Power Electronics Market Size, Share & Trends Analysis Report By Device Type (Power Discrete, Power Module, Power IC), By Material (Silicon Carbide, Gallium Nitride, Sapphire, Other), By Application (Power Management, UPS, Transportation, Renewable, Other), By Industry Vertical (Telecommunication, Industrial, Automotive, Consumer electronics, Military & Defense, Energy & Power, Other) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Market Overview

The global power electronics market size was valued at USD 26,072 million in 2021 and is estimated to reach an expected value of USD 43675 million by 2030, registering a CAGR of 5.9% during the forecast period (2022 – 2030).

Applications for electrified vehicles that offer small, highly effective power conversion solutions rely heavily on power electronics. A circuitry component known as power electronics ensures convenient usage by efficiently, compactly, and robustly transferring power from a source to a load. Using diodes, transistors, and thyristors, this device is used to regulate the transformation of electric power from one form to another. Power electronics devices can efficiently carry out operations at high voltage or current because they have a faster switching rate at a higher efficiency. Furthermore, depending on the usage, power electronics can control unidirectional and bidirectional energy flow, and the recovered energy can be used again. Future vital technologies that contribute to improving system performance and efficiency in automotive and energy-saving applications are expected to be power electronics devices.

Factors such as an increase in demand for power electronics across various industry verticals due to the growth of power electronics are driven by its increase in usage in several applications, such as industrial motor drives, electric grid stabilization, and consumer electronics. Due to the expanded use of high voltage operating devices and the growing popularity of power electronics components in electric vehicles, the demand for power management devices has increased across several industries, including automotive, consumer electronics, and energy & power. A further factor driving the global market expansion is the sharp increase in demand for SiC-based photovoltaic cells in developing nations like China, Brazil, and India.

Market Dynamics

The Rise in Demand for Power Electronics Components across various Industry Verticals

The area of electronics known as "power electronics" is concerned with the conversion and control of electrical power. Silicon carbide (SiC) semiconductors' properties, such as their stronger breakdown electric field and wider band gap, allow for their use in power electronics; for instance, these devices play an extremely crucial role in controlling automotive electronics such as electric power steering, hydroelectric vehicles central inverter, seat control, and braking system. In addition, SiC power electronics facilitate energy conversion in generators and actuators integrated into aircraft. The power electronics market growth is driven by an increase in the usage of power electronics in several applications, such as industrial motor drives, electric grid stabilization, and consumer electronics. Therefore, their effective power control and management feature for industrial operations or functioning of electrical/electronic devices make it suitable for different industry verticals, thereby augmenting the global market growth.

The Rise in Integration of Power Electronics Components in Electric Vehicles

The efficiency of conventional power electronics, based on silicon semiconductor technologies, generally varies between 85% and 95%. This results in the loss of approximately 10% of the electrical energy in the form of heat. The electrical field strength of SiC devices is nearly ten times higher (2.8MV/cm vs. 0.3MV/cm) compared to silicon semiconductors. This higher electric field strength makes it possible to apply a thinner layer structure to the SiC substrate. In addition, thermal design plays a crucial role in the power electronics system to design high-power density and consequently compact systems.

Moreover, high-frequency switching of SiC leads to lesser power dissipation in electric vehicles. SiC offers three times higher thermal conductivity than pure Si-based semiconductor devices, enabling the operation of devices at higher temperatures. Several market vendors have been investing significantly in designing SiC-based solutions, owing to the demand for electric and hybrid vehicles. Therefore, the surge in demand for electric vehicles is anticipated to offer lucrative opportunities for market growth during the forecast period.

Market Restraining Factors

Complex Integration Process of Advanced Electronics Devices

The power electronics industry focuses more on incorporating multiple functionalities in a single chip, which leads to complex design. Designing a complex device requires robust methodology, skillsets, and different toolsets for integration, which incur additional costs. This high cost of devices restraints users from shifting their preference toward innovative technology devices. These new developing innovative technologies generate demand for more functionality devices to be integrated into the system, making them more costly. In addition, incorporating multiple ICs into single devices is a complex task due to operating modes, different functionalities, and operating voltages that restrain market growth.

