Power electronics: meeting the shift towards electrification and renewable energy trends

The power electronics industry is evolving to meet energy and sustainability demands. Yole Intelligence, part of Yole Group, provides an update in its Status of the Power Electronics Industry report, examining how the power device industry addresses key drivers and new technologies and analyzing wafer and device demand vs manufacturing capacity evolution.

One of the key market drivers for power electronic devices is electrification in transportation and industrial processes. Increased electricity consumption has led to a need for more sources of electricity, for example, wind turbines and solar photovoltaic installations, all of which require power electronic devices. Needs to improve efficiency result in the use of newer devices, materials, and packaging to reduce energy consumption. In addition to the substantial reduction of CO₂ emissions achieved through the widespread adoption of electric vehicles (EVs) and the utilization of green mobility solutions, the integration of renewable energy sources, such as photovoltaics and wind power, is instrumental in promoting environmental sustainability. Another sustainability consideration is local supply to reduce dependency on raw materials and energy imports during geopolitical conflicts, as we have seen with Russia and Ukraine and US-China trade relations affecting availability.

The total power device market is expected to grow rapidly from about $23 billion in 2023 to $33.3 billion by 2028. This calls for building up new manufacturing capacities. Strategic investment decisions will be based on existing capacities and expected device volume needed and the silicon, SiC, and GaN shares in various applications.

To meet the volume demands, silicon device players need to evolve, and there is a strong trend to move to 300 mm lines to increase capacity and reduce costs per bare die. Silicon wafers can be used for other microelectronic devices (e.g., sensors), which will make the decision to invest in 300 mm equipment less risky compared to transitioning from 150 mm to 200 mm SiC wafers.

Both Integrated Device Manufacturers (IDMs like Infineon, Bosch, Toshiba, Nexperia, CR Micro, etc.) and foundries (SMIC, HHGrace…) have taken decision to move to 300 mm wafers. Some players, such as Infineon, Alpha & Omega, Bosch, onsemi, and Silan, already have 300 mm production, while others, including STMicroelectronics, are starting volume production in 2023, and more companies will start in 2024-2026.  In 2021, Infineon Technologies and Bosch expanded fab capacity for 300-millimeter wafers and announced plans for further expansion of 300 mm capacities. Other players will follow suit, including many Chinese companies (massive investment of BYD for example). Chinese companies are expected to ramp up quicker than European or US companies in 2024-2026 to manufacture for the local EV market.

On the SiC side, driven mainly by the EV segment, SiC devices will represent about 25% of the market value for power electronic devices in 2028. The GaN power device market is driven mainly by consumer fast chargers and smartphone and computer adapters. SiC adoption is faster than GaN, which started a little later, but both are gaining a share of the conventional silicon technology market.

In the case of SiC, where SiC wafer cost and availability have been major issues, there is a lot of vertical integration in the supply chain between the wafer and the device. Big players, Wolfspeed, onsemi, Rohm Semiconductor, and STMicroelectronics operate across the entire supply chain from boule/substrate, epitaxy, chip processing, and diode/transistor design, with smaller players from China, such as TankeBlue and SICC, operating in the SiC boule/substrate space. A few SiC device manufacturers (Infineon, Bosch…) rely on external supply of SiC wafers. Chinese players are progressively gaining market share at the SiC wafer level, and significant capacity is planned in the coming five years, targeting more than 40% of the total capacity in 2027. Depending on the factories utilization rate, production yield and wafer quality, SiC wafers may thus become largely available and offered at lower price from Chinese suppliers. Such a reversal of SiC wafer demand/offer situation would significantly modify the rules of the game in the SiC and silicon device businesses. The availability of cheaper SiC devices would not only impact SiC players with high-cost structure but would also accelerate SiC device adoption in many applications as an alternative to silicon devices.

There has been a big increase in bare die production, and investment in packaging must follow to avoid a potential bottleneck in the future, especially for power modules. Already, some companies are partnering for packaging while some are investing internally to increase packaging capacities. Investments worth around $2-4 billion were made by Infineon Technologies, STMicroelectronics, and ASE Group in packaging, and this is expected to continue increasing to meet device demand.

Ana Villamor, Ph.D., is a Team Lead Analyst for power electronics activities within the Power and Wireless division at Yole Intelligence, part of Yole Group.

Ana Villamor manages an international team and develops the team’s technical expertise and market expertise.

In addition, she actively supports and assists in developing a dedicated collection of market & technology reports and custom consulting projects.

Prior to Yole Intelligence, Ana Villamor was involved in a high-added-value collaboration within the CNM research center and ON Semiconductor, a leading power electronics company. During that partnership and two years as a Silicon Development Engineer, Ana Villamor has acquired extensive technical expertise and in-depth knowledge of the power electronics industry.

Dr. Villamor has authored and co-authored several papers, as well as a patent. She holds a Ph.D. in electronics, an Electronics Engineering degree, and a master’s in Micro and Nano Electronics from the Universitat Autonoma de Barcelona in Spain.

Milan Rosina, Ph.D., is a Principal Analyst, Power Electronics and Batteries, at Yole Intelligence, part of Yole Group, within the Power & Wireless division. He is engaged in the development of the market, technology and strategic analyses of innovative materials, devices, and systems. His primary areas of interest are e-mobility, renewable energy, power electronic packaging, and batteries.

Dr. Rosina has 20 years of scientific, industrial, and managerial experience involving equipment and process development, due diligence, technology and market surveys in the fields of renewable energies, EV/HEV, energy storage, batteries, power electronics, thermal management, and innovative materials and devices.

He received his Ph.D. from the Grenoble Institute of Technology (Grenoble INP) in France.

Dr. Rosina previously worked for the Institute of Electrical Engineering in Slovakia, Centrotherm in Germany, Fraunhofer IWS in Germany, CEA LETI in France, and utility company ENGIE in France.