Significant improvements in luminous efficacies in light-emitting diodes (LEDs) and current densities in power electronics necessitate efficient and cost-effective thermal management solutions. Where incumbent secondary heat sinks like aluminum and thermal interface materials like thermal grease, pads, and fillers have been traditionally used, conductive polymers look to substitute these traditional materials in different applications. The question is, how much will these emerging materials solutions displace the incumbents over the coming decade?
The overall thermal management materials market will reach $4.8 billion in 2020, with LED lighting being the primary driver. The LED lighting thermal management market for secondary heat sinks and Thermal Interface Materials (TIMs) combined will grow from $1.5 billion in 2013 to $3.8 billion in 2020. The smart phone and tablet thermal materials market will triple from about $100 million in 2013 to more than $300 million in 2020, while the thermal materials market for solar micro inverters as well as the HEV/EV power module market will grow from about $28 million in 2013 to over $170 million in 2020, a CAGR of 29%. Importantly for polymer materials developers, conductive polymer developers are set for a major move over this same time period. The total conductive polymer addressable market will grow from $280 million in 2013 to $1.9 billion in 2020, a CAGR of over 31%. Polymer secondary heat sinks in general lighting will account for a majority of this market share, reaching $1.1 billion in 2020, due mostly to replacement of bulky aluminum secondary heat sinks in the residential market near term and commercial market medium to longer term. This growth is mainly driven by the sheer volumes in the general LED lighting industry. The auto LED secondary heat sink market will account for only about $92 million in 2020. The volumes in the auto LED market are substantially lower compared to the general LED lighting industry, although will allow for potentially higher priced products due to specificity. The total polymer TIM market will grow from $280 million in 2013 to $785 million in 2020, a CAGR of 16% largely due to adoption in smart phones and tablets as well as in general LED lighting as TIM.
The consumer electronics segment offers additional value for companies looking for opportunities for materials-enabled innovation. Rather than be restricted by size (area) and shape, as is the case of TIMs for LEDs, microinverters and HEV/EV power modules, polymers for electronics such as tablets and smart phones will migrate to encompass the entire body of the smart phone or tablet – making heat dissipation more effective and in the process lowering the bar for polymer thermal conductivity. This will push the boundaries of innovation in conductive polymers where aesthetics such as color and texture will become important metrics for adoption.
As with many materials-to-device integrations, partnerships will be critical to success. Already, alliances such as Philips-DSM not only reinstated Philips as a leader in innovation in LEDs but DSM’s polycarbonate solution became commercially validated as a dependable thermal management solution for MR16 bulbs made by Philips. Across LED lighting, automotive lighting, consumer electronics and larger format power electronics, device manufacturers and materials developers can mutually enable the other’s success.
Source: Lux Research report “Cooling Heats Up: Sizing the Opportunity for Conductive Polymers in Thermal Management” — client registration required.
Inverters’ importance in the solar market has only been emphasized by the oversupply and price pressure that has driven down the cost of components around it. Suppliers are doing their part to reduce costs as well, with incremental improvements in efficiency and component count reduction, but the holy grail for solar inverters is the implementation of wide bandgap semiconductors – specifically, silicon carbide (SiC) and gallium nitride (GaN). They offer the promise of higher efficiencies, as well as superior thermal management – critical for temperature-sensitive applications such as solar inverters. GaN and SiC offer indirect cost savings in addition to direct performance benefits – superior thermal conductivity of SiC over Si reduces the size of the heat sink in inverters. Higher switching frequencies of SiC and GaN reduce the failure probability and count of passive components, while high power density enables footprint reduction and installation cost savings. The question is, what is the opportunity for introducing diodes and transistors using these higher cost, but higher performance materials?
Microinverters offer the best absolute $/W premium for SiC or GaN diodes with Si transistors (SiC + Si, and GaN + Si, respectively) and represent the ideal niche entry for these devices in the residential segment. However, string inverters are the most attractive segment for price premiums relative to silicon with the introduction of SiC and GaN transistors in addition to diodes. Acceptable string inverter price premiums of all-GaN and all-SiC systems versus all silicon top $0.10/Wp in the residential market segment enabling price premium of greater than 20% relative to silicon-based inverters. Importantly, string inverters enable ready access to the growing commercial and residential segments, delivering both volume and price in the two segments set to dominate new solar installations in the developing world for the coming years.
