Power converters such as rectifiers (ac-dc), inverters (dc-ac), and dc-dc converters are unavoidable parts in today’s society, being utilized in many applications. The primary use of power converters is to modify the electrical energy from a source (electricity grid, photovoltaic panels…) to the load according to its specific requirements: direct current (dc) or alternating current (ac) and voltage level.
In this article, we’ll examine the application and market trends that will be driving the growth of the power converter market in the years ahead. The focus here is mainly on the automotive and industrial segments, particularly the electric vehicle (EV) and EV charger applications and the renewable energy applications in solar, wind, and energy storage. As part of this discussion, we’ll examine how rising voltage and power levels in these applications are affecting power converter developments.
A $125+ billion Power Converter Market By 2028
The power converter industry represents a great business opportunity for many companies in the supply chain; it was worth US$72.2 billion in 2022 for the applications shown in Fig. 1. According to Yole Intelligence’s Status of the Power Converter Industry 2023 report, it is expected to reach US$125.3 billion by 2028.
In 2022, industrial motors were the largest power converter segment, while xEV power converters are growing substantially and are expected to become the third largest market in 2028 after PV and industrial. Power converters for battery energy storage systems (BESSs) will feature the fastest growth in the coming five years, with a 2022 to 2028 compound annual growth rate (CAGR) of 30.3%.
Amongst the main drivers for power converter markets are governmental targets for CO2 emissions reduction. The rapid deployment of renewable energy sources and the trend toward “electrification of everything” significantly increase the demand for power converters. This includes many applications, from EVs and EV dc charging stations to photovoltaics, wind power, and stationary BESSs and industrial motors.
In recent years, an enormous interest in vehicle electrification has been observed. The initial plan was considered very optimistic, with a rather long transition phase with hybrid electric solutions, such as mild hybrid electric vehicles, full hybrid electric vehicles, and plug-in hybrid electric vehicles. Meanwhile, fuel-cell electric vehicles have been developed in parallel to battery electric vehicles. However, the rapid improvements in battery technology and battery cost reduction driven by, amongst other things, production scaling and growing competition have pushed the industry’s efforts towards full battery electric vehicles (BEVs). BEVs emerged as the dominant xEV segment, projected to exhibit a double-digit CAGR between 2022 and 2028 to 24.1 million vehicles in 2028.
Electric passenger and light commercial vehicles occupy the most space in the media and are a strong focus of companies’ R&D and business expansion strategies. However, this market sees growing cost pressure and increased competition. Moreover, the automotive market is associated with its own rules, which might be very
challenging for some suppliers: automotive qualification, high-volume manufacturing capacities, long-term product warranties, and strong competition.
Therefore, there is a growing interest in non-automotive applications, like photovoltaics, wind, and stationary battery energy storage systems, EV dc charging stations, and industrial motors. Such industrial markets have different drivers and requirements compared to automotive applications in terms of converter density, reliability, lifetime, nominal voltage, and power. This offers business opportunities for a large variety of companies and products. The choice of power devices and system design are evolving to match power systems’ requirements, leading to new technology trends observed across different applications…
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