3 April 2012

Power electronics discrete component market to grow to $15bn in 2020

The quest for increased energy efficiency has re-energized power electronics, with new materials such as silicon carbide and gallium nitride gaining market share, says Lux Research.

Based on a resurgence in innovation, power electronics is poised to grow to $15bn in discrete components in four key industry segments (buildings and industrial, electronics and IT, renewables and grid storage, and transportation) in 2020. It’s also moving beyond its historic dependence on silicon, with silicon carbide (SiC) and gallium nitride (GaN) taking a 22% market share ($3.3bn), according to ‘Beyond Silicon: Plotting GaN and SiC’s Path within the $15 Billion Power Electronics Market’, the inaugural report from Lux Research’s new Energy Electronics Intelligence service (which covers LEDs and power electronics).

“There’s clearly a growing opportunity in power electronics, but the challenge for both current market players and would-be entrants is finding the places where these emerging technologies meet customer needs at the right price points,” says analyst Pallavi Madakasira (lead author of the report).

“While consumer electronics is a ‘here and now’ opportunity, fast-growing industries such as renewable energy and industrial power applications are likely to challenge power electronics manufacturers to innovate on form factor and improve efficiency at the lowest cost,” she adds.

To forecast the adoption of emerging power electronics technologies, Lux Research analysts calculated the payback period for SiC and GaN devices and calculated market shares based on the required payback period for each application, as well as delaying or accelerating factors that reflect industry conservatism, design cycles, timing for capacity build-outs, and other industry drivers. Their findings include the following:

• SiC and GaN vie for a slice of the silicon pie. With silicon-based power electronic devices reaching theoretical limits, other semiconductors (notably SiC and GaN, which promise better performance and energy savings) are making inroads into the power electronics industry: SiC will gain a 14% market share and GaN an 8% share. SiC, with its better maturity and reliability, has a head start, but GaN will catch up due to new entrants such as Efficient Power Conversion (EPC) and Transphorm as well as incumbents such as International Rectifier.
• SiC grows in renewables, GaN gains in electronics. SiC is gaining the most in renewables (capturing a 32% market share in solar) and is poised to capitalize on the grid storage boom. Its adoption in transportation is less aggressive, leading SiC and GaN to a relatively even share (at 16% and 15%, respectively) in 2020. GaN eclipses SiC in IT & electronics (carving out 14% share in 2020) and flourishes in smaller-scale applications within buildings in a broad $2.4bn market.
• VCs make big bets and corporations jockey for position. Over the past five years, investors have funneled over $200m into developers of advanced materials and devices for power electronics. On the venture side, Transphorm, EpiGaN, GaN Systems and Azzurro have closed notable funding rounds, while corporate investments and acquisitions such as TranSiC (Fairchild), SiCed (Infineon), SiCrystal (Rohm) and Crysband (SKC) have continued apace. This year promises to be a record-setting one for transactions, with particular attention on substrate and GaN technology developers, reckons Lux Research.

Lux Research will also explore these findings in a complimentary webinar on 10 April at 11am EDT.

See related items:

GaN power semiconductor market to exceed $1bn by 2021

GaN power electronics market may top $1bn in a few years

Next-gen power semiconductors to grow at CAGR of 72%

RF & power electronics opportunities for GaN market growth

Tags: Power semiconductors GaN SiC

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