Soft Magnetic Composite Market Size, Share & Trends Analysis Report By Material Type (Iron Powder, Silicon Ferrite, Electrical Steel, Others), By Applications (Electrical Coils, Motors, Generators, Transformers, Inductors, Sensors, Others), By End-User (Automotive, Industrial Machinery and Equipment, Consumer Goods, Energy, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Soft Magnetic Composite Market Insights

The global soft magnetic composite market size was valued at USD 4.12 billion in 2023. It is projected to reach from USD 4.41 billion in 2024 to USD 7.59 billion by 2032, growing at a CAGR of 7.04% during the forecast period (2024–2032).

In the past few years, several industries have surged in demand for energy-efficient solutions, thereby fostering the growth of the global soft magnetic composite. Moreover, with surging environmental concerns, there has been a paradigm shift towards the adoption of renewable energy solutions from their conventional sources, which is estimated to create opportunities for global market expansion.

Soft Magnetic Composites (SMCs) are materials made by combining ferromagnetic powders with an insulating binder. These composites exhibit high magnetic permeability and low electrical conductivity, making them ideal for minimizing eddy current losses in AC applications. SMCs are commonly used in electrical and electronic devices, such as transformers, inductors, and electric motors, where efficient magnetic performance is crucial.The manufacturing process of SMCs involves compacting and heat-treating the powder mixture to achieve desired magnetic properties. Compared to traditional laminated steel cores, SMCs offer enhanced design flexibility, allowing for more complex shapes and three-dimensional magnetic circuits. Their advantages include reduced core losses, lower weight, and improved thermal management. As a result, SMCs are increasingly utilized in advanced applications, including automotive electric propulsion systems and renewable energy technologies, contributing to energy efficiency and performance optimization.

Highlights

• Asia-Pacific is the highest shareholder in the global market

Soft Magnetic Composite Market Trends

Rising adoption of electric vehicles (evs)

One significant trend in the global soft magnetic composite market is the rising adoption of electric vehicles (EVs). As automakers strive to meet stringent emission standards and consumer demand for sustainable transportation, the integration of soft magnetic composites in EV motors is becoming increasingly prevalent. SMCs offer higher efficiency and reduced core losses, which are crucial for improving the performance of electric motors. 

• For instance, the global EV market saw a remarkable 40% increase in sales in 2022, with over 10 million units sold worldwide, according to the International Energy Agency (IEA). This growth in the EV sector is expected to drive substantial demand for soft magnetic composites, positioning them as a key material in the evolving automotive landscape.

Soft Magnetic Composite Growth Factors

Growing demand for energy efficiency

The global push towards energy efficiency across various sectors is a primary driver of market growth in the soft magnetic composite market. Industries like automotive, electronics, and renewable energy are increasingly adopting SMCs due to their superior magnetic properties, which enable the development of smaller, lighter, and more efficient electrical devices.

For example, in the automotive industry, SMCs are used in the manufacturing of high-efficiency electric motors and transformers, contributing to reduced energy consumption and enhanced performance. The increasing emphasis on reducing carbon emissions and energy consumption, particularly in developed regions like North America and Europe, is further propelling the demand for SMCs. As industries continue to prioritize energy-efficient technologies, the market size of soft magnetic composites is expected to expand significantly during the forecast period.

Soft Magnetic Composite Market Restraining Factors

High production costs

One of the major restraints in the soft magnetic composite market is the high production cost associated with these materials. The manufacturing process of SMCs involves sophisticated techniques such as powder metallurgy, which requires advanced machinery and precise control over production parameters. Additionally, the raw materials used in SMCs, such as high-purity iron powders and specialized coatings, are expensive, contributing to the overall cost. These high production costs can lead to elevated prices for end products, which may hinder the adoption of SMCs, especially in price-sensitive markets. 

• For instance, in developing regions where cost competitiveness is crucial, the high price of SMCs may limit their usage, thereby restraining market growth.

Soft Magnetic Composite Market Opportunities:

Expansion in renewable energy applications

The increasing focus on renewable energy presents a significant opportunity for the soft magnetic composite market. SMCs are essential components in wind turbines and other renewable energy systems, contributing to the efficiency and reliability of power generation. As governments worldwide invest in expanding renewable energy capacities, the demand for high-performance SMCs is expected to rise.

For example, according to the Global Wind Energy Council (GWEC), the global wind power market added 93 GW of new capacity in 2022, a 12% increase from the previous year. This surge in renewable energy installations creates a favorable environment for the growth of the soft magnetic composite market. Thus, companies that can innovate and offer cost-effective, high-efficiency SMC solutions stand to gain a competitive edge in this expanding market.

Soft Magnetic Composite Market Regional Analysis

Asia-pacific: dominant region

Asia-Pacific is estimated to hold the largest market share in the global market. The Asia-Pacific region is poised to witness significant growth in the global soft magnetic composite market, driven by rapid industrialization, expanding automotive production, and increasing investments in renewable energy projects. Countries like China, Japan, India, and South Korea are at the forefront of this growth, owing to their robust manufacturing sectors and the rising adoption of electric vehicles (EVs).

