Power Semiconductor Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Power Semiconductor Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The global power semiconductor market is anticipated to register a CAGR of 3.3% during the period. Power semiconductors perform the same tasks as regular semiconductors, only on a much larger scale. These high-performance components are capable of handling extremely high electrical currents, voltages, and frequencies up to several gigawatts. Like all semiconductor devices, power semiconductors are used to rectify and amplify electrical signals or turn the flow of electricity on and off. These are typically used for industrial applications and the long-distance transmission and distribution of electricity.

Key Highlights

• The material is majorly comprised of Silicon Carbide (SiC) and Gallium Nitride (GaN). Compared to silicon, GaN and SiC have a wider bandgap (Si:1.1, SiC:3.3, and GaN:3.4), and, therefore, it is also called Wide Band Gap Semiconductors. SiC MOSFETs and diodes offer high switching frequency and high power density and are ideally suited for electric vehicle onboard chargers. The electric vehicles industry is catering to rapid growth owing to initiatives from several governments across the world.
• In May 2022, Infineon Technology AG and Vitesco Technologies, a global provider of the latest drive technologies and electrification solutions, signed a partnership agreement to develop silicon carbide power semiconductors. The efficiency of high-voltage power electronics in the drive systems of electrified cars is significantly improved by silicon carbide. For instance, SiC components are used by Vitesco Technologies in extremely small high-voltage inverters that manage electric drive motors. SiC components are already being used in the present generation of electronics since they allow for compact sizes and high efficiency.
• The new joint laboratory contains major equipment required for device and application evaluation in automotive applications, such as onboard chargers (OBCs) and DC/DC converters. The firms expect that this will allow them to strengthen their partnership and accelerate the development of SiC-based power solutions.
• Power delivery brings more intelligence to the charger and enables the detection of the device connected to it. This allows the charger to deliver the precise amount of power needed to charge it in the shortest possible time. A charger with GaN (Gallium Nitride) increases efficiency, lowers the heat, and decreases each product’s size.
• Moreover, In May 2021, the Japanese government announced under their yearly growth agenda that the island country planned to increase spending to ramp up the local production of advanced semiconductor devices. The government pledged JPY 200 billion to support the domestic chipmaking industry and aims to hold a 40% global share in next-generation power semiconductors by 2030.
• Furthermore, power requirements are increasing in every market, as global requirements for electricity are anticipated to increase from 25,000 TWh currently to 38,000 TWh in the year 2050. At the sector level, 8 million data centers in the world use 2-3% of the world’s energy use, and that share is expected to rise to more than 5%. Industrial motors consume 30% and growing; electric vehicles will become large consumers of 5% of global energy consumption by 2040 (source: GaN Systems). GaN reduces losses in all these systems.
• With the onset of the COVID-19 pandemic and the steep nosedive sales in the consumer electronics segment, the market demand for SiC power semiconductors from the consumer electronics industry witnessed impeded growth rates. As per data from the March 2020 survey by IPC International, Inc., 40% of the global electronics manufacturers and suppliers surveyed stated that consumer electronics were expected to be the most impacted industry due to the COVID-19 outbreak.

Key Market TrendsAutomotive Industry Expected to Have Significant Growth

• Electric cars are becoming common on the road nowadays with prices coming down and range going up. In addition, electric vehicles are becoming common on the road nowadays, with prices coming down and range going up. According to the International Energy Agency, plug-in electric light vehicle sales globally reached around 6.6 million in 2021.
• In the past few years, many OEMs have announced billions of dollars worth of investment in EVs, which is also strong due to the restrictions on CO2 emissions. Key steps will be taken in the coming years, and a higher percentage of EVs on the road will be seen. Semiconductors play a key role in both electric vehicles and those with internal combustion engines.
• Research has been undergoing when it comes to the use of silicon carbide (SiC) devices within the automotive powertrain. Due to recent advancements, it is gradually becoming a feasible solution.
• The number of electric vehicles out on the streets is expected to keep multiplying as governments continue to incentivize clean energy and manufacturers find ways to make their cars more accessible. A big part of making that possible is the ongoing innovation in battery technology, driven by the demand for smaller, lighter, and safer batteries that charge faster and last longer. For instance, Tesla, which uses a rapid charging solution, is already using SiC within its vehicle architectures today.
• SiC semiconductors are ideal for applications, such as onboard chargers and inverters used within plug-in hybrid (PHEV) and fully electric vehicles (EVs). This is because their energy efficiency is significantly higher compared to traditional silicon.
• To ensure that EVs can operate over long distances and charge within a reasonable timeframe, the vehicle’s power electronics must be capable of handling high temperatures. SiC semiconductors benefit from more than 95% energy efficiency, i.e., only 5% of the energy is lost as heat during power conversion instances, such as recharging the vehicle at a high-power rapid-charger.
• Further, in May 2021, Infineon Technologies launched a new power module with CoolSiCMOSFET technology for automotive applications. The use of silicon carbide instead of silicon ensured higher efficiency in converters in electric vehicles. Hyundai Motor Group reported that it was able to increase the range of its vehicles by more than 5% because of efficiency gains resulting from the lower losses of this SiC solution compared to the Si-based solution with the help of the traction inverters based on Infineon’s CoolSiCpower module.

