The Power Semiconductor Market

­In August, Frost & Sullivan reported: “Power Semiconductors are experiencing transformational growth due to rapid electrification across industries, the AI boom, growing renewable energy demand, and focus on sustainability.” From 2023 to 2033 the forecasted cumulative growth opportunity for power semiconductors is $479.43 billion, corresponding to a 6.4% CAGR. The market size is projected to finish 2024 at $54.2 billion with short-term CAGR projected to be even higher at 7-10% over the next five years.

Advancements in power semiconductors are an enabling factor across all key market sectors, from consumer electronics to merchant power supplies, renewable energy, telecom-datacom, networking, artificial intelligence, automotive applications and more. In EV, HEV and internal combustion engines, power semiconductors are essential for power conversion, drivetrain control and battery management. They play a vital role in managing the conversion of energy generated from renewable energy sources like solar and wind. They are also necessary for inverters and UPS systems – and in the brutally competitive LED lighting and the merchant power supply business where energy efficiency and regulatory compliance are of paramount importance.

It will come as no surprise that wide bandgap (WBG) semiconductors are featured front and center as enablement technologies; so much so that the industry report lists silicon carbide (SiC) and gallium nitride (GaN) accounting for most of the growth, with traditional silicon devices growing at under 1%. Additionally, advancements in power semiconductor packaging, such as 3D, co-packaging, systems-in-a-module, etc., are making implementations viable by increasing power density to improve performance and reliability.

Imagine growth occurring in all these markets without the energy efficiency provided by power semiconductors. Despite the breakthroughs in very-large-scale integration (VLSI) technologies, today's digital applications wouldn't exist without these devices. The grid and infrastructure simply would not be able to support them.

In the power electronics industry, it can be difficult for businesses to keep pace with technical innovation and to stay relevant. Challenges include maintaining cost-effectiveness and the value of product offerings. A top-of-mind concern for every global OEM is maintaining resiliency in the supply chain and country of origin.

Companies must be able to access the new technologies needed to win. Following decades of business schools turning out experts in outsourcing and just-in-time (JIT) practices leading us to an unsustainable place, the focus on excellence in manufacturing and self-sufficiency is cool again. In my view, the industry will once again rise to the occasion and succeed in quickly delivering what the market demands. The question is: does your organization have what it takes to compete in this market?