Market Challenges: High manufacturing cost

High manufacturing cost is one of the major factors restraining the growth of the global intelligent power module market. Intelligent power modules require complex semiconductor fabrication and packaging processes which makes their production quite expensive. These modules typically involve embedding power semiconductors such as insulated-gate bipolar transistor (IGBT), metal–oxide–semiconductor field-effect transistor (MOSFET), and diodes onto a small package along with gate drive and protection circuitry. The assembly procedures include precise die placement, wire bonding, encapsulation and various testing steps which drive up the overall manufacturing costs. Additionally, the use of advanced materials like ceramics and compounds for the substrate and encapsulation further increases expenses.

The capital investment required for setting up a manufacturing line for intelligent power modules is also quite high. Advanced fabrication equipment needed for wafer thinning, dicing, packaging and various backend processes costs millions of dollars. This large initial outlay impacts the economies of scale negatively during the early stages. Furthermore, achieving high production yields during mass manufacturing is challenging given the minute tolerances involved. Even small defects can cause entire modules to be scrapped, reducing margins for the manufacturers. This makes intelligent power modules less profitable to produce until sales volumes cross a certain threshold.

Market Opportunities: Adoption of IoT devices

The widespread adoption of Internet of Things (IoT) devices presents a great opportunity for the global intelligent power module market in the coming years. As more "smart" devices and appliances get connected to the internet, there will be a growing need for power modules that can efficiently and reliably control the power delivery to these networked devices.

IoT deployments are surging across various sectors such as industrial automation, automotive, healthcare, consumer electronics etc. With rising adoption of IoT endpoints, the demand for intelligent power modules featuring advanced power management, enhanced protection and optimized performance will also rise significantly. Most modern IoT devices rely on power modules not just to derive power but also to effectively manage power consumption which is critical to prolong their working life as well as reduce energy costs.