Global sales of air conditioning compressors stood at USD 28,600.3 million in 2024. The industry is further projected to exhibit a y-o-y growth of 4.2% in 2025 and reach USD 30,030.3 million in the same year, surging at a CAGR of 5.0% between 2025 and 2035, demand for the air conditioning compressor is estimated to reach USD 48,916.2 million by 2035.
The air conditioning compressor market has grown rapidly due to rising global temperatures, urbanization, and increasing demand for energy-efficient HVAC solutions. Changes in technology, regulations, and environmental sustainability pressures are shifting the market towards continuous development.
This growth is directly influenced by the increase in various end-use sectors, including residential, commercial, and industrial sectors, as well as the transportation sector, all of which have been consistently growing over the past couple of years.
| Attributes | Key Insights |
|---|---|
| Estimated Size, 2025 | USD 30,030.3 million |
| Projected Size, 2035 | USD 48,916.2 million |
| Value-based CAGR (2025 to 2035) | 5.0% |
It is further estimated that due to global warming, this requirement of such cooling systems, especially air conditioners, already attained its zenith and shall keep showing their speedy growth in the years that come in the near future.
While the climatic condition continues to get drastically altered worldwide, demand related to energy-efficient systems such as air conditioning compressors is likely to leap at a rampant rate in the forthcoming years. According to a report provided by NASA, the average temperature of the globe is likely to rise to 1.5 °C within the next decades. The factor is likely to continue to keep the shutter of growth opportunities open for air conditioner compressor manufacturers.
Meanwhile, the data center industry is highly developing in both national and international markets. These require highly efficient series of cooling applications to reduce the environmental footprint from the data center and maximize the equipment performance of a data center.
Thus, the demand for data centers regarding cooling applications is growing; hence, the demand for air conditioning compressors is also likely to increase rapidly and result in massive demand for manufacturers globally. The global air conditioning compressor market presently represents around 40 to 45% of its parent market, refrigeration compressors.
Exclusive Offer: 30% Off on Regional Reports
Get a free sample report and customize your regions for a 30% discount on your regional report!
The table below presents the annual growth rates of the global air conditioning compressor market from 2025 to 2035. With a base of 2024 and extended to the current year 2025, the report studied how the industry growth trajectory moves from the first half of the year i.e., January to June (H1) to the second half comprising July to December (H2). This is an absolute comparison to offering the stakeholder's idea of how the sector has performed over time, with hints on developments that may possibly emerge.
These figures indicate the growth of the sector in each half-year between the years 2024 and 2025. The market is expected to grow at a CAGR of 4.7% in H1-2024. In H2, the growth rate increases.
| Particular | Value CAGR |
|---|---|
| H1 2024 | 4.7% (2024 to 2034) |
| H2 2024 | 5.1% (2024 to 2034) |
| H1 2025 | 4.8% (2025 to 2035) |
| H2 2025 | 5.2% (2025 to 2035) |
Moving into the subsequent period, from H1 2025 to H2 2025, the CAGR is projected to slightly decrease to 4.8% in the first half and relatively increase to 5.2% in the second half. In the first half (H1), the sector saw an increase of 10 BPS, while in the second half (H2), there was a slight increase of 10 BPS.
Rising Demand for Industrial Cooling Systems in Data Centers and Cold Storage Facilities
The growing industrial sectors, mostly data centers and cold storages are recording increasing demand for industrial cooling systems at a remarkable growth rate. Data centers represent critical IT infrastructures, which have to be sustained at optimized operating temperatures, helped by cooling solutions.
According to IEA estimates, data centers were expected to contribute about 1% toward global electricity demand back in 2021, due in part to the high energy usage of cooling. Advanced cooling solutions are likely to be in demand with the rapid adoption of cloud computing and AI technologies.
Other key areas driving demand involve cold storage facilities. The global cold storage market is set to record a CAGR of 12.5% from 2024 to 2030, propelled by increasing frozen and processed food consumption and the need for temperature-controlled storage, mainly of pharmaceuticals, especially vaccines.
Industrial cooling compressors are hence important in this process to maintain the stipulated temperatures of these places that would mean quality and regulatory compliance. Innovations related to energy-efficient and eco-friendly refrigerants are also underway in this segment.
