POWER ELECTRONICS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Power Electronics Market Size and Trends

The global power electronics market is estimated to be valued at US$ 48.16 Bn in 2024 and is expected to reach US$ 71.13 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 5.7% from 2024 to 2031.

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The rapid adoption of renewable energy sources and increasing demand for energy-efficient power management solutions from various end-use industries such as industrial, residential, transportation, and utilities is driving significant growth in the global power electronics market.

The market is witnessing increasing demand for silicon carbide (SiC)- and gallium nitride (GaN)-based power semiconductors owing to their superior characteristics such as higher efficiency, faster switching capabilities, and smaller size over conventional silicon-based components. Additionally, the growing adoption of electric vehicles worldwide is further propelling the need for the adoption of advanced power electronics for efficient on-board power management and charging infrastructure.

Rising demand for energy-efficient electronics

The global emphasis on greener energy sources and reduced carbon emissions has increased the demand for power electronics applications around the world. Power electronics help optimize energy usage in various industries such as consumer electronics, automotive, industrial machinery, medical devices, and renewable energy generation. They allow precise control over electrical currents and help devices operate more efficiently.

Consumer awareness regarding energy conservation has never been higher. People want products that can perform multiple tasks but consume low power. This is driving innovations in power management integrated circuits that improve the efficiency of devices without compromising on performance. Variable frequency drives controlled by power electronics are also gaining popularity as they help electric motors use only as much power as they need. The renewable energy sector is heavily dependent on power conversion systems as well. Solar panels and wind turbines generate DC power that needs to be inverted for transportation over long distances or feeding into commercial power grids. Power converters play a vital role in maximizing yields from renewable sources and minimizing transmission losses.

Governments across the world are introducing stringent regulations and incentives to curb emissions. The European Union has mandated that all new vehicles sold from 2021 should emit no more than 95 grams of CO2 per kilometer. This is putting pressure on automakers to develop hybrid and electric vehicles. Sophisticated onboard chargers and DC-DC converters are essential for electric vehicles to charge quickly and extend driving range. Other industries are also under regulatory pressure to reform manufacturing processes and switch to cleaner alternatives. Power electronics are proving indispensable for process optimization aiming to meet environmental compliance standards. With rising environmental awareness and tougher emission norms, the demand for energy-efficient power electronics can be expected to grow substantially in the coming years.

For instance, in May 2023, Toshiba Electronics Europe introduced a new 150V N-channel power MOSFET, the TPH9R00CQ5, which is based on the company's latest generation U-MOS X-H Trench process technology. This power MOSFET has been specifically designed for high-performance switching power supply applications, such as those found in communication base stations and other industrial equipment.

Market Concentration and Competitive Landscape

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Rise of electric mobility and automation

The automotive sector is undergoing rapid transformation influenced by newly emerging technologies. Automakers are investing heavily in developing electric, autonomous, and connected vehicle solutions to stay ahead of the curve. According to many estimates, electric vehicles will dominate new car sales in less than two decades due to favorable regulations, improved battery technology, and charging infrastructure investment. Power converters are essential components for electric vehicle powertrains, on-board charging systems, and efficient energy management. Batteries used in EVs also require sophisticated battery management systems (BMS) powered by embedded microcontrollers and power ICs.

Key Takeaways from Analyst:

The global power electronics market is experiencing robust growth, with North America leading the charge and Asia Pacific emerging as the fastest growing region. North America's dominance can be attributed to the region's strong presence of major players like Infineon Technologies, ON Semiconductor, and Texas Instruments. These companies are leveraging their technological expertise and vast distribution networks to capture a significant market share.

Asia Pacific, on the other hand, is poised for accelerated growth in the coming years. The rapid deployment of renewable energy projects and the increasing adoption of electric vehicles in countries like China, India, and Japan are driving the demand for power electronics in the region. Governments across Asia Pacific are implementing favorable policies and incentives to promote the adoption of clean energy technologies, further propelling the market's expansion.

The power electronics market is also benefiting from the surge in demand for energy-efficient products across various industries, including data centers, automotive, and consumer electronics. The growing need to reduce carbon emissions and improve energy efficiency is pushing manufacturers to invest in advanced power electronics solutions. Wide bandgap semiconductors, such as silicon carbide (SiC) and gallium nitride (GaN), are gaining traction in the market due to their superior performance and efficiency compared to traditional silicon-based devices.