Asia Pacific Expected to Have Significant Growth

• The Asia Pacific region is expected to dominate the global power semiconductor market, as the region dominates the global semiconductor market, which is further supported by government policies. Moreover, the region's semiconductor industry is driven by China, Japan, Taiwan, and South Korea, which together constitute around 65% of the global discrete semiconductor market, while others like Vietnam, Thailand, Malaysia, and Singapore also contribute significantly to the region's dominance in the market.
• According to the Indian Electronics and Semiconductor Association, the country's semiconductor component market is expected to be worth USD 32.35 billion by 2025, registering a CAGR of 10.1% (2018-2025). The country is a lucrative destination for global R&D centers. Thus, the government's ongoing 'Make In India' initiative is expected to result in investments in the semiconductor market.​
• Moreover, the region is an electronics hub with millions of electronic devices made annually for consumption in the region and exported to other places. This high production of electronic devices and components significantly contributes to the market share of the market studied.​ For instance, the increasing demand for consumer electronics in India has also facilitated the regional market's growth. According to IBEF, Demand for electronics hardware in India is expected to reach USD 400 billion by FY2024. which will further drive the market growth.
• Moreover, Vivo announced from its official Indian Twitter handle that its flagship X80 Pro smartphone will soon receive the Android 13 Preview build. Although it's not the only model, the iQOO9 Pro is confirmed to receive the Preview later this month. Both smartphones from the Chinese OEMs are set to accept the Android 13 Preview build by August 23, 2022. In addition, in August 2022, Vivo announced the V25 Pro smartphone in the Indian market. It is the most delinquent V series model from the Company. The gadget packs a triple camera setup with a 64-megapixel primary sensor, an 8-megapixel ultra-wide-angle lens, and a 2-megapixel macro shooter.
• Furthermore, countries like China and the United States are the world's largest consumer electronic markets, with combined revenues of over USD 350 billion, according to the Consumer Technology Association. However, emerging countries like India and Brazil fuel the demand and advancements in the studied segment. For instance, according to the government's data, the Indian appliances and consumer electronics industry is projected to double to INR 1.48 lakh crore by 2024 - 2025. This is further anticipated to boost the need for compound semiconductors.
• To address market needs, power semiconductor manufacturers are quickly adopting materials such as silicon carbide (SiC), which can operate at higher voltages, temperatures, and frequencies, while delivering improved efficiency and reliability.
• Furthermore, in February 2021, Silicon Power Corporation opened its subsidiary, the SiCfabrication unit, in Halol(Gujarat), India, bringing many opportunities for the Indian Electronics sector. The opening of this new SiCfabrication will not only accelerate India's objective to create and develop a "Make in India" Electronic devices Industry but also reduce dependence on imports, especially from China.

Competitive Landscape

The power semiconductor market is a consolidated market dominated by a few major players. In terms of market share, few of the major players dominate the market. Various acquisitions and collaborations of large companies are expected to take place shortly, which focus on innovation. Some of the key players in the market are Infineon Technologies and Texas Instruments.

• March 2021 - Magnachip launched a new Low-dropout (LDO) linear regulator featuring an ultra-fast transient response for a Universal Flash Storage (UFS)-based Multi-Chip Package (MCP). It is an advanced version of an Embedded Multi-Media Controller (eMMC), which was developed for concurrent read and write performance at higher speeds.
• March 2021 - Alpha and Omega Semiconductor announced the new AEC-Q101 qualified 1200V silicon carbide (SiC) αSiC MOSFETs. This is ideal for the high efficiency and reliability requirements of electric vehicles (EV) onboard chargers, motor drive inverters, and off-board charging stations.
• February 2021 - Nexperia extended the LFPAK56D MOSFET line-up with the AEC-Q101-qualified half-bridge package. It offers 60% lower parasitic inductance and improved thermal performance for power trains, motor control, and DC/DC application.

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