The Impact of Energy Efficiency Standards on Compressor Innovation
Energy efficiency standards will increasingly become drivers in compressor design and deployment as efforts are intensified globally to cut down energy consumption and reduce greenhouse gas emissions.
In this light, different regulatory bodies like the EU and the DOE in the United States have already begun introducing tough policies on minimum energy performance for HVAC systems and industrial equipment. The EU, for instance, through its Ecodesign Directive, prescribes efficiency requirements, compelling innovation and better energy-efficient compressors from the manufacturing world.
Inverter-based compressors and scroll compressors are also gaining a foothold in the HVAC sector for their potential to vary cooling output based on instantaneous demand and thus bring down energy consumption drastically. Efficiency gains in the cooling systems alone could knock up to 45% off global electricity use by 2050, says the IEA.
Going towards energy-efficient compressors is a step toward energy efficiency, but most importantly, it would give them quite a big assurance in terms of major financial advantages such as cost-cutting and lower energy bills, which is the top agenda within their sustainability and cost-effectiveness context.
The Shift to Inverter Compressors Is Driving Energy Efficiency in Cooling Systems
The demand for inverter compressors is accordingly gaining momentum in different parts of the world, primarily due to their higher energy efficiency compared to conventional fixed-speed compressors.
While the conventional model runs at a constant speed independent of cooling demand, in an inverter compressor, the speed changes dynamically with every real-time change in demand. This modulation feature has a drastic reduction in energy intake, hence making these favored for residential, commercial, and industrial cooling systems.
Some studies illustrate that inverter compressors may save 30-50% of energy compared with non-inverter compressors. Demand has grown rapidly for these compressors in countries like Europe and North America, where the cost of energy is quite high and the environmental policy is strict. For example, energy efficiency regulations in the European Union have spurred manufacturers to develop products on inverter technology to meet the compliance standards.
Inverter compressors can keep the indoor temperature steady with minimal fluctuation and cause less noise when working. In addition, the emergence of inverter compressors has become highly symbolic of current trends being witnessed within both the HVAC and refrigeration industries, with increasingly sustainable and cost-effective solutions.
Impact of Refrigerant Regulations on Compressor Design
The stringency in global regulations related to HFCs and CFCs is one of the strong factors affecting the design and development of compressors. Traditionally, these refrigerants have been conventionally used in air conditioning and refrigeration systems but were found to be major contributors to ozone depletion and global warming. International agreements such as the Montreal Protocol and its Kigali Amendment have called for the phasing down of high-GWP refrigerants, forcing innovation upon the manufacturers.
In order to meet these regulations, compressor designs are increasingly being adapted to work with low-GWP and natural refrigerants, such as carbon dioxide (CO2), ammonia (NH3), and hydrocarbons like propane and isobutane. This transition is not without its challenges. Natural refrigerants often require higher operating pressures or more precise safety measures, demanding robust and advanced compressor technologies.
The retrofitting or replacement of the existing systems with new refrigerants is expensive on the part of the end users. Despite such odds, the shift to being environmentally friendly propels technology to meet the set compliances in support of global sustainability goals.
Tier 1 companies include industry leaders with annual revenues exceeding USD 1000-2000 million. These companies are currently capturing a significant share of 50-61% globally. These frontrunners are characterized by high production capacity and a wide product portfolio.
They are distinguished by extensive expertise in manufacturing and a broad geographical reach, underpinned by a robust consumer base. The firms provide a wide range of products and utilize the latest technology to meet regulatory standards. Prominent companies within Tier 1 include Emerson Electric Co., Daikin Industries Ltd., LG Electronics, The Danfoss Group, and others.
Tier 2 companies encompass mid-sized participants with revenues ranging from USD 500-1000 million, holding a presence in specific regions and exerting significant influence in local economies. These firms are distinguished by their robust presence overseas and in-depth industry expertise.
They possess strong technology capabilities and adhere strictly to regulatory requirements. However, the firms may not wield cutting-edge technology or maintain an extensive global reach. Noteworthy entities in Tier 2 include Tecumseh Products Company LLC, Panasonic Corporation, GEA Group AG, and Johnson Controls-Hitachi Air Conditioning.