Global Power Electronics Market Opportunities

Innovation in Power Metal–Oxide–Semiconductor Field-Effect Transistor (MOSFET)

Presently, electronics are equipped with several features to increase their sales and increase their penetration globally. Technological improvements in electronic components, such as computers, smartphones, and wireless communication & cloud systems, are expected to provide lucrative opportunities for MOSFET. In addition, MOSFET is a switching device used for controlling applications such as electric vehicles, inverters, and power supplies. MOSFET is widely used in industrial applications, including low switching frequency. These factors would provide ample opportunities for the power electronics market demand.

Regional Analysis

Region-wise, the global power electronics market trends are analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific was the highest revenue contributor and is estimated to grow at a CAGR of 6.9%. Asia-Pacific is the most lucrative region in terms of growth rate for the power electronics market share due to the availability of substantial power stations for high voltage power, increased demand for power modules, and surge in population. Moreover, around 70% of the total electrical energy is estimated to be processed by power electronic systems that incorporate power components. These devices are extensively adopted in automotive, renewable energy stations, and electric grid infrastructures. These groups implement several initiatives to construct modern power infrastructure. Organizations across verticals have realized the importance of power devices to ensure power management. Power modules and automated switching devices are in high demand, which is anticipated to accelerate market expansion.

North America is the second largest region. It is estimated to reach an expected value of USD 8770 million by 2030, registering a CAGR of 5.9%. The market growth is attributed to the presence of countries such as the U.S. and Canada, where the governments are extending their involvement to curb pollution by promoting the use of EVs and HEVs, which incorporate power components on a large scale. Furthermore, the highest defense budget of the U.S. is yet another factor in the growth of the power electronics market in the region. The U.S.-based companies involved in the manufacturing of power components as power components have become a preferable choice in electronic warfare and advanced RADARs. In addition, an increase in the adoption of power modules and a rise in the sale of electronic devices in North America drive the power electronics market growth. Furthermore, the rise in demand for durable power modules in the power & energy sector fuels the market growth.

Europe is the third largest region. The growth of the European power electronics market has been aided by the increased adoption of advanced electronic vehicles and virtual systems and the increased penetration of digital electronic devices. The market is also anticipated to grow quickly in European nations due to the surge in demand for advanced electric vehicles. Germany has the largest market share among all the countries in Europe. The acquisition of smaller businesses, the rise in the adoption of low-power consumption devices, and proactive government initiatives in the form of subsidiaries all contribute to the market's overall growth. In addition, factors such as enhanced efficiency, durability, and minimum distortion propel the demand for compact power modules. Moreover, the demand for automated applications and real-time monitoring augments the region's need for power electronics components.

Segmental Analysis

The global power electronics market is segmented by device type, material, application, end-user, and region.

On the Basis of Device Type

Based on device type, the global market is classified into power discrete, power module, and power IC. The power module segment was the highest contributor to the market and is estimated to grow at a CAGR of 4.4% during the forecast period. Power modules have witnessed an increase in demand over the past few years, owing to unmatched efficiency and durability. Numerous industries adopt IGBT and MOSFET modules to operate high-voltage applications, such as welders, rolling mills, and water pumps. In addition, IGBT-based technology is deployed in trolleys in European countries to reduce current leakage and enhance efficiency. In the present business scenario, the IGBT module is more preferred, as it is cost-efficient and can be easily controlled at high voltage, which, in turn, boosts the market's growth.

Furthermore, low power consumption and lightweight design of power electronics augment the adoption of power modules in applications such as welding and other industrial systems. Asia-Pacific serves as the lucrative market for the power module, owing to the high adoption of power electronics in the energy & power sector. The surge in penetration of consumer electronics products is anticipated to propel the adoption of power electronics further, thereby escalating the market's growth.