As the global economy recovers from the impact of the COVID-19 pandemic, the demand for power electronics is expected to rebound, particularly in the automotive sector. The increasing production of electric vehicles and the growing adoption of advanced driver-assistance systems (ADAS) are creating new opportunities for market players.

To capitalize on these growth opportunities, leading companies are focusing on strategic acquisitions, partnerships, and product launches to strengthen their market position and expand their product portfolios. The power electronics market is poised for continued growth in the coming years, driven by the increasing demand for energy-efficient solutions and the rapid adoption of clean energy technologies across various industries.

Market Challenges: Thermal management challenges

Power electronic devices such as IGBTs, MOSFETs, and diodes generate a significant amount of heat during their operation as there is conversion of electrical to mechanical energy or vice versa. Effective heat dissipation from these devices is crucial to ensure optimum performance, reliability and longevity of the power electronic systems. However, with rapid advancement in power semiconductor technology and increasing demand for compact and high-powered systems, thermal management is becoming an increasingly acute issue.

The heat flux from modern wide bandgap semiconductor devices like SiC and GaN is much greater than conventional silicon-based components used in power electronics earlier. Next-generation semiconductors while providing faster switching speeds and higher energy efficiencies, also produce more heat per unit area compared to silicon.

Market Opportunities: Emergence of connected and smart technologies

Connected devices and IoT ecosystems are facilitating greater optimization, control and integration of power systems. Advanced technologies like artificial intelligence and machine learning are enabling more autonomous and adaptive management of power generation, transmission and consumption. This allows for improved reliability, higher efficiencies and reduced environmental impact.

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Insights By Component - Rise of electric vehicles drives the module segment growth

In terms of component, module is expected to contribute 53.7% share of the market in 2024 owing to its widespread use in electric vehicles. Modules integrate multiple discrete components together, reducing assembly effort and enhancing reliability. They allow easy upgrading of existing systems. The module segment is poised to grow considerably with the rising penetration of EVs worldwide. Government incentives and legislation to curb emissions are accelerating the EV adoption. Modules consisting of IGBTs, diodes, and gate drivers are crucial for electric powertrains to control motors. Leading automakers are heavily investing in next-generation EV technologies, boosting the demand for more powerful modules that can handle higher voltages. Modules are also preferred over discrete components in industrial motor drives, solar inverters, and wind turbine generators due to their compact size and durability. With renewable energy gaining prominence, the module segment is well-placed to gain long-term.

Insights By Material - Surging adoption of SiC in EV power electronics

In terms of material, Silicon Carbide (SiC) is expected to contribute 45.4% share of the market in 2024 owing to its unparalleled advantages over silicon. As EVs require power electronic switches that can handle higher voltages, frequencies and temperatures, SiC is emerging as the material of choice. It enables power devices to operate at voltages 10X higher than traditional silicon devices without excessive cooling. This allows greater power densities and miniaturization of components. SiC switches also reduce conduction and switching power losses remarkably. As a result, less energy is wasted as heat, enhancing EV driving ranges. SiC’s excellence at higher frequencies permits smaller passive components and motors in EVs. Leading automotive chipmakers are actively developing next-gen SiC modules, charging infrastructure and onboard chargers for future vehicles. Additionally, governments supporting domestic SiC industries will accelerate its adoption curve in the coming years.

Insights By end-use industry  - Energy and power sector spearheads demand

In terms of end-use industry, energy and power is expected to contribute 36.4% share of the market in 2024 owing to the criticality of efficient power conversion across utility infrastructure. Power electronics play a key role in renewable energy harvesting, long-distance power transmission, flexible AC transmission systems, energy storage systems, and microgrids. The global energy transition towards renewable sources such as solar, wind, and tidal energy is stimulating power electronics spending. Optimum performance over their lifespan is crucial for solar inverters, wind generators and smart grid technologies. Investments in upgrading aging utility infrastructure with reliable power semiconductors are also growing worldwide. Additionally, demand from data centers, electric vehicle charging, and developing industrial sectors will sustain healthy growth opportunities in the energy and power end-use industry. Advancements in SiC and GaN technologies are expected to make renewable energy generation more affordable and scalable in the forthcoming years.

