Vehicle hybridisation will drive the power electronics market for the foreseeable future, in what French firm Yole Developpment forecasts as “the golden era for electric vehicles.”
The "golden era for electric vehicles," will propel the power electronics market, according to French firm Yole Developpement. The firm says the forecast will turn to reality if customers adopt the driving technology and governments continue to subsidise the field.
The driving power of electric and hybrid vehicles (EHV) was outlined in Yole’s report Status of The Power Electronics Industry 2016, which also focused on market forecasts for wafers, inverters, MOSFETs and IGBTs through 2021. It also touches on industry consolidation.
Last year was difficult for power electronics as the market contracted, with the global value of power ICs, power modules and discrete components decreasing 3% from $15.7 billion to $15.2 billion mainly due to a drop in the average selling price (ASP) of IGBT modules. EHV will represent a major part of the IGBT module market by 2021 while the power MOSFET market is expected to reach $1.2 billion for all applications in the same timeframe.
Figure 1: EV/HEV will represent a major part of IGBT market in 2021. (Source: Status of the power electronics industry 2016, June 2016, Yole Developpement)
“We expect this ASP trend to continue, mainly because of price pressure from the automotive market. But overall IGBT module and global power electronics market value should increase, as volume growth outweighs this ASP fall,” wrote Coralie Le Bret, technology and market analyst at Yole.
Power density increasing will be the main focus of the EHV industry in coming years. Overmolded modules and double side cooling will become mainstream in the future, Yole continued, particularly for mid-power, low-cost applications. Yole added that module design may evolve and remove packaging layers to optimise thermal management.
Yole analysts added that politics will play a big role in the future of EHV – particularly renewable energy and electrified vehicles – as well as the power electronics market. According to Yole’s nominal scenario, the power electronics market will reach $27 billion by 2030, but a “more pessimistic approach” to the political landscape would create a much different figure.
Figure 2: Power electronics market evolution: two possible paths. (Source: Status of the pwoer electronics industry 2016, June 2016, Yole Developpement)
Another trend identified by Yole’s analysts focuses on wide band gap (WBG) technologies, where the adoption of WBG solutions will be generalised. Many companies already offer WBG-enabled devices and/or are involved in different R&D projects.
“WBG devices are used in some applications thanks to the high energy density they offer and their efficiency,” said Le Bret. “In the future we expect multi-sourcing and price decrease to favor the WBG materials penetration. Packaging will have to be developed in accordance with the device in order to take the best of it.”
Competition and consolidation
The market slowdown in 2015 impacted the power electronics revenues of most industry players, although some companies managed to increase their revenues between 2014 and 2015. Infineon showed the most growth – following its acquisition of International Rectifier, the company’s power electronics revenues went up 20% year-over-year. When taking into account power transistors, diodes and modules, the group leads the power electronics industry.
Figure 3: The market slowdown in 2015 impacted the power electronics revenues of most industry players, although some companies managed to increase their revenues between 2014 and 2015. Infineon showed the most growth – following its acquisition of International Rectifier, the company’s power electronics revenues went up 20% year-over-year. When taking into account power transistors, diodes and modules, the group leads the power electronics industry. (Source: Status of the power electronics industry 2016, June 2016, Yole Developpement)
To compete, other companies have turned to high R&D investments, diversification and acquisitions. Chinese companies are concerned by this landscape evolution, especially as they try to capture added-value and master the overall power electronics manufacturing process, Yole wrote.
In the first five months of 2016, two companies from China acquired European silicon wafer manufacturing companies. Chinese players are also hiring experts and building fabs to manufacture power devices internally. This may have a big impact on power electronics industry, as more than a third of the IGBT market is currently in China.
Figure 4: Consolidation of power electronics landscape is ongoing. (Source: Status of the pwoer electronics industry 2016, June 2016, Yole Developpement)
The battle for the acquisition of Fairchild between ON Semiconductor and the consortium of China Resources Microelectronics and Hua Capital Management will further affect the power electronics marketplace. Fairchild is highly involved in the automotive field, an application where ON Semiconductor may be weaker. Acquiring Fairchild would give the combined company easier access to the automotive market.
“Expected consolidation in this landscape will surely bring contested deals and counter-offers, as players seek to strengthen to compete at a similar level,” Yole wrote.