Ltd. Tier 3 encompasses most of the small-scale enterprises operating within the regional sphere and catering to specialized needs with revenues below USD 100-500 million. These businesses are notably focused on meeting local demand and are hence categorized within the Tier 3 segment.
They are small-scale participants with limited geographical presence. In this context, Tier 3 is acknowledged as an informal sector, indicating a segment distinguished by a lack of extensive organization and formal structure in comparison to the structured one. Tier 3 includes BITZER SE, Midea Group (GMCC), Officine Mario Dorin S.p.A., and others.
The section below covers assessments of air conditioning compressor sales across key countries. Countries from East Asia and Latin America are anticipated to exhibit promising double-digit growth over the forecast period. All the below-listed countries are collectively set to reflect a CAGR of around 5.0% through the forecast period.
| Countries | Value CAGR (2025 to 2035) |
|---|---|
| India | 5.6% |
| China | 5.2% |
| USA | 4.9% |
| Germany | 4.8% |
| Japan | 4.6% |
The China air conditioning compressor market has dominated the world market with the majority share. Several factors work in unison to ensure that it remains ahead of the competition. Economies of scale are another important factor, considering that more than 60% of the world's air conditioners are manufactured in China, which in turn creates huge demand for compressors locally.
Its advanced manufacturing infrastructure, which includes an integrated supply chain and precision engineering capability, is capable of producing at a lower cost. Competitive labor costs further strengthen the position of China as a preferred manufacturing hub for global brands like Daikin and Carrier. Government policies also play a very important role in offering subsidies for energy-efficient technologies and incentivizing exports.
Further developments included government-supported research and development efforts related to green and energy-efficient compressors. At the same time, fast urbanization and the improvement in the disposable income of local surge demand for air conditioning systems, making a very robust domestic market. In fact, over 100 million pieces were made in China in 2023 alone, further concretizing its leading position concerning such a vital component of HVAC systems.
The United States represents the largest consumer of air conditioning compressors, mainly due to high residential and commercial demand for HVAC systems within the country. The most important factor is the climate of the country, where many regions have long, hot summers, especially in the South and Southwest.
About 87% of USA homes have air conditioning, according to the USA Energy Information Administration (EIA), well above the global average. This pervasive preference for central air over mere room or window units further extends the demand on high-capacity compressors.
Apart from this, due to comfort and the controlled environment, the office, malls, and industrial facilities also create a high demand. The trend of going towards energy-efficient HVAC systems, encouraged by federal and state incentives, upgraded and replaced the existing ones, hence pushing consumption.
Stricter energy regulations in the USA HVAC market, such as those by the Department of Energy's SEER standards, are also driving the demand for advanced compressors. All these factors combined make the USA a leading consumer in this market.
In India, the demand for air conditioning is increasing sharply, contributed to by a number of factors. Urbanization contributes significantly: as of 2023, more than 35% of the population lives in cities, and that figure will continue to grow. High temperatures, especially due to climate change, have hugely raised the demand for cooling, especially during the summer months when the temperature goes above 40°C in most regions.
The rise in the standard of living and high disposable incomes has opened access to air conditioning among middle-class consumers, making it shift from a luxury to a necessity. The government initiatives like the BEE Star Labeling Program also encourage the use of energy-efficient appliances. Other schemes, such as Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME), are also promoting greener practices, helping the HVAC sector in the country indirectly.
Moreover, the manufacturing sector is picking up in India, thereby creating demand for industrial cooling. With less than 10% air conditioning penetration rate, the market holds immense growth potential.
Check Free Sample Report & Save 40%!
Select your niche segments and personalize your insights for smart savings. Cut costs now!
The section explains the growth trajectories of the leading segments in the industry. In terms of product type, the rotary category will likely dominate and generate a share of around 75.0% in 2024.
Demand for Power Distribution Generation Components to Surge in the Next Ten Years
| Segment | Rotary (Product Type) |
|---|---|
| Value Share (2024) | 56.8% |
Sales of rotary-type air conditioning compressors are estimated to account for more than 56.8% of the overall air conditioning compressor industry by the end of 2035. This can be attributed to the rising popularity of rotary air conditioning compressors across residential and industrial sectors due to their various attractive benefits.
