Phoenix, Ariz. – After two years of stalled growth, the global power semiconductor market grew nearly seven percent in 2014, reaching $32 billion, thanks to increased demand in the industrial and automotive markets, according to IHS Inc. The market research firm forecasts the power IC market to continue on its growth path, increasing sales by five to seven percent in 2015. The power semiconductor market consists of MOSFETs, IGBTs, thyristors, rectifiers, regulators, interfaces and other analog ICs used for power management.
Higher demand in 2014 was led by an increase in power semiconductors used in powertrain, infotainment and advanced driver assistance systems (ADAS) applications in automotive applications, according to the IHS Power Management Competitive Landscaping Tool (PMCLT) part of the IHS Power Management Intelligence Service. In the industrial area, the fastest growth drivers included home control, automation, and energy generation and distribution. Other markets, including consumer, data processing, wired and wireless communication had overall weaker demand in 2014 compared to the previous year.
“Companies that aligned their marketing and investment strategies to address industrial and automotive applications performed very well in 2014,” said Jonathan Liao, senior analyst of power semiconductors for IHS, in a statement. “Texas Instruments, Analog Devices, NXP and Infineon were some of the growth leaders with strong product portfolio offerings in the industrial and automotive categories. By capturing growth momentum, and outshining their competitors, these companies increased their power management revenues more than 10 percent in 2014.”
“On the other hand, companies that were not as successful in transitioning from consumer and wireless communications end markets ended with much lower growth rate – and sometimes even lost revenue in 2014,” he continued.
However, IHS expects the competitive landscape to change dramatically this year due to the Infineon’s acquisition of International Rectifier, and NXP’s pending acquisition of Freescale Semiconductor. “These two mergers will enable Infineon and NXP to be more competitive in technology, manufacturing efficiency, pricing, and marketing strategy. IHS expects a very competitive contest for the market-leader position in the power management semiconductor segment in the coming year,” according to IHS.
By region, the U.S. and China were two of the strongest markets in 2014 for power management suppliers, according to the report. In 2014, 30 percent of all power management semiconductors were shipped to China, due to original equipment manufacturers (OEMs) for wireless handsets and consumer-electronics assemblies. In addition, the report finds that nearly 16 percent of all industrial semiconductors were consumed in China, and the trend is expected to strengthen this year “as China continues to invest in manufacturing, automation, smart cities, transportation and power infrastructure.”
In the U.S., IHS expects consumer spending to increase in 2015, which will drive up sales of consumer electronics, computers, wireless handsets, and automobiles, benefiting the sales of power semiconductors. IHS forecasts the U.S. economy to grow nearly three percent this year.
Looking ahead, Liao expects successful companies to focus on industrial and automotive markets in the near term to ensure continued growth. His forecast: “Global industrial semiconductor revenue is expected to grow 5 percent in 2015, with increased sales in the construction and home-control markets, as well as in energy generation and distribution, and automation markets.”
In the near term, Liao said the top growth industrial segments are LED lighting, Internet protocol (IP) cameras, digital video surveillance products, and smart grid solutions. In the automotive segment, connected cars, ADAS, and infotainment systems are all expected to increase the number of semiconductors shipped in each automobile, as well as the continued trend toward electric vehicles.