North america: fastest growing region

The region's large population, coupled with supportive government policies aimed at reducing carbon emissions and enhancing energy efficiency, is further propelling the demand for soft magnetic composites. According to the International Energy Agency (IEA), the Asia-Pacific region accounted for over 60% of global EV sales in 2022, highlighting its critical role in the market's expansion. China’s soft magnetic composite market is a key driver of the Asia-Pacific, given its dominance in the global EV and electronics markets. The country is the largest producer and consumer of electric vehicles, with over 6.7 million EVs sold in 2022, representing nearly 50% of global sales, according to the China Association of Automobile Manufacturers (CAAM). This surge in EV production is fueling the demand for high-performance soft magnetic composites, essential for manufacturing efficient electric motors and other components. Additionally, China's focus on renewable energy, with investments surpassing USD 150 billion in 2022, further strengthens its position as a major market for soft magnetic composites.

The North American region holds a significant position in the global soft magnetic composite market, driven by the presence of advanced manufacturing industries and a strong focus on energy-efficient technologies. The region's market growth is primarily fueled by the automotive and electronics sectors, where the demand for high-performance SMCs is rapidly increasing. North America's emphasis on reducing carbon emissions and adopting sustainable technologies further bolsters the market. Additionally, the presence of key players and continuous innovation in material science are contributing to the market's expansion.

The United States soft magnetic composite market is the largest contributor in North America. The country's robust automotive industry, particularly the growing electric vehicle (EV) segment, is a major driver of market growth. For instance, in 2023, the U.S. EV market experienced a 45% year-on-year increase in sales, driven by both consumer demand and government incentives. Moreover, the U.S. is home to several leading SMC manufacturers who are actively investing in research and development to enhance product performance and reduce costs, further strengthening the market.

• For instance, in 2023, the U.S. EV market experienced a 45% year-on-year increase in sales, driven by both consumer demand and government incentives. Moreover, the U.S. is home to several leading SMC manufacturers who are actively investing in research and development to enhance product performance and reduce costs, further strengthening the market.

Soft Magnetic Composite Market Segmental Analysis

By material type

Iron powder is a vital segment of the global soft magnetic composite market due to its superior magnetic properties and cost-effectiveness. Iron powder is extensively used in the production of high-performance soft magnetic composites for applications requiring efficient energy conversion and minimal core losses. Its applications span across several industries, including automotive, electronics, and renewable energy. Iron powder's adaptability in forming complex shapes and its excellent magnetic permeability makes it ideal for producing components like magnetic cores and inductors. The segment's growth is driven by the surging demand for energy-efficient solutions and advancements in powder metallurgy technologies.

By application

The transformers segment is a significant contributor to the global soft magnetic composite market, driven by the need for efficient and reliable power distribution. SMCs are used in transformer cores to enhance performance by reducing core losses and improving magnetic flux density. This results in more compact and energy-efficient transformers. With the growing focus on upgrading electrical infrastructure and increasing demand for power efficiency, the use of SMCs in transformers is expanding. Innovations in SMC formulations and manufacturing processes further boost this segment, supporting the development of next-generation transformers with enhanced operational efficiency.

By end-users

The automotive segment is a key driver of growth in the global soft magnetic composite market, largely due to the rising adoption of electric vehicles (EVs). SMCs are employed in electric motors and other automotive components to improve efficiency and reduce energy losses. Their use in EVs helps achieve better performance and longer battery life. Moreover, SMCs are integral in developing advanced motor designs and reducing overall vehicle weight. The segment benefits from increasing investments in EV technology and stringent fuel efficiency regulations. As the automotive industry shifts towards greener technologies, the demand for SMCs is expected to rise substantially.

Recent Development

• January 2024- JFE Steel Corporation, in collaboration with JFE Techno-Research Corporation and Armis Corporation (a company established by Shizuoka University), successfully utilized Denjiro®, an insulation-coated pure-iron powder developed by JFE Steel, to create, prototype, and evaluate an axial-gap motor. This motor exhibits equivalent power to larger radial-gap motors while being 48% slimmer and 40% lighter than similar axial-gap motors.
• March 2024- Höganäs AB, a company based in Höganäs, Sweden, declared the shutdown of Alvier PM Technology, situated in Buchs, Switzerland.

Analyst's Perspective

As per our research analyst, the future scope of the soft magnetic composites market is promising, with significant opportunities across various industries. As technological advancements continue and the demand for energy-efficient, compact, and sustainable solutions grows, SMCs are set to play a pivotal role in shaping the future of electronics, automotive, and renewable energy sectors. Additionally, continuous innovation and strategic investments in research and development will be key to unlocking the full potential of SMCs and driving their widespread adoption.