The power discrete segment is the second largest. Power discrete plays a crucial role in automotive applications and consumer electronics, owing to the compact size and low switching loss. They are used in inverters and power conversion circuits for diverse applications such as motor drivers, uninterruptible power supply (UPS) systems, induction heating (IH) cookers, plasma display panels (PDPs), and strobe flashes. Moreover, various companies such as Infineon and Toshiba Corporation invest heavily to improve power discrete's high energy and high-speed efficiency. Furthermore, due to their faster switching, an increase in demand for power management chips in electronic applications such as air conditioners and refrigerators drives the market growth.

Moreover, power discrete allows high input impedance, which can be easily operated at high current and voltage. Owing to the increase in demand for power modules in electric vehicles, discrete IGBT is widely adopted in EVs for the motor. Hence, all these benefits are expected to boost market growth in the near future.

On the Basis of Material

By material, the global market is categorized into silicon carbide, gallium nitride, sapphire, and others. The silicon carbide segment was the highest contributor to the market and is estimated to grow at a CAGR of 4.2% during the forecast period. In the market for power semiconductors, silicon carbide has an advantage over conventional silicon semiconductors due to its higher breakdown electric field strength, wider band gap, lower thermal expansion, and chemical reaction resistance. Additionally, the demand for SiC-based power components is being fueled by the surge in demand for SiC-based photovoltaic cells in developing nations like China, Brazil, and India.

The gallium nitride segment is the second largest. The increase in demand for GaN in radio frequency equipment, rise in adoption of GaN in the telecommunication industry, and surge in demand for AC fast chargers, LiDAR, and wireless power drive the adoption of GaN power components in the market. The requirement of GaN power components in electric and hybrid vehicles is expected to offer lucrative opportunities for the players operating in the market.

On the Basis of Applications

The applications covered in the global market include power management, UPS, renewable, and others. The renewable segment was the highest contributor to the market and is estimated to grow at a CAGR of 6.3% during the forecast period. Considering energy sources, the renewable energy and nuclear power sectors grow at the fastest rate; each has been increasing at a growth rate of 2.5% per year, according to research by the U.S. Energy Information Administration. Government initiatives, such as Federal Energy Management Program (FEMP) in the U.S., have been promoting investment in cost-effective renewable energy projects, which is expected to increase the adoption of renewable energy systems. This has, in turn, augmented the power electronics market growth, owing to the rise in the usage of power electronics in renewable energy systems.

On the Basis of Industry Vertical

Depending on the industry vertical, the global market is fragmented into telecommunication, industrial, automotive, renewable, consumer & enterprise, military & defense, energy & power, and others. The automotive segment was the highest contributor to the market and is estimated to grow at a CAGR of 4.7% during the forecast period. Various market vendors have been making considerable investments to produce power components, owing to the demand for electric and hybrid vehicles. Moreover, major companies, such as Infineon Technologies, have been making significant investments in the production of power devices, owing to the growing market for electro-mobility and photovoltaic inverters. For instance, Infineon Technologies and Cree, Inc. signed a long-term strategic supply agreement to provide silicon carbide (SiC) wafers in February 2018. Thus, with the surge in demand for electric vehicles, potential growth opportunities are created for the manufacturers of power electronics

Impact of covid-19

Manufacturing activities were impeded by the COVID-19 outbreak, which hampered the growth of the global market. The COVID-19 outbreak prompted tight lockdown restrictions, leading manufacturing and sales operations to be disrupted. The global coronavirus outbreak has significantly influenced manufacturing industries, particularly machine vision market growth. Concerns about the environment and regulations compel firms to think creatively to increase sales and revenue.

This industry has already shown signs of decline in the fourth quarter of 2019 and the first quarter of 2020. Furthermore, the companies anticipate a significantly more significant impact from the pandemic in the third and fourth quarters of 2020 and the first quarter of 2021. According to the producer and distributor, customers do not expect the products due to stock and distribution network concerns. Nevertheless, most businesses expect income to remain below before levels by the end of 2021 and even one year after the crisis's peak.

Market Recovery Timeline and its Challenges

The post-pandemic period will be crucial for the global market. The market's growth is likely to be hampered due to a lack of skilled professionals working with advanced technologies. On the other hand, factors like the growing demand for quality and automation inspection will likely continue to drive the market growth over the forecast period.

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