Reshaping the landscape of the power electronics industry: the game is on

The merger of Semikron and Danfoss, confirmed in August 2022, marks an acceleration in the reshaping of the global supply chain within the power electronics industry. According to Yole Intelligence’s report, Status of the Power Electronics Industry, the total power semiconductor market is set to be worth $59.6 billion by 2027, with an impressive 2021 – 2027 CAGR of 4.4%. Yole Intelligence is part of Yole Group. It is, therefore, no surprise that conventional power electronics players are adopting new strategies to hold or improve their position in this very competitive market requiring high production capacity and specific technological know-how.

Among the strategies raised by Yole Intelligence to meet these conditions, mergers and acquisitions (M&As) come first. Like Danfoss and Semikron, key players will have to join forces to gain positions and close the gap in the power semiconductor domain with the front-runner, Infineon Technologies, followed distantly by onsemi and STMicroelectronics.

At the wafer and die level, the industry trend is moving toward manufacturing on 300 mm silicon wafers and 200 mm SiC wafers to increase production capacity and reduce costs. The last three years have seen the first wave of production site expansions, with a peak in 2021, and a second wave is expected in 2024. From Yole Intelligence’s report, significant investments of more than $16 billion have been announced to be spent on new facilities, with at least a percentage allocated to power device production during the 2020 – 2025 period.

Diversification is another strategy: integrating emerging technologies with new materials, either by internal development work or by M&A, will foster the penetration of new applications.

Finally, some companies may rely on government funding to build new production lines or foundries.

In August 2022, Danfoss and Semikron, originally power stack manufacturing leaders and now also well known for their power module products, officially merged to create a joint business specialized in power electronics. With the increase of systems following electrification trends and the share of power modules within the power semiconductor market estimated to increase from 31 to 44% in the next five years, reaching $13.4 billion by 2027, Semikron Danfoss, the newly formed company, has backed the right horse.

By strengthening its technological development centers and extending its manufacturing capacity, Semikron Danfoss clearly displays its ambition to establish its credentials in the field of industrial motors and sit at the table with the greatest in the very competitive fields of EVs and renewable energies.

In addition, with a supply chain secured by recent partnerships (with onsemi and Infineon for Danfoss, and STMicroelectronics for Semikron), Semikron Danfoss is stacking the odds in its favor to ride the wave of the coveted EV market.

Although preceded by other significant M&As – Infineon & International Rectifier in 2015, onsemi & Fairchild in 2016, Microchip & Microsemi and Littelfuse & IXYS in 2018 – this merger shows a continuation in the reshaping of the power electronics industry. From Yole Intelligence’s point of view, this is just the beginning of the story. The power electronics industry landscape will certainly face significant changes in the next few years with a trend toward consolidation among the leading players to access new technologies, increase their production capacity and control their supply chain, with the primary objective of improving their market positions.

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 manages an international team and develops the technical expertise and market know-how of the team.

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

Prior to Yole, Ana 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, Dr. Villamor has acquired extensive technical expertise and in-depth knowledge of the power electronics industry.

Ana has authored and co-authored several papers, as well as a patent.

Ana holds a Ph.D. in electronics and an Electronics Engineering degree and a master’s degree in Micro and Nano Electronics from the Universitat Autonoma de Barcelona (Spain).


Source: www.yolegroup.com