Notably, SiC diodes are already hitting the market through microinverters. As GaN diodes and SiC and GaN transistors become more commercially available, they should take the same path – and will have a similarly beneficial impact, while enabling discrete device developers to penetrate the large-scale inverter market at a healthy 10% price premium. As devices fully featuring GaN and SiC hit the market, they’ll hold the biggest competitive advantage in small systems – microinverters and small string inverters, for residential and commercial solar installations – with a powerful proposition: lowering the levelized cost of energy (LCOE) and increasing margins on electricity sold through PPAs.
The race is on to position for technology-driven differentiation in these growing markets. Little surprise to see inverter mainstay Advanced Energy acquire REFUsol on this basis given the latter’s valuable SiC-based inverter IP and products. Though the payback will take some time, the $77 million Advanced Energy paid for that IP will look like a bargain down the road. Others would be wise to take note of this and ABB’s similarly SiC-related acquisition of PowerOne and act accordingly.
Source: Lux Research report “Reaching for the High Fruit: Finding Room for SiC and GaN in the Solar Inverter Market” — client registration required.
Cost is the name of the game with LEDs, but most of the time, the focus is entirely on the package. Significant opportunities for cost reduction lie in materials and technology innovation in the balance of system, including thermal management, drivers, and optics. In this respect, today’s technology solutions fall short of the dramatic cost reductions needed to mirror the LED package and alternate solutions are ineffective and uneconomical – presenting opportunities for technology innovation. Based on an LED bulb equivalent to a 60 W incandescent, with a SMD configuration, aluminum based thermal management, non dimmable drivers and standard lenses for secondary optics, thermal management accounts for about 27% of the bulb cost in 2011, or $6.00. While this figure will fall to $3.95 in 2020, that figure will amount to a larger share of the bulb cost, at 36%. The size of the heat sink and the choice of material largely determine the cost – aluminum is the incumbent heat sink material and the cheapest option on the market today. Switching to more thermally conductive materials such as copper can improve performance of the heat sink, but they are currently about two to four times more expensive, and can thus increase bulb costs by 50% or more.
Material replacements with better conductors like copper are unlikely to result in cost savings in the next 10 years, and while active thermal management is a promising approach to cost savings in LEDs, its impact is unlikely to be felt outside of niche, newly enabled, applications. Further opportunities to improve thermal management will be critical for ongoing future LED cost reductions. The share of the cost stack will only rise and serve to cap device capabilities unless the opportunity is addressed.
Source: Lux Research report “Cheaper, Brighter, Cooler: The Need for Cost Reduction Past the Package” — client registration required.
Osram Opto Semiconductors introduced a new light-emitting diode
(LED) product called the “Oslon Black Flat” for automotive front lighting systems; it boasts LED packaging technology that allows the headlight to function without a lens. Osram claimed that this product offers good light output of about 200 lm at 25 °C and 700 mA operation (compared to a standard headlight that outputs between 150 lm and 190 lm); if operated at 1.2 A it can achieve 270 lm. It’s projected that an efficient headlight can extend the range of an electric vehicle by nearly six miles.
Leading auto OEMs such as BMW and Audi are investing in LEDs for front lighting in their cars to achieve energy and emission savings (and LED aesthetics as an added incentive); as a result; expect to see specific product releases for the automotive lighting segment from major LED makers like Philips and GE as well. However, just as in the general illumination and back-lighting segments the automotive space could provide for a testy IP environment for LEDs. In fact, LG Electronics and Osram Opto engaged in a IP infringement battle over LED patents for automotive headlights in Korea. With heavyweights wielding massive patent portfolios, this space will be as hostile to start-ups trying to enter as any other LED market. However, this challenge also presents an opportunity for developers of balance of systems such as drivers and thermal management technologies that are in need of more efficient solutions – the unique needs of automobile applications could provide opportunities for companies that want a new play in the LED space.