Regional Insights

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North America has established itself as the dominant region in the global power electronics market. The region is expected to account for 35.8% of the market share in 2024. With major players based in the U.S. and Canada, the region is at the forefront of technological advancements in this field. It has a strong industrial and automotive manufacturing base which has helped boost the demand for power electronics over the years. Several new product developments and innovative solutions originating from North American companies have set global benchmarks.

The presence of an advanced infrastructure in place to support R&D as well as adoption of new technologies provides an edge to the region. North American players actively collaborate with application industries to build customized solutions. Their solutions often include value-added services and focus on energy efficiency. This level of customization and the additional value proposition have helped them gain significant market share globally.

Emerging economies in Asia Pacific present high growth opportunities for power electronics companies. China especially has turned into a global manufacturing hub which has driven the need for efficient power management across industries. Countries like India are also aggressively working to ramp up their manufacturing capabilities. The widespread focus on building local manufacturing capacities coupled with the expanding middle-class population will continue spurring demand.

The region has witnessed massive capacity additions in sectors like renewable energy, electric vehicles, and consumer electronics which are key application areas. This fast-paced industrialization aligns well with the government's initiatives to reduce carbon emissions through efficient energy utilization. Overall, the confluence of favorable government policies, growing electronics consumption, and huge investments in manufacturing make Asia Pacific the fastest expanding regional market for power electronics globally.

Market Report Scope

Key Developments

• In June 2023, Mitsubishi Electric Corporation announced the development of a novel chip structure that integrates a silicon carbide metal-oxide-semiconductor field-effect transistor (SiC-MOSFET) with a Schottky barrier diode (SBD). This innovative design has been incorporated into Mitsubishi Electric's 3.3 kV full SiC power module, the FMF800DC-66BEW, which is targeted at large industrial applications such as railways and DC power systems.
• In May 2023, Infineon introduced two new additions to its CoolSiC power module portfolio - the FF2000UXTR33T2M1 and FF2600UXTR33T2M1. These modules utilize Infineon's newly developed 3.3 kV CoolSiC MOSFET technology and the company's proprietary XT interconnection technology. Designed specifically for traction applications, the power modules come in Infineon's XHP 2 package, which enables low switching losses while maintaining high reliability and power density.
• In May 2023, Infineon Technologies AG introduced its latest generation of power MOSFET devices for automotive applications - the OptiMOS 740 V MOSFET family. This new product line leverages 300 mm thin wafer technology and innovative packaging to deliver significant performance improvements in a compact form factor.
• In January 2023, Renesas Electronics announced the development of a new gate driver IC designed to efficiently drive high-voltage power devices, including insulated gate bipolar transistors (IGBTs) and silicon carbide (SiC) MOSFETs, for use in electric vehicle (EV) inverters.

*Definition: The global power electronics market comprises companies that design, manufacture, and sell various power electronics components such as thyristors, transistors, switches, power ICs, modules, and discrete semiconductor devices. Power electronics are used to control and convert electric power efficiently by solid-state devices and passive components. They are extensively used in automotive, consumer electronics, renewable energy, electric vehicles, industrial, and other sectors to condition and control the flow of electric power. The global power electronics market is forecast to grow significantly driven by increasing adoption of power electronics in various end-use industries.

Market Segmentation

•  Component Insights (Revenue, US$ Bn, 2019 - 2031)
  • Discrete
  • Module
•  Material Insights (Revenue, US$ Bn, 2019 - 2031)
  • Silicon/Germanium
  • Silicon Carbide (SiC)
  • Gallium Nitride (GaN)
•  End-use Industry Insights (Revenue, US$ Bn, 2019 - 2031)
  • Automotive
  • Consumer Electronics
  • IT and Telecommunication
  • Military and Aerospace
  • Industrial
  • Energy and Power
  • Others
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • ABB
  • Analog Devices, Inc.
  • Efficient Power Conversion Corporation
  • Euclid Techlabs
  • Fuji Electric Co., Ltd.
  • Infineon Technologies AG
  • Littelfuse, Inc.
  • Microchip Technology Inc.
  • Mitsubishi Electric Corporation
  • Navitas Semiconductor
  • NXP Semiconductors
  • ON Semiconductor
  • Qorvo, Inc.
  • Renesas Electronics Corporation
  • ROHM CO., LTD.