of domestic brands has doubled, while that of foreign brands has contracted. Midea, Gree, and Haier, the three major domestic brands, now hold the majority share in the centrifugal chiller market, positioning themselves as the new forces shaping its future. Their respective flagship products—Midea's High-Efficiency Direct-Driven Falling Film Centrifugal Chiller, Gree's Permanent Magnet Synchronous Frequency Conversion Centrifugal Chiller, and Haier's Magnetic Bearing Centrifugal Chiller—represent distinct technological paths and development directions.
Behind these shifting numbers lies the fact that domestic centrifugal chiller brands are not only breaking the foreign monopoly but also advancing to higher levels.
Hu Qimu, Chief Researcher at China Steel Economic Research Institute, stated in an interview with Securities Daily: "Currently, frequent policies in areas such as new infrastructure, dual carbon goals, and mass entrepreneurship and innovation are creating favorable conditions for domestic centrifugal chiller manufacturers. Simultaneously, they impose higher requirements in terms of energy savings, emission reductions, high-efficiency stable operation, and intelligent management."
Advancing Independent R&D in Core Technologies to Gain Influence
From the current industry landscape, competition in the central air conditioning market focuses on two areas: the residential retail market, representing the largest segment of fluorocarbon-based systems, and the centrifugal chiller market, representing the pinnacle of water chiller technology.
In recent years, the central air conditioning market has developed rapidly. However, in the realm of large centrifugal water chillers, domestic brands started later and have less experience than foreign brands in R&D, operational models, and product manufacturing, resulting in a significant gap in market share. Companies seeking to expand their operations and enhance their brand stature have been hampered by the lack of centrifugal chiller technology, effectively leaving a critical aspect of their development in others' hands.
In response to these challenges, domestic companies are accelerating independent R&D and strategic.
A representative from Midea Building Technologies told Securities Daily that from independently designing and manufacturing China's first centrifugal water chiller in 1964 to delivering 1,000 centrifugal chillers in 2021 alone, Midea's nearly half-century journey in independent R&D has achieved progress from non-existence to existence, and from existence to excellence. This involved investments totaling billions of yuan.
It is understood that in 2004, Midea jointly established Chongqing Midea General Refrigeration with Chongqing General Industry (Group), introducing all of CGI's compressor design, manufacturing, and testing technologies. Within two years, they launched a variable-frequency centrifugal water chiller, becoming the first domestic enterprise to do so. This broke the pattern of pure technology introduction and filled a national gap. In 2013, their products led the industry into the COP7 era.
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