Rotary-type air conditioning compressors are simpler, more reliable, and more efficient than other types of compressors. Further, these compressors are quiet, have a modest footprint, and do not suffer from vibration as much as other compressors. As a result, they are the preferred option when operating noise is a factor.
Rotary-type air conditioning compressors are being increasingly used in large chillers and small air conditioners. Thus, increasing production and sales of these devices will eventually generate high demand for rotary compressors during the forecast period.
| Segment | R290 (Refrigerant Type) |
|---|---|
| Value Share (2024) | 31.1% |
Based on refrigerant type, the global market is segmented into R410A, R22, R404A, R134A, R290, R32, and others. Among these, the R290 refrigerant segment is projected to hold more than 31.1% share of the global air conditioning compressor industry by 2035. This can be attributed to the various advantages, such as extended cooling capacity, better efficiency, and the eco-friendly nature of R290 refrigerant.
R-290 has excellent thermodynamic performance, and it is very reliable and energy efficient. Its low ozone-depleting properties and minimum global warming potential (GWP) make it one of the most climate-friendly refrigerants globally.
For the R290 type of refrigerant when used in air conditioners, the coefficient of performance is 10 to 15% higher than that of another refrigerant type. In commercial, industrial, and home systems, R290 is well suited for a wide range of refrigeration and air conditioning applications. It is at least 99.5 percent pure and has very few contaminants (moisture, unsaturated carbohydrates). These factors drive the sales of R290-type refrigerants in air conditioning appliances.
The section provides comprehensive assessments and insights that highlight current opportunities and emerging trends for companies in developed and developing countries. It analyzes advancements in manufacturing and identifies the latest trends poised to drive new applications in the market.
A few key players in the air conditioning compressor industry are actively enhancing capabilities and resources to cater to the growing demand for the compound across diverse applications. Leading companies also leverage partnership and joint venture strategies to co-develop innovative products and bolster their resource base.
Significant players are further introducing new products to address the increasing need for cutting-edge solutions in various end-use sectors. Geographic expansion is another important strategy that is being embraced by reputed companies. Start-ups are likely to emerge in the sector through 2035, thereby making it more competitive.
Industry Updates
In terms of Cooling Capacity, the industry is divided into Less than 5 KW, 5 to 30 KW, 30 to 100 KW, 100 to 300 KW, 300 to 500 KW, 500 to 1,000 KW, Above 1,000 KW.
In terms of Product Type, the industry is divided into Reciprocating, Screw, Centrifugal, Rotary, and Scroll.
In terms of Refrigerant Type, the industry is divided into R410A, R407C, R404A, R134A, R290, R744, Others
In terms of End Use, the industry is divided into Refrigeration, Air Conditioning.
In terms of Application the industry is divided into Residential, Commercial, Medical & Healthcare, Industrial, Transportation
Key countries of North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia, Middle East and Africa (MEA), have been covered in the report.
The global market was valued at USD 28,600.3 million in 2024.
The global market is set to reach USD 30,030.3 million in 2025.
Global demand is anticipated to rise at 5.0% CAGR.
The industry is projected to reach USD 48,916.2 million by 2035.
Emerson Electric Co., Daikin Industries Ltd., LG Electronics, The Danfoss Group, Tecumseh Products Company LLC, Panasonic Corporation. are prominent companies.
| Market CAGR (2023 to 2033) | 8.2% |
|---|---|
| Market Size (2023) | USD 3.12 billion |
| Market Size (2033) | USD 6.86 billion |
| Market Valuation (2023) | USD 35.1 billion |
|---|---|
| Market Valuation (2033) | USD 47.2 billion |
| Market CAGR (2023 to 2033) | 3% |
| Market Size (2023) | USD 38,687.2 million |
|---|---|
| Market Size (2033) | USD 58,940.03 million |
| Market CAGR (2023 to 2033) | 4.3% |
Explore Operational Equipment Insights
View Reports
Air Conditioning Compressor Market
Thank you!
You will receive an email from our Business Development Manager. Please be sure to check your SPAM/JUNK folder too.