As the light-emitting diode (LED) industry focuses on dramatically lowering costs, several manufacturers are trying to do away with the incumbent sapphire as the choice for substrate and replace it with much less expensive silicon. Recently Lattice Power announced the start of volume production of its gallium nitride (GaN)-on-silicon LEDs. Others pursuing this route include Osram Opto Semiconductors, Plessey Semiconductors and Bridgelux (Client registration required.).
Despite some early results, silicon has yet to present itself as a winner over sapphire. GaN-on-silicon LEDs are still years away from overcoming the challenge of true volume manufacturing; many of the leading companies are still about two to three years away from commercial manufacturing. What’s more, LEDs on sapphire substrates are continuing to improve in performance, creating a moving target for silicon-based LEDs. The price of sapphire has plummeted from over $450 per six-inch substrate a year ago to under $300 today. And prices are likely to decline further, especially given the increasing number of low-cost Asian manufacturers creating sapphire substrates with off-the-shelf equipment from GT Advanced Technologies and Arc Energy (Client registration required.) and other copy-cat equipment solutions. While silicon’s threat to sapphire substrates is becoming more real, it’s not the end of the road for sapphire just yet.
Rising competition, diminishing subsidies and falling costs for silicon have put increasing pressure on manufacturers of crystalline silicon (x-Si) cells and modules to develop higher efficiency solar panels. Because higher efficiency panels produce more power, they reduce the cost of commodity materials – such as glass, aluminum and copper – on a perwatt ($/W) basis. Lux analysts found that a 1% improvement in absolute efficiency contributes to $0.05 to $0.08 savings per peak watt.
This week’s Graphic illustrates how Lux analysts expect four emerging technologies – back side junction, HIT (heterojunction with intrinsic thin layer), wrap through emitter, or selective emitter – will ramp up as manufacturers upgrade to higher efficiency cells. Among the highlights of their analysis:
- Selective emitter (SE) technologies are poised for growth. Extensive academic research has established that SE can boost efficiencies for both monocrystalline and multicrystalline cell technologies, giving it a clear lead among cell manufacturers. Also, based on announcements from tier 1 cell and module manufacturers and the time associated with ramping new technologies, Lux analysts anticipate SE technologies will account for about 15% of the standard x-Si market in 2015.
- Back side junction and HIT technologies will remain specialized technologies. While some companies such as Hyundai Heavy Industries are attempting to combine back side + HIT technologies, Lux analysts do not see many more companies pursuing these as their first choices due to higher associated processing costs, and the unavailability of turnkey off-the-shelf equipment to commercialize these solutions.
Source: Lux Research report “Traversing the Road to Higher Crystalline Silicon Efficiencies: Who Stands to Change the Game, and How it Will Play Out.”
The precipitous fall of module prices has led to a few casualties in solar. Evergreen Solar filed for Chapter 11 bankruptcy, and is currently trying to sell its assets and core “String Ribbon Technology.” With falling polysilicon prices (currently between $55/kg and $60/kg), the company couldn’t compete with standard crystalline silicon technology which, as we’ve mentioned previously*, has been made substantially cheaper by Chinese manufacturing firms. Chinese manufacturers have enjoyed continuing support from the Chinese government through inexpensive capital, low prices for electricity, and low labor costs. This is clear evidence that government subsidies and support are extremely critical to the growth of the solar industry.
Meanwhile, Solon announced that it has decided to shut down its Tucson facility given its inability to be cost competitive with the low-cost Chinese module manufacturers and instead focus on its project development and power plant business.
In addition, high-cost American sweetheart Solyndra was forced to shut its doors and file for bankruptcy. The start-up attracted high scrutiny for its inability to compete due to significant price drops in polysilicon, even after receiving a loan guarantee from the U.S. government. And Ascent Solar*, a thin-film CIGS manufacturer that was likely heading the Evergreen route was rescued by TFG Radiant Group of China, by signing a royalty and strategic partnership agreement.
Non-cost-competitive technologies and companies with poor strategy and balance sheets will likely go out of business faster given the shift in demand dynamics worldwide for PV that have significantly impacted module prices. This news bodes well for all the low-cost Chinese manufacturers such as Yingli, Trina Solar, and Suntech, all of which are better able to withstand the low-price environment. This news should make smaller thin-film solar companies wary of the competition in the industry.
* Client registration required.