Renewed Innovation to Lift Power Electronics to $15 Billion in 2020

Lux Research

The quest for increased energy efficiency has re-energized power electronics with new materials - like silicon carbide and gallium nitride - gaining market share, says Lux Research.

Boston, MA – April 3, 2012 – On the back of a resurgence in innovation, power electronics is poised to grow to account for $15 billion worth of sales of discrete components in four key industry segments in 2020. It’s also moving beyond its historic dependence on silicon, with two new materials — silicon carbide (SiC) and gallium nitride (GaN) — taking a 22% market share for $3.3 billion in sales, according to the inaugural report from Lux Research’s new  Energy Electronics Intelligence service.

 “There’s clearly a growing opportunity in power electronics, but the challenge for both current market players and would-be entrants is finding the places where these emerging technologies meet customer needs at the right price points,” said Pallavi Madakasira, Lux Research Analyst and the lead author of the report titled, “Beyond Silicon: Plotting GaN and SiC’s Path within the $15 Billion Power Electronics Market.”

“While consumer electronics is a ‘here and now’ opportunity, fast-growing industries such as renewable energy and industrial power applications are likely to challenge power electronics manufacturers to innovate on form factor and improve efficiency at the lowest cost,” she added.

To forecast adoption of emerging power electronics technologies, Lux Research analysts calculated the payback period for SiC and GaN devices and calculated market shares based on the required payback period for each application, as well as delaying or accelerating factors that reflect industry conservatism, design cycles, timing for capacity build-outs, and other industry drivers. Among their findings:

  • SiC and GaN vie for a slice of the silicon pie. With Si-based power electronic devices reaching theoretical limits, other semiconductors, notably SiC and GaN, are making inroads into the power electronics industry. These materials promise better performance and energy savings, and in SiC will gain a 14% market share and in GaN, an 8% share. SiC, with its better maturity and reliability, has a head start, but GaN catches up thanks to innovators such as Efficient Power Conversion and Transphorm and incumbents like International Rectifier.

  • SiC grows in renewables, GaN gains in electronics. SiC gains the most in renewables, capturing a 32% market share in solar, and is poised to capitalize on the grid storage boom. Its adoption in transportation is less aggressive, leading SiC and GaN to a relatively even share, at 16% and 15%, respectively, in 2020. GaN eclipses SiC in IT & electronics, carving out  14% share in 2020; and flourishes in smaller-scale applications within buildings in a broad $2.4 billion market.

  • VCs make big bets and corporations jockey for position. Over the past five years, investors have funneled over $200 million into developers of advanced materials and devices for power electronics. On the venture side, Transphorm, EpiGaN, GaN Systems and Azzurro have closed notable rounds, while corporate investments and acquisitions such as TranSiC (Fairchild), SiCed (Infineon), SiCrystal (Rohm) and Crysband (SKC) have continued apace. This year promises to be a record-setting one for transactions with particular attention on substrate and GaN technology developers.

The report, titled “Beyond Silicon: Plotting GaN and SiC’s Path within the $15 Billion Power Electronics Market,” is part of the new Lux Research Energy Electronics Intelligence service, which covers light-emitting diodes (LEDs) and power electronics.