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Power Electronics Market Overview
The global power electronics market is projected to grow from $12.9 billion in 2015 to $20.0 billion by 2022. Advancements in technology, expansion in the application base of power electronics, and increase in the adoption of renewable energy sources are the key factors supporting the growth of the market across the world.
Devices that convert one form of electrical energy into another are known as power electronics. Based on end user, the power electronics market is broadly categorized into power and energy, automotive, industrial, consumer electronics, information and communications technology (ICT), and aerospace and defense. Among these, the consumer electronics industry held the largest share in the market in 2015.
GLOBAL POWER ELECTRONICS MARKET BY VOLTAGE $M (2012–2022)
Consumer products such as laptops, televisions, smartphones, LCDs, computers, and DVDs are primarily supported by the integrated power electronics technology. The swift adoption of advanced technologies and the need to maintain stable power supply in these devices are the key factors responsible for the escalating consumption of power electronic solutions in the consumer electronics industry.
The power electronics sector has undergone a huge transformation in the last 30 years. Further, the technology application has increased, owing to the emergence of semiconductor devices and microprocessors. Moreover, the development and use of wide band gap (WBG) semiconductor devices is expected to result in a breakthrough in the power electronics industry. This can be attributed to the use of superior materials such as SiC, and GaN, among others that allow devices to operate at high speeds, voltage, and temperature.
Silicon carbide (SiC) and gallium nitride (GaN) are the two major WBG materials with the potential to enhance the efficiency of power electronics considerably. Silicon-based products supporting applications of less than 600 volts are expected to be replaced by GaN-type WBG semiconductors; moreover, the latter product category is expected to play a crucial role in radio frequency (RF) and power supply applications in the near future.
The deployment of power electronic technology in the renewable energy sector is also supporting the growth of the power electronics market. The penetration of power electronic devices in utility applications and the rising demand for higher power density in electronics are the key factors driving the market growth.
Power Electronics Market Dynamics
Heavy investments in research and development (R&D), growing application base of the technology in various industries, and increasing need for energy conservation are the major trends being observed in the power electronics market, globally.
In recent years, manufacturers in the power electronics market have spent a considerable amount of capital on R&D to introduce advanced products, increase their market share, and stay ahead of their competitors. R&D is important for such enterprises, as it facilitates innovation, thus offering them a competitive advantage. In addition, a key aspect that consumers consider while purchasing power electronic devices is the product efficiency, which can be achieved or enhanced via R&D. Due to these factors, companies are expected to continue making investments in R&D in the near future.
The number of applications of power electronic devices is increasing in various sectors, particularly in the automobile industry. The demand for power electronic devices in the automotive industry is being propelled by the development of electric vehicles (EVs) and hybrid electric vehicles (HEVs). Additionally, the rise in the number of infotainment applications in automobiles is creating the requirement for these devices with higher power density. Such devices are also finding application in the defense sector, wherein they provide the military with a reliable energy source to help with their weapon and communication needs. Healthcare, consumer electronics, and telecom are some other sectors where the application of these devices is increasing.
Vendors in the power electronics market are currently offering power electronic devices for a wide range of applications. Besides, major market players are focusing on energy conservation through product innovation to remain ahead in the competition. They are increasing the power density of their products, which, in turn, is increasing the cost of these devices. However, the surge in power density makes these devices more efficient, thus helping end-users in conserving energy in the long run.
The major factors leading to the growth of the power electronics market are the penetration of power electronic devices in utility applications and increasing requirement for higher power density in electric rail traction drives, wind power generators, inverter systems, and solar power generators.
Power electronic devices ensure the power is delivered effectively, thus offering high security, reliability, and flexibility to the power system. Such devices are playing a key role in converting existing electrical grids into next-generation networks. Presently, approximately 30.0% of the total power is either generated or consumed using power electronic devices. It is being projected that by 2030, power electronic devices will be used for up to 80.0% of the electricity produced.
The high product cost is a major factor restraining the growth of the power electronics market. Power discrete devices have a high power density with the ability to handle high power surges in the 0–1,000 amp range. Therefore, the use of power electronic devices is limited in applications such as low-voltage motor control, welding, and uninterruptible power supply (UPS).
Besides, the economic slowdown in developed countries is hampering the growth of the power electronics market to a certain extent. For instance, the 2007–2009 economic slowdown in Europe led to a fall in industrial activity. Similarly, the expiration of the renewable electricity production tax credit in the U.S. is hampering renewable energy production and wind turbine installation, wherein power electronic devices are widely used.
Moreover, power converters, electrical interconnects, interface materials, and substrates, which are parts of these devices, have a high failure rate, poor life cycle, and high maintenance cost. The root cause behind this is the power load (voltage, cyclic load, temperature) of these components that exceed the design strength. This factor limits the adoption of these devices to some extent, thus restricting the growth of the power electronics market.
Power Electronics Market Competitive Landscape
The global power electronics market is witnessing intense competition owing to the presence of a large number of market players. The high intensity of competition is also due to the healthy CAGR of the market. Other reasons for this are low differentiation among products and low switching cost. Infineon Technologies AG, NXP Semiconductors N.V., ON Semiconductor, STMicroelectronics N.V., Microsemi Corporation, Vishay Intertechnology Inc., Texas Instrumentation Inc., Toshiba Corporation, and ABB Ltd. are some of the key players operating in the power electronics industry.